Frequently Asked Questions for Property Owners:
Asset Forfeiture and Medical Marijuana

Background

California voters legalized medical cannabis (marijuana) in 1996, when they approved Proposition 215. Since then, our state legislature and local governments have adopted a patchwork or regulations governing the provision of medical cannabis in California, and the courts have consistently upheld our laws as valid. Unfortunately, medical cannabis remains illegal under federal law. Efforts to harmonize federal law with state law are underway. In the meantime, the US Supreme Court allowed California law to stand, despite its differing with federal statues (Gonzales v. Raich, 2005).

Last summer, the Drug Enforcement Administration (DEA) began sending letters to California property owners who rent to legal medical cannabis collectives or cooperatives (dispensaries) in an attempt to intimidate them into evicting their tenants. The letters state incorrectly that federal law trumps state law – a position rejected by the courts, legislature, and the California Attorney General. Beginning in June 2008, the US Department of Justice (DOJ) stepped up the federal pressure on medical cannabis patients and providers in California by sending letters to property owners in Santa Barbara County asking them to attend a meeting to discuss the DEA letters.

Americans for Safe Access (ASA) is already working with Congressional leaders and allies in California to stop federal interference and intimidation like this. We have been working with US House Judiciary Committee Chairman John Conyers (D-MI) and Subcommittee Chairman Robert Scott (D-VA) since December of last year to convene Congressional hearings into DEA tactics and motives in California. The DOJ escalation comes just weeks after Chairman Conyers sent a letter demanding explanations from the DEA, which is a procedural prelude to oversight hearings that may halt further action by the DEA and DOJ. (See http://www.safeaccessnow.org/article.php?id=5329)

ASA is confident that we will be successful in harmonizing federal law with the laws of California and twelve other states that allow medical cannabis use. In the meantime, California property owners may receive letters like these from the DEA and DOJ. Below you will find answers to some common questions about medical cannabis collectives, federal intimidation, and where you can get assistance.


Why should I rent space to a dispensing collective?

Dispensing collectives provide an incredibly important service both to medical cannabis patients and to the community at large, which has an interest in caring for its sick and dying members. Without dispensing collectives, many of California’s almost 300,000 medical cannabis patients would have no way to get their legally sanctioned medicine and would be left without relief.  Renting facility space to dispensing collectives also assists in implementing both California law (Prop 215) and the will of the people (a 2002 Time/CNN poll found that 80% of Americans support safe and legal access to medical cannabis).

Are dispensing collectives legal under state law?

In an effort to clarify the voter initiative of 1996 and aid in its implementation across the state, the California legislature enacted Senate Bill 420 in 2004, which expressly states that qualified patients and primary caregivers may collectively or cooperatively cultivate cannabis for medical purposes (Cal. Health & Safety Code section 11362.775). This provision has been interpreted by the courts to mean that dispensing collectives, where patients may buy their medicine, are legal entities under state law. California's Third District Court of Appeal affirmed the legality of collectives and cooperatives in 2005 in the case of People v. Urziceanu. (See http://www.safeaccessnow.org/dispensaryreport)

What are my risks as a landlord who rents to a dispensing collective?

The major risk is that, if the federal government chooses to, it can raid the dispensing collective facility, and at some point, it could initiate asset forfeiture proceedings or criminally prosecute even the landlords of such facilities. Medical cannabis is legal in twelve states, but federal law still prohibits its use under any circumstances. Until federal law changes, people who use or provide medical cannabis are at risk of federal prosecution – even if their conduct is legal under state law and sanctioned by local government.

Despite threats by the DEA and DOJ, the risk of asset forfeiture proceedings against a landlord who is not the owner/operator of the facility is still relatively small.  Although the latest intimidation tactics have resulted in the dissemination of nearly 300 threatening letters to landlords who rent to dispensing collectives throughout California (in Los Angeles, Santa Barbara, Santa Cruz, San Mateo, San Francisco, Alameda, Marin, Sacramento, and Mendocino Counties), the federal government has yet to follow through on any of its threats in the wake of these letters, as it lacks the capacity to do so.  In fact, in the eleven years in the federal opposition to medical cannabis, ASA is only aware of one instance where the federal government has been even partially successful in an asset forfeiture case against a non-owner/operator landlord (In that case, after the defendant raised a lack of proportionality defense, the government agreed to cease its attempt to seize the property in exchange for defendant’s payment of a fine).

What is asset forfeiture?

