Vol. 26 No. 5- U.S. Attorney Warns Oakland About Allowing Large Scale Cultivation Of Marijuana


February 4, 2011

Recently, the Oakland City Council passed Ordinance No. 13033 permitting “industrial cannabis cultivation and manufacturing facilities.”  This raised questions on the part of many as to the legality of not only allowing, but issuing city permits for, such large scale cultivation operations.  Even under the California’s Compassionate Use Act such ventures appear to be illegal, but it was also prohibited under the federal Controlled Substances Act.

However, the question arose as to what, if any, action would be taken by the federal government? Last year, the U.S. Attorney, Eric Holder, had stated that the Department of Justice would not expend limited federal funds and personnel in arresting and/or prosecuting persons who were involved in the cultivation, use, transport, etc. of marijuana for medical purposes, so long as they were in compliance with their state laws which permitted such activity.  That question now appears to be answered in a letter dated 2/1/11, from the U.S. Attorney for the Northern District of California to the City Attorney of Oakland.

U.S. Attorney Warns City

In that letter, set forth below, the City is put on notice that the Department of Justice “is concerned about the Oakland Ordinance’s creation of a licensing scheme that permits large scale industrial marijuana cultivation and manufacturing as it authorizes conduct contrary to federal law ….”  The U.S. Attorney informs the City Attorney that “the Department is carefully considering civil and criminal legal remedies regarding those who seek to set up industrial marijuana growing warehouses in Oakland pursuant to licenses issued by the City of Oakland.”

February 1, 2011

John A. Russo, Esq.
Oakland City Attorney
1 Frank Ogawa Plaza, 6th Floor
Oakland, California 94612

Dear Mr. Russo:

I write in response to your letter dated January 14, 2011 seeking guidance from the Attorney General regarding the City of Oakland Medical Cannabis Cultivation Ordinance. The U.S. Department of Justice is familiar with the City’s solicitation of applications for permits to operate “industrial cannabis cultivation and manufacturing facilities” pursuant to Oakland Ordinance No. 13033 (Oakland Ordinance). I have consulted with the Attorney General and the Deputy AttorneyGeneral about the Oakland Ordinance. This letter is written to ensure there is no confusion regarding the Department of Justice’s view of such facilities.

As the Department has stated on many occasions, Congress has determined that marijuana is a controlled substance. Congress placed marijuana in Schedule I of the Controlled Substances Act (CSA) and, as such, growing, 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.

The prosecution of individuals and organizations involved in the trade of any illegal drugs and the disruption of drug trafficking organizations is a core priority of the Department. This core priority includes prosecution of business enterprises that unlawfully market and sell marijuana. Accordingly, while the Department does not focus its limited resources ort seriously ill individualswho use marijuana as part of a medically recommended treatment regimen in compliance with state law as stated in the October 2009 Ogden Memorandum, we will enforce the CSA vigorously against individuals and organizations that participate in unlawful manufacturing and distribution activity involving marijuana, even if such activities arepermitted under state law. The Department’s investigative and prosecutorial resources will continue to be directed toward these objectives.

Consistent with federal law, the Department maintains the authority to pursue criminal or civil actions for any CSA violations whenever the Department determines that such legal action is warranted. This includes, but is not limited to, actions to enforce the criminal provisions of the CSA such as Title 21 Section 841 making it illegal to manufacture, distribute, or possess with intent to distribute any controlled substance including marijuana; Title 21 Section 856 making it unlawful to knowingly open, lease, rent, maintain, or use property for the manufacturing, storing, or distribution of controlled substances; and Title 21 Section 846 making it illegal to conspire tocommit any of the crimes set forth in the CSA. Federal money laundering and related statutes which prohibit a variety of different types of financial activity involving the movement of drug proceeds may likewise be utilized. The government may also pursue civil injunctions, and the forfeiture of drug proceeds, property traceable to such proceeds, and property used to facilitate drug violations.

The Department is concerned about the Oakland Ordinance’s creation of a licensing scheme that permits large-scale industrial marijuana cultivation and manufacturing as it authorizes conduct contrary to federal law and threatens the federal government’s efforts to regulate the possession, manufacturing, and trafficking of controlled substances. Accordingly, the Department is carefully considering civil and criminal legal remedies regarding those who seek to set upindustrial marijuana growing warehouses in Oakland pursuant to licenses issued by the City of Oakland. Individuals who elect to operate “industrial cannabis cultivation and manufacturing facilities” will be doing so in violation of federal law. Others who knowingly facilitate the actions of the licensees, including property owners, landlords, and financiers should also know that their conduct violates federal law. Potential actions the Department is considering include injunctive actions to prevent cultivation and distribution of marijuana and other associated violations of the CSA; civil fines; criminal prosecution; and the forfeiture of any property used to facilitate aviolation of the CSA. As the Attorney General has repeatedly stated, the Department of Justice remains firmly committed to enforcing the CSA in all states.

I hope this letter assists the City of Oakland and potential licensees in making informed decisions regarding the cultivation, manufacture, and distribution of marijuana.

Very truly yours,
Melinda Haag
United States Attorney
Northern District of California

    cc:  Kamala D. Harris, Attorney General of the State of California
Nancy E. O’Malley, Alameda County District Attorney


Unless there is some action coming from Washington, D.C. which countermands the statements in the letter, it appears to be fairly clear that the federal government will not condone cities or counties allowing cultivation of marijuana on such a large scale.  We already have had several court decisions in California which address the cultivation of marijuana for medical use.  Cultivation is permitted, under state law, to be done by the “qualified patient” or by his or her “primary caregiver.” In the case of People v. Mentch, (2008) 45 Cal.4th 274, the California Supreme Court held that the CUA “provides partial immunity for the possession and cultivation of marijuana to two groups of people: qualified medical marijuana patients and their primary caregivers. We hold that a defendant whose care giving consisted principally of supplying marijuana and instructing on its use, and who otherwise only sporadically took some patients to medical appointments, cannot qualify as a primary caregiver under the Act….” (Emphasis added.)

On August 18, 2009, the Fourth District Court of Appeal, issued an opinion in the case of People vs. Hochanadel, et al. holding, among other things, that “under the CUA, a “primary caregiver” is defined as the individual designated by the person exempted under this section who has consistently assumed responsibility for the housing, health, or safety of that person.”

The Court of Appeal also noted that, in People vs. Mentch, the Supreme Court held that “to be a primary caregiver…an individual must show that he or she (1) consistently provided care giving, (2) independent of any assistance in taking medical marijuana, (3) at or before the time he or she assumed responsibility for assisting with medical marijuana.”

Mentch also concluded that a person does not qualify as a primary caregiver merely by having a patient designate him or her as such, or by the provision of medical marijuana in itself.  Rather, the Supreme Court stated, “the person must show a care taking relationship directed at the core survival needs of a seriously ill patient, not just one single pharmaceutical need.”

With that said, it is hard to imagine that those involved in the massive growing of marijuana, as anticipated by the Oakland ordinance, could meet the definition of being one’s “primary caregiver.”  As such, the cultivation of such an amount of marijuana would appear to be in violation of both federal and California law.

Should your city or county be considering a similar approach to that taken by Oakland, it would be prudent to first secure legal advice and guidance from the city or county’s designated legal advisor. As always, if you wish to discuss this matter in greater detail, please feel free to contact me at (714) 446 – 1400 or via e-mail at mjm@jones-mayer.com.