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Supervisors extend pot cultivation ban; Purple Cross RX robbed

Supervisors adopt changes to cannabis ordinance, as criminal element appears to be already infiltrating industry.
McPhail announced on this Facebook post that two people attempted to steal product and were confronted by armed security.
McPhail announced on this Facebook post that two people attempted to steal product and were confronted by armed security.
Sheriff Darrin Thompson believes "investors" stole $500k in marijuana from Purple Cross RX.
Supervisor Anthony Botelho said registration is important to support law enforcement.
John Guertin believes registration will help code enforcement to be able to handle complaints from neighbors.
Elia Salinas wondered if Child Protective Services will become involved if people who have children are forced to grow marijuana indoors.

At a public meeting held Nov. 21, San Benito County Supervisors adopted changes to cannabis ordinance, extending a cultivation ban until April. The board spent time discussing law enforcement concerns and Sheriff Thompson intimated that cartels might be moving into California, and perhaps even San Benito County. Within a couple of days of the meeting, Purple Cross RX, a marijuana dispensary, was robbed, leaving questions about legal clarity and law enforcement capability.

During the hearing, in a 3-2 vote the San Benito County Board of Supervisors (BOS) decided to add a registration requirement for all cannabis cultivation, including for personal use, as well as a fee to the county’s ordinance, which has yet to be approved.

BOS had previously approved a resolution to deny permits to 28 cannabis operations that had applied for them until the ordinance comes back to the board next April. The move essentially bans all marijuana cultivation in the county during that period until a taxing ordinance is adopted, if it ever is. Supervisors Mark Medina and Jaime De La Cruz voted against the resolution only because of the registration requirement.

An overview of the state cannabis laws explained that over the past two years there have been substantial changes in state law relating to cannabis cultivation and distribution. These included the enactment of detailed state regulatory schemes for medicinal cannabis (the Medical Cannabis Regulation and Safety Act) and non-medicinal cannabis (sometimes referred to as "recreational marijuana" or “recreational cannabis”) (Prop. 64, the Adult Use of Marijuana Act). On June 27, 2017, Governor Jerry Brown approved Senate Bill 94, which repealed MCRSA and includes certain provisions of MCRSA in the licensing provisions of AUMA. Under SB 94, these consolidated provisions are known as the Medicinal and Adult-Use Cannabis Regulation and Safety Act ("MAUCRSA"). These new state laws preserve strong local control over both personal cannabis cultivation and cannabis business activities, including:

  • Outdoor cultivation may be regulated or completely banned.
  • Cultivation of more than six plants on any premises may be regulated or completely banned.
  • Personal cultivation of six or fewer plants, conducted indoors "inside a private residence, or inside an accessory structure to a private residence" cannot be completely banned, but can be reasonably regulated.

According to county staff, many local jurisdictions throughout California are studying their existing regulations to determine if any changes are required or desirable as a result of these new state laws. Upon review of San Benito County’s Personal Cultivation of Cannabis Ordinance, the following changes were recommended to facilitate enforcement and maintain consistency with neighboring jurisdictions:

  • Prohibit outdoor cultivation (defined as any cultivation occurring outside of a residence of permitted accessory structure) of any cannabis plants.
  • Make minor revisions to correct typos.
  • Update citations to State law in light of SB 94 and correct citation to County Code.

Sarah Dickinson, county counsel, told the board that the resolution had already gone before the Planning Commission, which recommended the registration requirement be kept and outdoor cultivation be prohibited. Supervisor Anthony Botelho asked Dickinson for clarification on the ordinance that there was an exemption allowing outdoor growing of six cannabis plants for personal use. She told him that the changes being proposed would disallow any outdoor growing, regardless of the number of plants. He then asked if there would be a required registration to grow cannabis for personal use. She said there currently is a requirement for that and it will remain in the ordinance, primarily to help code enforcement officers to seek out cannabis that has not been registered with the county. She also said that presently there are no fees associated with registration, and that consideration be given to devising a simplified online registration. Botelho said he favored a fee be attached to registrations. John Guertin, Resource Management Agency (RMA) department head, told Botelho even with limited personnel, RMA should be able to handle registration and fees without much difficulty. Botelho said he was concerned, if there were a conflict between neighbors and code enforcement were called out, that the county be reimbursed. Dickerson told him the county could assess the property owner and even attach a lien to the property.

Supervisor Medina questioned the rationale of imposing fees on those growing six plants for personal use when it was legal to do so under California law. He said RMA is seriously understaffed and that code enforcement has had to neglect some areas of the county because of being understaffed, and expressed amazement that RMA was proposing adding to code enforcement officers’ duties.

