Legal Medical Marijuana Company Fights Back After Police Raid Cripples Its Business

California has had medical marijuana for 20 years, but legal businesses still have few protections.

A California medical marijuana distributor is looking to bounce back after local law enforcement raided the business and seized approximately $1.4 million in cash and assets. 

San Diego-based Med-West Distribution, which manufactures cannabis oil cartridges for medical use, was raided on Jan. 28, after police said they received a tip that the company was illegally producing and distributing cannabis oil. Newly released security footage shows roughly two dozen law enforcement officers, outfitted in helmets and body armor and carrying assault rifles, raiding the business. Two employees were handcuffed and detained for several hours. 

According to Med-West CEO James Slatic, San Diego's police department seized much of the company's assets during the raid, including its products, hard drives and over $300,000 in cash. Slatic's bank accounts, as well of those of his wife and daughters, were also frozen.

The raid came as a shock to Slatic, who has served on the boards of the Marijuana Policy Project and the California Cannabis Industry Association and has been heavily involved with the political side of the cannabis community. He launched Med-West in 2010, and until the January raid, he'd never had a problem with law enforcement.

"We just thought that we were part of the responsible marijuana industry," Slatic said.

Police had previously claimed that Med-West was using an illegal and hazardous process to manufacture its products, and that it was operating in violation of state laws that limit distribution of medical marijuana products exclusively to licensed medical marijuana dispensaries. But nearly four months after the raid, no charges have been filed against the lab or any of its employees. None of the assets seized during the raid have been returned.

The San Diego district attorney's office would neither confirm nor deny that it is involved in an investigation of Med-West. The office declined to answer specific questions about why the raid occurred, which law enforcement agencies were involved and what charges, if any, are pending. 

Under California's civil asset forfeiture laws, police can seize property suspected of being used to commit a crime or obtained due to illegal activity, regardless of whether the owner of the property has been charged with a crime. (Property valued at less than $25,000 requires a criminal conviction prior to seizure.) Law enforcement groups defend the practice as necessary to cripple criminal operations, but the tactic has come under scrutiny amid accusations of abuse and "policing for profit."

Lawmakers attempted to reform the state's law last year, introducing a bill that would have required a conviction in order to seize any property, regardless of its worth. The state Assembly rejected the bill in a 24-41 vote.

"It seems like money is guilty until proven innocent in our system," Slatic said.

Amanda Reiman of the Drug Policy Alliance said the raid on Med-West and the ensuing legal limbo follows a pattern of raids designed to choke off what she described as the cannabis industry's good actors.

"It's draining them of their ability to be a sustainable business," she said.

With no money to pay employees, Slatic was forced to shut down Med-West and sell the building it operated in. He plans to reopen Med-West as soon as he can, but says he will "absolutely" not reopen in San Diego, given the history of the DA's office cracking down on medical marijuana businesses and users. 

California legalized medical marijuana in 1996. But as cannabis is still illegal under federal law, the industry has remained a target of both federal and local law enforcement. The Justice Department has gone after hundreds of dispensaries and other medical marijuana businesses across California, forcing many of them to close under the threat of federal prosecution despite their compliance with the state's medical marijuana law.

There are, however, signs that the tide may be turning. Earlier this month, the DOJ dropped its four-year-long case against Oakland's Harborside Health Center, known as the nation's largest medical marijuana dispensary. A similar case against a Marin dispensary was dropped in April. And in October, a federal judge ruled that the Justice Department can't prosecute medical marijuana providers that are compliant with state law.

A new set of guidelines, signed into law by California Gov. Jerry Brown (D) last year, seeks to fully regulate the industry and to prepare the state for legal recreational pot, which California voters will decide on this fall. Advocates hope the new regulations will put a stop to raids on compliant medical marijuana businesses.

"This sends a clear and certain signal to our federal counterparts that California is implementing robust controls not only on paper, but in practice," Brown said in a statement upon signing the law.

San Diego, however, has remained an outlier in these trends. The city has launched a major crackdown on dispensaries, closing nearly 300 pot collectives.

Slatic is now looking toward a June hearing, when he'll petition to get back some of the money seized in the raids, as well as funds from his and his family's personal bank accounts. Slatic has raised about $30,000 from an Indiegogo campaign to pay for his legal defense. He's also received support from U.S. Rep. Dana Rohrabacher (R-Calif.), the co-author of the budget amendment that prevents the Justice Department from using federal funds to go after state-legal marijuana businesses.

"Cases like the one against Med-West in San Diego should be dropped and prosecutors should instead use their resources against murderers, rapists, robbers and terrorists," Rohrabacher said in a statement earlier this month.

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