A two-month investigation into mobile medical marijuana dispensaries in San Luis Obispo County started in October, when a San Luis Obispo police detective, working undercover, visited a local doctor and complained of back pain.
According to search warrants, the detective received a recommendation for medical marijuana Oct. 8 from a San Luis Obispo physician — along with a list of medical marijuana delivery services available in the county.
Eleven weeks later, on Dec. 27, 45 to 50 officers started serving the search warrants over three days at seven locations. Fifteen people were arrested on various allegations of possessing and selling marijuana.
According to the attorney representing most of the 12 San Luis Obispo County residents arrested, officers pointed guns at the suspects and their children, tore apart their homes, seized computers and other items, and left them sitting in a cold van for several hours. Three people from Southern California were also arrested.
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Law enforcement officials say the arrestees were selling and transporting marijuana illegally throughout San Luis Obispo, Santa Barbara and Monterey counties, in violation of the state’s Compassionate Use Act and Medical Marijuana Program. Authorities would not comment on the manner of the arrests.
But attorney Patrick Fisher, of San Luis Obispo firm Fisher & Fisher, said it appeared his clients — who operated separate nonprofit collectives — were in compliance with state law, and an advocate for medical marijuana said law enforcement is incorrectly interpreting state law.
The arrests and the aftermath encapsulate the debate about what law enforcement, citizens and medical marijuana advocates believe is allowed under state law.
Supporters of medical marijuana also questioned whether law enforcement should use limited resources to arrest people accused of nonviolent crimes — and how people who need medical marijuana can get access to it in San Luis Obispo County.
As of Friday, four of the people arrested by officers with the San Luis Obispo County Narcotic Task Force had been arraigned. Additional arraignments are set for Tuesday — the same morning that the local chapter of a medical marijuana advocacy group plans to stage a protest outside the County Government Center over the recent sweep.
California voters approved Proposition 215 in 1996, exempting some patients and their primary caregivers from criminal prosecution for possessing and cultivating marijuana. In 2003, state lawmakers approved a bill that set up a program to issue voluntary identification cards. It also authorized the attorney general to issue guidelines to ensure the security of marijuana grown for medical use, and to make sure it does not get to nonpatients.
Fisher said his clients operated collectives. They are defined in the attorney general guidelines as groups that form to cultivate marijuana for medical purposes for patient and caregiver members. They should only provide a means for facilitating or coordinating transactions between members — and should not purchase marijuana from, or sell to, nonmembers.
They also cannot make a profit.
Chris Austin, a Paso Robles resident who was arrested, said the guidelines are used as “a business plan” by those interested in setting up collectives.
The attorney general guidelines state that, once a collective is formed, members may reimburse it for marijuana allocated to them, but the reimbursement should only be enough to cover overhead costs and operating expenses.
But Rodney John, commander of the San Luis Obispo County Narcotic Task Force, disagreed.The guidelines are opinion, he said, not California law. The law does not state that collectives or cooperatives can sell marijuana, he said.
“Paying for medical marijuana across the table is not a collective,” he said. “They can grow it, they can harvest it and process it, but they cannot sell it.”
John likened medical marijuana collectives to community gardens in the 1960s, where a group of people would tend to crops and then divide them up. People are allowed to form collectives, approve members, and then cultivate and allocate medical marijuana, he said.
But Kris Hermes, a spokesman for the medical marijuana advocacy organization Americans for Safe Access, said local law enforcement is ignoring case law and the attorney general’s guidelines.
“These are guidelines for law enforcement across the state, and local law enforcement officials are interpreting state law to suit their desire to go after people who are trying to get medical marijuana to patients,” he said. “Case law exists that clearly states that collectives can recoup costs for production.”
State law does allow primary caregivers to receive compensation for out-of-pocket expenses to help a patient receive medical marijuana. A primary caregiver is someone designated by a patient with a doctor’s recommendation and who has assumed responsibility “for the housing, health or safety” of the patient.