During public comments, cannabis advocate Elia Salinas said people should not have to register to grow plants for their own personal use. She questioned if a neighbor calls in a complaint who would pay; them or the one growing the cannabis. She also questioned if someone complained about a neighbor growing cannabis who has children, and if Child Protective Services (CPS) would have to be involved because the county was forcing them to grow indoors. Therefore, she recommended that people be allowed to grow outdoors and not have to register.

Another speaker from San Juan Bautista said as a single mother who uses cannabis for medical reasons grows her six plants outside so she will not lose benefits because of having a federal schedule-one drug, which marijuana is, inside with her children. She said she has never had any issues with CPS and she did not think that because she was using marijuana for medical reasons her parenting should be called into question. She also expressed concern, as a low-income person receiving subsistence payments, that she could not afford to pay a fee along with the lights and other equipment needed to grow marijuana inside her home.

Jack Kirk, a long-standing opponent of cannabis, said property owners living next to someone growing cannabis had a right to live without the associated odors. He said while he had friends who voted for Prop. 64, they did so in order to allow people who needed cannabis for medical reasons to have it, but not necessarily so it could be grown next door. He said he was in favor of registrations to aid law enforcement in finding where plants were being grown.

Marty Richman, who supports marijuana for pharmaceutical purposes, but opposes recreational use, said if he thought registration would help law enforcement he would support it, but said on a practical basis he didn’t see what it would accomplish. He wondered if people were required to register to grow six plants if those registrations would become public documents that anyone could ask for.

“I want real enforcement on cannabis,” he said, “we’re going to have enough enforcement problems as it is. Are we really going to be able to get around to someone who has six plants? I tell you when someone calls to complain about someone growing six plants I can’t see the S.W.A.T. team coming out or helicoptering in at a cost of $150,000 to put this person in prison.”

De La Cruz added his support to Medina’s proposal that the registration requirement be removed. Medina maintained he wants all plants, regardless of the number, grown indoors because every complaint he has received has concerned the “stench” from plants during harvesting outdoors. Botelho said what “indoors” meant to him was a tool shed more so than in a house. He said he favored registration primarily to re-coop the cost of code enforcement being called to someone’s home to investigate a complaint. He was told that he was wrong, though, when he said he thought people who were using medical marijuana already had to register, then went on to compare registering to grow marijuana plants to having to register pets or a burn barrel.

“There needs to be some consequences for not obeying the rules,” he said. “We can’t just keep having the wild wild west, like we do now.”

Supervisor Robert Rivas questioned Dickinson about the expectations of the registration, asking if they would just be filed away in a drawer or be used to create a database. She responded that the forms would most likely be used if a code enforcement officer smelled cannabis or a complaint was called in and the officer would call to see if an address were registered. Guertin said if a database were created RMA would be the keeper of that information and only authorized personnel would be able to access it.

Supervisor Jerry Muenzer said the board has been working on the ordinance for more than two years and no matter what it eventually evolved into, it would not be perfect. He asked if the board would make more changes to the ordinance would that start another two-year process. Dickinson said she did not anticipate an overly long time would be involved.

De La Cruz thought that there might be unintended consequences to requiring registration, such as homeowner’s insurance being stigmatized or perhaps the right to carry a gun. He called it a no-win situation when neighbors begin reporting on one another and supervisors needed to address it.

When Rivas asked how the enforcement would be different under a registration requirement, Guertin said, “From a code enforcement perspective, we’re dealing with an unknown world and there isn’t a lot of real-world experience that we can draw from yet.”

Guertin added that even though most people will be law-abiding, when law enforcement walks into a situation there are often other criminal activities taking place.

“People don’t want to talk about that, but that is the experience of code enforcement and other jurisdictions,” he said. “I’d much rather have the sheriff’s office go into those situations first because they’re trained for that.”

Enforcement Difficult Due to Unclear Laws 

Sheriff Darrin Thompson described the process of enforcing the ban being imposed on the 28 applicants who cooperated with the county, as well as any others who did not cooperate. He said once a judge authorizes an abatement order, deputies will go to each site to abate the grows, in whatever form the judge determines, which is unclear now because it’s never been done in the county.

“In a criminal case, we would go in and uproot or cut all the product and store some of it for testing to use as evidence in a criminal case,” he said. “In a civil case, the process is much longer; starting with a notification they’re in violation and a recommendation from the county to cease and desist, and then a hearing.”

Thompson said the civil process could drag on, but he’s not sure how long because his department has only been involved in criminal cases. While rumors, sometimes even repeated in supervisor meetings, that there could be as many as 400 illegal grows scattered throughout the county, the sheriff doubts that’s the case.