Asset forfeiture refers to a civil or criminal action in which the state or federal government confiscates assets that were acquired with proceeds of a criminal act or were used to commit a criminal act. Congress and state legislatures created asset forfeiture laws to target large-scale narcotics trafficking operations, but they are most often used against small-scale offenders. Asset forfeiture laws generate a tremendous financial windfall for law enforcement agencies, and widespread abuse of these statues led to federal reform measures in 2000.

What would this have to do with my property?

Over the last year, the DEA has sent notices to property owners across the state informing the owners that they may face criminal prosecution or asset forfeiture for knowingly renting their property to a medical cannabis facility. The notices do not indicate that any property owner is being charged with a crime or is now subject to asset forfeiture.  As these notices do not initiate any particular action against the property owner, there is no requirement that the property owner respond to the notice or take any action.

More recent letters from the DOJ ask property owners in Santa Barbara County to attend a meeting to discuss the DEA notices. It is reasonable to assume that the purpose of this meeting is to further intimidate and manipulate property owners into evicting their tenants. ASA strongly urges property owners to refrain from responding to letters from the DEA or DOJ, as doing so may abrogate some of your rights and make you vulnerable to further intimidation.

Is this legal?

Yes. Although asset forfeiture charges are controversial, they have been upheld in court. The US Attorney's office can file criminal charges or initiate asset forfeiture charges if it can prove that a landlord knew that the actions of the tenant were illegal and did not take reasonable measures to stop those actions. Only the US Attorney can file these charges. The DEA notices and DOJ letters do not indicate that any charges have been filed.

Why is this happening now?

The DEA has been active in trying to close and intimidate medical cannabis facilities in states where it is legal. Until now, the DEA's primary tool to do this was to raid a handful of facilities and confiscate the medical cannabis inside. Few of these raids resulted in criminal prosecutions, and most raided facilities simply reopened. Sending notices to landlords is a cynical new tactic designed to intimidate property owners into evicting the tenants without the cost and inevitable public backlash of raiding facilities.  This tactic is also meant to discourage landlords from renting to collectives at all, in an effort to deny safe access to patients.

Does the US Attorney intend to prosecute property owners?

The US Attorney's office has the authority to prosecute property owners, but there is no indication as to whether or not they intend to do so. Despite the new DOJ letters, there is still no firm evidence of the US Attorney moving to prosecute a property owner.  It is important to remember that the notices recently sent to landlords are from the DEA and DOJ give no indication whatsoever that the US Attorney's office will initiate criminal or civil proceedings.

What should a landlord do upon receiving a notice?

Property owners who receive a notice from the DEA or DOJ  have not been charged with a crime. Nevertheless, the landlord may wish to consult with his or her attorney or an asset forfeiture specialist about a landlord's rights and responsibilities under the law. Lawyers will likely advise you not to make any statement to the DEA indicating knowledge of or agreement with a tenant engaged in illegal activity.  Doing so may mean giving up important rights in the unlikely event of later charges. There is no need to act immediately if one receives a notice, and there may never be a need to act at all.  Any legal action that might be initiated would take months to unfold, so a landlord should take time to consider the issue, talk with the tenant, before making up her or his mind. Always remember that the DEA and DOJ are trying to intimidate and manipulate landlords into evicting these tenants as soon as possible. Landlords do not have to succumb to this pressure without undue consideration of their own financial interest in maintaining the lease and their rights as a property owner.

What if a landlord was unaware of the tenant's actions?

Federal asset forfeiture laws provide for an "innocent owner" defense for property owners who were unaware of the illegal activity and subsequently take reasonable steps to stop the activity. In some instances, this may involve initiating eviction procedures or requiring tenants to refrain from violating the law. A landlord should discuss how the innocent owner defense applies with his or her lawyer or asset forfeiture specialist.

Where can landlords get help on this issue?

Americans for Safe Access (ASA) is working in Congress and throughout California to ensure that landlords' rights are protected and that medical cannabis facilities can remain open. Please contact our Oakland office at 510-251-1856 if you have further questions so that we can keep you posted about our work on this topic. ASA is the nation's largest organization of patients, medical professionals, scientists and concerned citizens promoting safe and legal access to cannabis for therapeutic use and research. We have already won important court victories on medical cannabis issues and are leading the campaign to change federal medical cannabis laws by 2010. Visit http://www.AmericansForSafeAccess.org for more information about ASA.

You can find a list of lawyers who may be able to advise you about asset forfeiture issues by viewing the Attorney's Directory published by Forfeiture Endangers Americans Rights (FEAR) at http://www.FEAR.org  This organization operates independently of ASA).