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Deleware's Medical Marijuana Law Busted


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Delaware's legalization of medical marijuana has fizzled in the wake of legal opinions that growers, distributors and state employees could be prosecuted under federal drug laws.


Gov. Jack Markell has suspended the regulation-writing and licensing process for medical marijuana dispensaries -- effectively killing the program -- and criticized the federal government for sending mixed signals on law enforcement, The News Journal has learned.


U.S. Attorney Charles M. Oberly III has adopted the hard-line stance that just came out of President Barack Obama's Department of Justice. This stance accentuates the inherent conflict between federal marijuana laws and what is playing out in states that have authorized limited marijuana use for medicinal purposes.


"[G]rowing, distributing and possessing marijuana, in any capacity, other than as part of a federally authorized research program, is a violation of federal law regardless of state laws permitting such activities," Oberly wrote Thursday to Markell's attorney. "Moreover, those who engage in financial transactions involving the proceeds of such activities may also be in violation of federal money laundering statutes."


Markell's office told The News Journal on Friday that Oberly's stance prevents the Department of Health and Social Services from issuing licenses to medical marijuana dispensaries, whose employees and owners may be subject to federal raids and prosecution.


The governor's office recently sought guidance from Oberly on whether state employees responsible for regulating and inspecting licensed, not-for-profit medical marijuana dispensaries could do their jobs without fear of prosecution.


"State employees who conduct activities mandated by the Delaware Medical Marijuana Act are not immune from liability under" the Controlled Substances Act, Oberly wrote.


In a statement Friday, the Democratic governor said he had no choice but to stop the program.


"To do otherwise would put our state employees in legal jeopardy, and I will not do that," Markell said.


With the federal government firmly against large-scale dispensaries, state legislators may need to consider amending the law to allow doctor-approved patients to grow their own pot at home, said Rep. Helene Keeley, D-Wilmington South.


"Maybe we have to tweak the current law to make this happen," Keeley said. "We can't give up."


New approach


Oberly's letter is evidence of the U.S. Department of Justice's changing attitude toward state medical marijuana laws since Obama took office.


During his campaign for president in 2008, medical marijuana advocates were encouraged by Obama's vow to respect state laws. Oberly, a Democrat and former attorney general, is an Obama appointee.


"I think it's a great betrayal of what he said when he was running for office," said Karen O'Keefe, director of state policies at the Marijuana Policy Project, a Washington, D.C.-based lobbying group that helped write Delaware's law. "It's been a great disappointment."


In 2009, when the first version of a medical marijuana bill was introduced in the Delaware General Assembly, a key impetus for the debate was the newly elected Obama's pledge not to send his Department of Justice after those involved in state-sanctioned medical marijuana operations.


That policy was codified in an October 2009 memo written by then-Deputy Attorney General David Ogden that said prosecutions of medical marijuana patients and caregivers was "unlikely to be an efficient use of limited federal resources."


With the Ogden memo as its backdrop, Delaware's legislative effort continued, culminating with the passage of the Medical Marijuana Act last May.


A month later, new Deputy Attorney General James M. Cole issued a memo with a different tone in response to inquiries from a group of federal prosecutors nationwide.


Drawing a corollary from the Ogden memo, Cole said patients and their caregivers were still safe from enforcement action but prosecutors were never meant to ignore "large-scale, privately owned industrial marijuana cultivation centers" like those authorized in some states.


In the months after the Cole memo, federal law enforcement agencies raided growers and dispensaries in California and Montana.


A U.S. attorney in northern California sent a letter to local public officials, warning them to quell their efforts to regulate and license marijuana growers or face criminal charges.


In January, prosecutors in Colorado mailed letters to two dozen medical marijuana dispensaries located within 1,000 feet of schools, notifying them of enhanced federal penalties for drug offenses committed near schools.


Legal worries


Since Delaware's passage of its medical marijuana law, the state Division of Public Health has been studying similar laws in other states and writing regulations that officials expected to publish this spring. Markell's recommended budget for the next fiscal year includes $480,000 for the implementation of the program, funded by proceeds from licensing dispensaries and patients.