Primary caregivers can serve as such to more than one patient, if they all live in the same city or county.
“They’re not doing the duties of caregivers,” John said. “Giving marijuana from one hand to another is not giving care.”
Hermes said the law passed in 2003 actually made it more difficult for people to become caregivers, and after that, collectives started increasing as a primary way for people to receive medical marijuana.
There are no storefront dispensaries in San Luis Obispo County. However, there have been unsuccessful attempts to open some.
A proposal for a medical marijuana clinic in Nipomo fell short in August, and in 2008, county supervisors barred a dispensary planned for Templeton. County planning commissioners had voted to approve it.
A dispensary in Morro Bay that opened in 2006 was closed a little more than a year later, after sheriff’s and federal Drug Enforcement Agency officials raided Central Coast Compassionate Caregivers and said they found federal and state violations.
The operator, Charles Lynch, was later given a reduced sentence in a highly watched federal court case.
The county treats storefront dispensaries and collectives as the same thing, so anyone wishing to provide medical marijuana — even as a mobile delivery service — must first receive a minor use permit from the county, senior planner Bill Robeson said.
In a news release, Hermes wrote that medical marijuana delivery services have increased in the county as a result of the storefront dispensaries being shut down — and some estimates put the number of collectives in the county now at 20.
On Oct. 8, a San Luis Obispo police detective and narcotic task force member received a recommendation for medical marijuana from Mary Eanes, who works as a physician’s assistant at Rees Family Medical, according to search warrants and interviews.
The detective had found the office through an advertisement for “medical marijuana evaluations,” according to search warrants.
Eanes confirmed during a phone interview that she had met with the woman, who paid cash for her visit, and showed a photo identification card that appeared valid.
In early and mid-November, the detective called several medical marijuana delivery services and arranged to purchase marijuana, according to six search warrants signed by San Luis Obispo Superior Court Judge Jacquelyn Duffy on Dec. 23.
Each collective set up a time to deliver medical marijuana to her at a San Luis Obispo apartment in the 1100 block of Leff Street that the task force used for its undercover operations, according to the search warrants.
At each meeting, the detective gave the collectives between $45 and $120 for marijuana, receiving one-eighth of an ounce to a quarter-ounce.
According to the search warrants, three of the people the detective met with instructed her to fill out forms stating she was joining their collectives; two others had her sign a form stating the collective was now her caregiver; and one person, based in Los Angeles, did not have her sign any forms.
A review of the search warrants shows that some collectives followed the attorney general guidelines more closely than others — nearly all requested that the detective provide a copy of her doctor’s recommendation.
According to the search warrants, one of the Paso Robles residents arrested, Peter Miller of Harmonic Alliance, wrote a false address for the detective on her customer records form and told her doing so “adds an extra layer of protection from law enforcement.”
Pismo Beach resident Steven Gordon of Hopeful Remedies told the detective his name was “Mike” and gave her a business card with the same name, according to the warrants.
Chris Austin said he was asleep when law enforcement officers — mainly from the CHP — knocked on his door in Paso Robles and raided his house.
“They came in with machine guns, dogs. A helicopter was overhead,” said Austin, 33. “The house was destroyed.”
Austin said two of his children were placed in protective custody with his father-in-law. Officers seized computers from his separate mortgage and real estate business, leaving him unsure of how he and wife Amy Austin, who was also arrested, would make their house payments.
The others arrested were: Thomas Sandercock, 34, of Paso Robles; Rachel Tamagni, 57, and Charles Tamagni, 47, of Paso Robles; Peter Miller, 56, of Paso Robles; Steven Gordon, 55, of Pismo Beach; Valarie Hosking, 41, and David Hosking, 46, both of Pismo Beach; Roy Allred, 49, Shelly Allred, 50, and Rianna Allred, 21, all of Atascadero; and Richard Jones, 60, Mei Ching Hsiung, 51, and Ricky Milne, 58, all of Tarzana.
