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DEA selective in medical marijuana arrests
01.09.07|Contra Costa Times

Until federal drug agents arrested him earlier this month, Shon Squier was one of Hayward's most successful and generous young businessmen.

Customers lined up outside his downtown storefront, particularly on Mondays, when he offered free samples to the first 50 visitors. Business was so good that Squier, a former construction worker, was able to donate more than $100,000 to local charities.

But Squier's success as a dynamic medical marijuana entrepreneur was also his downfall. Federal drug agents raided his home and business, arresting Squier and his store manager, freezing bank accounts containing $1.5 million and confiscating several expensive cars, motorcycles and $200,000 in cash.

Medical marijuana advocates claim the raid constitutes unfair, selective enforcement by the Drug Enforcement Administration of the estimated 170 medical marijuana dispensaries in the state, including 85 in the San Francisco Bay Area.

Just down the street, another medical marijuana dispensary, not as big or as flashy as Squier's, was left untouched by the DEA agents in the Dec. 11 raid.

The federal drug agency, which does not recognize California laws legalizing the sale of marijuana to patients with doctor's prescriptions, contends the amount of money involved proves that the medical marijuana trade is nothing more than high-stakes drug dealing, complete with the same high-rolling lifestyles.

"These people will tell you they are just interested in the terminally ill," said Gordon Taylor, DEA special agent in charge of the California eastern federal district, "but what they are really interested in is lining their pockets with illegal drug money. When you pull the mask off, you see that they are nothing more than common dope dealers."

California's two medical marijuana laws, Proposition 215, approved by voters in 1996, and Senate Bill 420, passed in 2003, are not clear about how much money proprietors may take out of their businesses. One section of SB420 states that medical marijuana caregivers should be allowed "reasonable compensation" for their services. Another section states that distribution should be done on a nonprofit basis.

"The legislation is about as clear as mud the way that they wrote it," said Joe Elford, lawyer for Americans for Safe Access, a pro-medical marijuana group. "The dispensaries are legal under state law because they are cooperatives and collectives. It is my best guess in terms of what the Legislature intended is that they shouldn't be operating to make a profit."

With the proliferation of medical marijuana dispensaries of all sizes across the state, the DEA and Internal Revenue Service recently have concentrated their investigations on young, high-profile operators such as Squier, 34, and Luke Scarmazzo, 26, co-owner of a Modesto dispensary.

Scarmazzo got the attention of the DEA earlier in the year when he produced a rap video that showed him counting stacks of hundred dollar bills, blowing billows of smoke at the camera and flipping off federal agents.

Federal prosecutors showed it at Scarmazzo's bond hearing to demonstrate his criminal intent in order to deny him bail.

But Fresno lawyer Anthony Capozzi, who represents Scarmazzo, said the effort backfired.

"Let me tell you, the whole courtroom was swaying to the music," Capozzi said. Scarmazzo was released on a $400,000 bond and his 2007 Mercedes, confiscated by federal agents, was returned to him.

Taylor, the DEA agent, said that between January and June of this year, Scarmazzo, who has a previous felony conviction, and his associates recorded $3.4 million in sales of marijuana products with brand names that included "911," "AK47" and "Train Wreck." Scarmazzo and his California Healthcare Collective co-owner, Ricardo Ruiz Montes, also 26, are charged in federal court with money laundering and "operating a continuing criminal enterprise." The last charge, one of the most severe under federal drug laws, carries a sentence of 20 years to life in prison.

Here in Hayward, Squier and his business manager, Valerie Lynn Herschel, 23, are charged with the illegal manufacture and distribution of marijuana, a federal "controlled substance." Federal agents confiscated hundreds of plants, brownies, cookies and other products containing marijuana from Squier's business, Local Patients Cooperative.

"I only gave the people what they wanted: easy, safe access to medical marijuana," said Squier in his former office, which was stripped bare by federal agents.

He described his business as a responsible enterprise that paid federal and state payroll taxes for 60 employees, contributed to the Hayward High School football team and gave discounts to Hayward residents, veterans and customers in wheelchairs.

Squier said that he served about 75 customers a day and had 70,000 individual patients in his books. The success of his business allowed him to buy a $1.5 million home in the Hayward Hills overlooking San Francisco Bay, a Hummer and a late-model Mercedes.

Half a block down Foothill Boulevard, Tom Lemos, 45, continues to operate his much lower-volume Hayward Patients Resource Center.

Whereas Squier and Scarmazzo flaunted their wealth, Lemos, who claims to have 3,000 to 4,000 regular customers, emphasizes his modest lifestyle.

"I live in a rental apartment and I drive an '86 Isuzu with 245,000 miles on it," Lemos said.

