Pubdate: Sun, 24 Nov 2013
Source: Texarkana Gazette (TX)
Copyright: 2013 The Associated Press
Contact:  http://www.texarkanagazette.com/
Details: http://www.mapinc.org/media/976
Author: Kristen Wyatt, The Associated Press

COLORADO MARIJUANA RAIDS SHOW INDUSTRY IS STILL RISKY

DENVER (AP) - There's money to be made in legal weed. But you better 
have a strong stomach for risk.

That's the message Colorado's nascent pot industry is taking from 
federal marijuana raids in Colorado this week. Thursday's raids 
underscored how state legalization doesn't remove risk from an 
industry that violates federal drug law.

Agents from the Drug Enforcement Agency and Internal Revenue Service 
raided at least 10 locations in Colorado on Thursday. The raids 
included growing warehouses, a Denver dispensary and two homes. No 
one was arrested, but federal authorities say an investigation is ongoing.

People in Colorado's marijuana industry were withholding judgment on 
the raids. But with retail recreational marijuana sales set to start 
in less than six weeks, uncertainty remains a constant presence.

"There's no one who owns and operates a dispensary who doesn't think 
every minute a police officer could walk through the door," said 
Robert Kane, chief financial officer for two cannabis-related 
businesses in Colorado Springs. "Buying, selling and growing cannabis 
is in conflict with federal law. End of story. It's a risk."

It was unclear what investigators were looking for Thursday. One of 
the 10 "target subjects" listed in a search warrant, Juan 
Guardarrama, is serving a prison term in Florida for racketeering, 
fraud and money laundering related to jewel thefts.

Jeff Dorschner, a spokesman for the U.S. attorney's office in Denver, 
said the probable-cause documents that outline the reasons for the 
raids are sealed.

Colorado plans to allow recreational pot sales starting Jan. 1, but 
not all jurisdictions are participating or plan to be ready that day. 
Many of the state's 500 or so medical pot shops are planning full or 
partial conversion to the recreational market, open to all adults over 21.

Colorado voters signed off on the recreational pot business last year 
in a ballot measure. The measure flouts federal drug law, but the 
U.S. Department of Justice said in an August memo that it would 
largely ignore states that violate marijuana law as long as the 
states keep the drug away from children, other states, criminal 
cartels and federal property.

Dorschner has said the raid targets are suspected of violating that 
guidance. He wouldn't elaborate.

Kane and others in Colorado's pot industry say it's too soon to say 
what effect the raids will have on business. If the targeted 
businesses were breaking the law or evading taxes, the raids could 
actually boost investor confidence, Kane said. But the raids also 
sent a stark reminder that marijuana is still illegal. Agents smashed 
a window at a Denver dispensary and wore surgical masks while carting 
out documents.

"There's never assurance that anyone in this industry is safe," said 
Jason Warf, a lobbyist for dozens of dispensaries and head of the 
Colorado Springs Medical Cannabis Council.

Warf and others said the raids used unsubtle military-style tactics 
that remind everyone the business isn't for the faint of heart.

"We see this again and again, raids where they smash windows, take 
anything of value, and nine times out of 10 there's never any charges 
that follow," Warf said. "These raids were done during business hours 
in full daylight. Why do they bust windows when they could just walk 
through the door?"

Kane said pot businesses that break state regulations aren't going to 
be treated like other lawbreakers.

"They just negotiated $13 billion from JPMorgan and they didn't break 
one window," Kane said, referring to a settlement with U.S. officials 
over bad mortgages. "But you still see this kind of approach to this 
industry, which is legal here."
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MAP posted-by: Jay Bergstrom