Spurred by the Cole memo and the recent enforcement efforts, Markell's legal counsel, Michael A. Barlow, sought Oberly's guidance on the state's Medical Marijuana Act in early December.


"It was our goal to exercise some caution before we move forward, to make sure we have some dialogue with federal prosecutors in Delaware and solicit their input," Barlow said.


Specifically, Barlow said, the administration is concerned that the medical marijuana distribution plan outlined in Delaware's law falls under the parameters outlined in the Cole memo.


The statute mandates the establishment of one marijuana dispensary -- called a Compassionate Care Center -- in each of the three counties, with the possibility of more centers in future years.


Operators of the centers are to be nonprofit entities selected via a competitive bidding process administered by the state's Division of Public Health, and would be responsible for cultivating, preparing and distributing the marijuana in cooperation with state regulators and under tight state control.


"If you look at the Cole memo, it focuses on this large-scale, industrial distribution model, and what we have in Delaware is a distribution model that centralizes that into one place," Barlow said. "It seems to be something the Cole memo is looking to specifically."


The administration was also worried that Delaware's medical marijuana distribution structure could put state employees in danger of federal prosecution because of their close work with the dispensaries.


"The governor's concern is that we're not doing things to put state employees potentially in the way of the federal government's new enforcement," Barlow said.


In his response to Barlow, Oberly reaffirmed the Cole corollary to the Ogden memo and said the DOJ will not target patients or caregivers, but distribution is to be treated differently.


"Enterprises engaged in the cultivation, manufacture and sale of marijuana directly violate federal law," he wrote. "Individuals and organizations that participate in the unlawful cultivation and distribution of marijuana could be subject to civil and criminal penalties."


Oberly also said state workers are fair game for prosecution, just like anyone who is part of a marijuana distribution operation.


Prosecution decisions would made on a case-by-case basis, Oberly said.


The compassion centers were the linchpin of the medical marijuana bill's getting bipartisan support in the Delaware General Assembly, Keeley said.


"In the absence of such compassion centers, patients may be forced to obtain marijuana illicitly, unlawfully grow their own marijuana or forgo use of medical marijuana entirely," Barlow wrote Friday in response Oberly's Thursday letter. "That appears to be the unfortunate consequence of a federal policy that appears to offer mercy to cancer patients and others with a serious medical need for marijuana, but actually threatens criminal and civil sanctions for those who might help them safely obtain that relief."




The Marijuana Policy Project, the group that helped draft Delaware's medical marijuana law, said the tightly regulated nature of the state's implementation plan should have kept federal prosecutors at bay.


"In those states that have vague laws that allow dispensaries, that's where we've seen enforcement," O'Keefe said.


O'Keefe said medical marijuana laws in California and Montana, for example, are far more lenient in their allowances for privately owned, for-profit growing operations and dispensaries. Delaware's law initially restricts medical marijuana distribution to one dispensary in each county operated by a not-for-profit organization.


Seventeen states have medical marijuana laws, and federal enforcement actions are taking place in only a few jurisdictions, O'Keefe noted.


"New Mexico and Maine have dispensary systems that are up and running with no problems," she said.

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I guess this is why we have the Patient Caregiver system, Keeps the big grows out, I think the Michigan Legislature should keep there hands out of out law, Just to be safe,


i think that is why the legislature wants the big grows so that we can't get are meds after a dea raid the government does not want a grow in every ones basement

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With respect to the Michigan legislature, I think it is just politics as usual. The people's initiative does not allow for easy tax collection so the state can't get their cut.


More importantly, some politicians seem to thrive on political favors and repayment for those favors. With our patient-caregiver system that is in place, these politicians have not gotten their personal cut of the medical cannabis pie. They will push for state run grows and dispensaries very soon. 'The patients need protection!!' will be the new mantra. They will then influence who gets the 'permits' and wait for repayment....vacations, jobs for friends, etc.

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Taxes area a false argument for any Cannabis related sales, transfers ect....



imo, Taxes are a Mute point as we Do Not pay taxes on medicine or medical equipment. in that respect, cannabis would be No different. you cant/dont pay taxes on a state or federal level.



as ive stated since ive been visiting cannabis specific forums. If its a Brick and Mortar entity, its a federal target, taxes be damned.

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