Appearing before the Hayward City Council on Dec. 19 to ask for a renewal of his agreement to operate in the city, Lemos opened his remarks by stating: "I don't live in a large house."

Compared to his self-described "small, homey" medical cannabis operation, Lemos said, Squier's high-volume Local Patients Cooperative down the street was a "Wal-Pot."

After hearing Lemos' presentation and testimony from several of his patients, the City Council agreed to extend his agreement for 90 days, suggesting that he would be granted a longer-term permit if he moved from the downtown area to a more remote location, away from schools and the general public.

Even before the federal bust, the city had informed Squier that its agreement with him would be terminated.

Similarly, after Scarmazzo began operating in Modesto, the City Council passed an ordinance banning additional cannabis cooperatives, and the city had on several occasions attempted to halt Scarmazzo's operation.

The raids on both the Hayward and Modesto operations support what medical marijuana advocates contend is an unwritten practice by the DEA of being more likely to crack down on an operation that has lost local government support.

After the U.S. Supreme Court ruled last year that federal laws banning marijuana sales take precedence over those in California and other states permitting the sales, the DEA was empowered to arrest patients and operators at any one of the dispensaries that started up after passage of Proposition 215.

Instead of going after everyone, however, the federal agency appears to concentrate on the larger and higher-profile operations.

Medical marijuana advocates contend it is unfair of the DEA to cite examples like Squier and Scarmazzo to represent the typical dispensary operators.

"Most operators are not wealthy individuals," said Elford, the Americans for Safe Access lawyer. "As far as we can tell, the majority of dispensary operators are simply people who are interested in providing safe, affordable and reliable medicine to the people who need it and are not in it for the profit."

The "big fish" strategy enrages Oakland lawyer James Anthony, who represents Scarmazzo in civil matters.

"Why does the DEA suddenly concern themselves with how successful a medical cannabis collective is?" he asked. "Are they saying that if these guys had led monkish lives, then they would have left them alone? Are they judging Donald Trump on his lifestyle?"

 

Buzzby

Why is there any question? It is against both state and federal law to sell marijuana for a profit.

It's not a matter of lifestyle - it's people getting rich off of the marijuana trade. Busting patients or non-profit cooperatives is bad press for the DEA. It makes them look like they're bullying sick people. Busting marijuana millionaires doesn't bother most people because the entrepreneurs are operating outside the legal frameworks of Prop 215 and SB420.

Until such time as for-profit marijuana dealerships become legal, dispensaries should be true co-ops: employees should receive a reasonable wage and the rest of the money should be plowed back into the business, either expanding operations or reducing end-user prices.

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Auslander

Another point of view would be that the DEA focuses on the very well off dispenseries because it means they get more money, cars, homes, planes in the siezure. People with 1982, paid for, chevettes are less likely to get their property siezed than the guy w/ a Ferarri

dedbr

I need to reply to this, because it illustrates so well what is wrong with the medical marijuana laws, and what needs to be changed in my opinion......

Which is probably his opinion on the whole bunch of us, but that's to be taken for granted since he's a member of the idjit team, huh?

Non-profit basis? Isn't this what this is all about, profit? I wonder what they consider "reasonable compensation"? Seems for sure you can't be successful, huh?

If you don't operate to make a profit, I don't see a lot of interest in it.


If your a dispensary operator, are you giving the herb away? No, you expect to be paid for your services or labor, that's just common sense.

This guy had, or at least claims to have had, 70,000 patients. That's a lot of herb in one month. More than few lbs. Who do you think pays for shipping and other expenses, the fairy fuckin' godmother? I can't believe the arguments these people come up with, I really can't.....

Sure they are. Easier to justify the arrest of a successful co-op owner who caters to tens of thousands than one old guy handing out brownies for free at the pool hall...........

Makes 'em look bad if the old guy is a veteran......


Some Where In Ded Land...........

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Sec

I do agree with what dedbr said, that no one is going to work for free. Everyone wants a piece of the pie.

However; the part that gets me is that farmers cannot grow hemp without subjecting themselves to a long, detailed, expensive background check by the FBI and DEA and whoever else wants to know anything and everything about them, but someone with a prior felony conviction can have a license from a city entity to grow and sell pot for profit?????

Where is the logic in this?

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Auslander

Gonna throw in another
Supply and demand. Currently there are few who are willing to risk imprisonment for growing/selling in large quantities. Thus the few that do can be expected to make some serious profit. If it were legalized, it would encourage competition and the pricing/profit would drop. Imagine a farmer rotating corn then beans then bud. lol

Dachshund12

The logic is that the hemp license is from the federal gov't and the dispensery license is from the state. This whole thing is a state's rights issue.