The medical marijuana industry in California is facing collapse due to increased federal crackdowns on dispensaries and growers, as well as more restrictive local ordinances. While California law has allowed medical marijuana since 1996, the federal government is ramping up enforcement actions like raids and seizures. As a result, many dispensaries and caregivers are being put out of business. Additionally, California cities are passing new regulations in response to the large number of dispensaries that have opened with minimal oversight. This has led to an inconsistent patchwork of state and local laws, creating a confusing environment for the marijuana industry.

1. California's marijuana industry under attack
The medical marijuana industry in California is on the verge of collapse, with growers and
dispensaries like G3 being run out of business by federal crackdowns and local ordinances.
Since 1996, the state has allowed marijuana growers and distributors to operate legally with little
oversight. All it takes is a doctor's note or a claim that one is a "caregiver," a loosely interpreted
term. More than 1,000 dispensaries are in business, employing thousands more and providing state
and local governments as much as $105 million in taxes each year.
But federal prosecutors are getting tougher. Last year, law enforcement agents seized 3.9 million
plants and could collect more this year.
Marijuana advocates say the attack collides with California's law and goes against a campaign
promise by President Obama to not circumvent the state's relaxed rules. But California's four U.S.
attorneys, who banded together last year, cite a need to combat spillover to states where the
substance isn't legal.
U.S. Attorney Ben Wagner justifies raids on the presumption that more marijuana is grown in the
fertile lands of his Eastern District than can ever be legally consumed.
"There was an explosion of marijuana production, and it's everywhere," he said. "And it's being
shipped across the country."
Related video: Getting grandma to try pot
California cities are also on the attack, imposing new regulations to contain an industry that has
grown out of control.
In some cities, streets are lined with dispensaries and doctors who, with minimal examination, hand

2. out notes suggesting marijuana treatment.
What were supposed to be nonprofits routinely make sales upwards of $3 million a year, according
to several tax court records. And these businesses often prefer to keep supply and retail transactions
cash-only to avoid drawing attention from government authorities.
California now has a patchwork of inconsistent laws, making for a confusing business environment.
An outdated list kept by the pro-cannabis group Americans for Safe Access shows that in California,
46 cities and 10 marijuana dispensaries California counties allow the drug, 178 cities and 20
counties don't, and the rest have temporary measures or none at all.
That means a business could be complying with state rules but violating a local ordinance and
breaching federal law.
"It's a medical marijuana California mess," said Charley Pappas, who until recently ran Divinity Tree
Patients Wellness Cooperative, a marijuana dispensary in San Francisco.
Like most driven to open their own dispensaries, Pappas started using the drug long before he
opened a storefront in 2005. A gunshot wound from a 1973 home invasion robbery in Philadelphia
left him a quadriplegic, and marijuana's analgesic effects ease his muscle spasms. He launched the
cooperative to offer others similar treatment, supplying nearly 7,000 patients until his landlord
received a stark warning from the federal government: kick him out or lose your property.
Related: Inside the 'Social Network' house
The https://weedmaps.com/ tangled web of laws also ensnared Aaron Sandusky, whose dispensaries
once supplied close to 12,000 patients. His stores, G3, were located in Colton, Moreno Valley and
Upland, and each instituted bans. Although he kept documentation to show patients had doctors'
notes for thousands of plants he grew, it wasn't enough. The killing stroke came with the Drug
Enforcement Agency when officers raided his stores and pot-growing warehouse.
"I went above and beyond to make sure we were operating under the guidelines of the state,"
Sandusky said. "I didn't expect any of this."
Sandusky and five co-workers were arrested June 14 and charged with conspiracy to manufacture
and intent to distribute. He spent the next eight weeks in jail. Agents seized his money and crop.
Sandusky, out on bond but forced to stay at home, wears a court-ordered ankle bracelet monitor.
The raid also left the company's 50 full-time workers unemployed and without health benefits.
Similar events occur every week in California, with government agents closing down businesses that
claim to be legitimate under state law.
Sandusky and others remain adamant they only operate locally and legally -- and they're desperate
to find a way to follow the rules and be left alone.
"No one's shown me a number saying you can't exceed this many plants. I would love that kind of
input and guidance," Sandusky said.
CNNMoney (New York) August 30, 2012: 6:19 AM ET
http://money.cnn.com/2012/08/30/smallbusiness/california-marijuana/