So far, Amy Austin, Sandercock and the Hoskings have been arraigned. On Dec. 30, Valarie and David Hosking pleaded not guilty to two counts of selling or furnishing marijuana. Sandercock pleaded not guilty Thursday to one felony charge of possessing marijuana, and Amy Austin pleaded not guilty to a felony charge of possessing marijuana and two misdemeanor counts of child endangerment.
The delivery services investigated were Caanafornia Health Services of Atascadero; Santa Barbara Collective of Tarzana, near Los Angeles; Open Access Foundation, Trilogy Health Services and Harmonic Alliance, all of Paso Robles; and Hopeful Remedies and West Coast Caregiving out of Pismo Beach.
Attorney Fisher said his clients met while waiting in a cold van for several hours while law enforcement continued to serve search warrants and make arrests. One man told Fisher he began to urinate on himself after he had been in the van for more than two hours.
The Tamagnis told Fisher their Chihuahua died of cardiac arrest shortly after the arrests took place.“Their whole lives are turned upside down,” Fisher said. “Everybody’s worst nightmare, they’re living it right now.”
John, the task force commander, declined to comment on the manner of the arrests.
“I’m not going to comment on any of that stuff. I don’t know if it’s true or not,” he said.
John said that 45 to 50 people from various law enforcement agencies assisted with the arrests but that the task force has 15 members from agencies including Arroyo Grande, Grover Beach, Paso Robles and San Luis Obispo police, the University Police Department at Cal Poly, the District Attorney’s Office, state parole office, County Probation and Sheriff’s departments, and the state Department of Justice.
He declined to identify any of the members and said they are undercover officers.
Hermes, Eanes and Fisher were critical of the way law enforcement handled the investigation and arrests.
“The medical marijuana dispensaries have worked hard in the community to provide a needed service,” Eanes said in a statement. “Taxpayer money would have been more effectively (spent) fighting the real drug/crime problems in this community.”
Nate Bradley, a former police officer in Wheatland, Calif., and now a member of Law Enforcement Against Prohibition, said he’s also frustrated that “there are victims out there of real crimes who need cops investigating those crimes.”
However, John said: “This is an illegal marijuana issue. There was nothing medical about the marijuana we took. I can reassure you that my agents are following leads on all types of drugs — we are dealing with prescription drugs, meth labs, cocaine.”
The delivery services
Chris Austin said he started his collective, Open Access Foundation, because his father was suffering from melanoma, a form of cancer.
He said he now has about 75 members, who suffer from cancer, chronic pain, insomnia and other illnesses. The average age, he said, is about 50, and about half are terminally ill.
Chris Austin called his business “a true collective,” accepting donations from members and tracking each plant as it was harvested.
Fisher said his clients were operating small businesses, most out of their homes.
“This was not a profitable business for them,” he said. “They were organized as nonprofits, but most of them were in the red.”
State law does not require collectives to register as nonprofits, though it is helpful to do so, Hermes said.
A search of the collectives on the attorney general’s website shows only one — Trilogy Health Services — is a registered mutual benefit nonprofit.
The attorney general guidelines note that medical marijuana transactions are subject to sales tax, and so businesses engaging in transactions must receive a seller’s permit from the state Board of Equalization.
A review of the addresses at which law enforcement officials served search warrants showed that Trilogy Health Services and Open Access Foundation had active seller’s permits.
The attorney general guidelines also indicate that some cities and counties require collectives and cooperatives to get business licenses.
Trilogy Health Services is the only business with a current license. The business received one from Paso Robles on Aug. 19, 2009, for health and fitness counseling.
West Coast Caregiving had a business license in Pismo Beach from 2007 until March 2009, for “home health care services.”
No other licenses were found for the other businesses by staff in Atascadero, Paso Robles and Pismo Beach.
Each city has laws prohibiting medical marijuana dispensaries from opening.
“We’ve argued for some time that banning distribution is tantamount to refusing to implement state law,” Hermes said.