“We’ve already done ordinance and criminal enforcement on all the grows on our radar with exception of the applicants,” he said, as he maintained there could be as many as 35 in the county. He said he has heard the 400 number, but challenges anyone who believes that number to point him to just one. So far, no one has done so.

“No one’s reported their locations and our people who are looking for them aren’t seeing them,” he said. “What we are seeing are the grows associated with the applicants.”

Thompson said even though adult-use, or recreational marijuana, will soon be legal in the state, no one in the county can grow it for either recreational or medical use without first obtaining a county or city permit, and then a state permit, which will not happen, as far as the county is concerned, until at least April. Hollister, though, has already issued numerous permits for cultivation, processing, distribution and testing.

So, what’s about to happen is that once those who have obtained their permits within Hollister, and then the state, they can begin operations, while all cannabis activity in the surrounding county, as well as San Juan Bautista, is banned.

If someone, whether one of the original 28, or otherwise, continues to grow marijuana in the county, if there is no ordinance or no judge has ordered him to take abatement action, the sheriff said his department has no authority to shut down the operations. He said he can’t demand to see a grower’s books unless a judge has ordered a search warrant if there is evidence of a criminal act

Thompson said because Hollister has moved ahead with permitting, while the county is banning marijuana, “things will get complicated,” and won’t be answered until the state has its regulatory infrastructure in place Jan. 1, 2018. He said law enforcement has advised the county not to permit any cannabis businesses until the state infrastructure is in place.  

“But counties and marijuana entrepreneurs that are hungry for money have wanted to get into business now and adapt to changes that occur,” he said. “That makes sense to some people and complicates other people’s lives.”

One local farmer estimated the county has already lost as much as $25 million in potential revenue because there is no ordinance. The sheriff said he is not aware of anyone in the industry paying any taxes and that field workers and contractors are being paid in cash. The farmer, who grows vegetables, commented that he has been threatened with OSHA violations because of one worker’s false accusations and even had his books thoroughly examined. He wonders why marijuana growers aren’t held up to the same standards.

“There’s no employer-employee documentation,” Thompson said. “We know farmers who are taking cash for land and employees are taking cash for their wages, so there is a lot of money unaccounted for. That would be a function of the state franchise tax board or the IRS.”

He described a “fence of protection” that growers have been able to erect by establishing themselves as medical marijuana providers under a collective, which he said are very difficult to investigate because they have shells under which they can hide the money.

“The value of having a county ordinance is that it will bring the clarification to how these places can operate and then the accountability can be in place,” he said, adding that because there is no ordinance, resulting in ambiguity, it takes more people to try to enforce laws that are unclear, at best. He said an ordinance would actually reduce the number of people it would take to enforce compliance.

While enforcing marijuana regulations on people who are simply trying to cash in on the new California gold rush might seem almost pointless to those who play by the rules, the spillover from hard-core criminals who play by their own rules will likely infiltrate any business sector promising multi-millions in profits, including those in San Benito County.

According to a 2011 Marijuana Business Daily article, Mexican cartels have created a “mafia-like environment defined by threats of violence and other forms of intimidation.”

The story described how cartel members have duped unsuspecting farmers by leasing their lands to grow medical marijuana, which is funneled to the cartels and distributed through their networks. If a farmer attempts to pull out of the partnership or notify the police, the cartel threaten the farmer or his/her family. The cartels will often not pay the workers, who have little recourse because many are illegal immigrants.

“If you try to dispute something with them,” said retired L.A. County Sheriff Sgt. Richard Valdemar in the story, “they’re not going to take you to court and sue you. They’re going to kill you and you’re going to be found in one of those fields, buried.”

Evidence that this may be the case happened last week when there was a break-in at Purple Cross RX, one of the two operations to secure a cannabis dispensary permit in Hollister at 1785 San Felipe Road. Scott McPhail, one of the owners, announced on Facebook that two people attempted to steal product and were confronted by armed security. He even wrote that, “One might be leaking blood.”

Sheriff Thompson verified that there was a burglary report from Purple Cross RX, and it’s currently under investigation. He said the security guard did fire at one of the people who had reportedly pulled a knife.  He said the reason the department has not issued a press release yet was because McPhail stated that he had video of the break-in.

“We’d like to see that video to see if we have a chance of solving the case,” Thompson said. “McPhail also reported a half million dollars in product had been stolen in an inside job. That’s a half million in processed and packaged product. He’s supposed to provide us information on that with the same set of videos.”

Sheriff Thompson led credence to the theory that cartels might be moving into California, and perhaps even San Benito County.

“It takes a lot of money to run these operations,” he said. “So, they have investors, and now that they’re not going to be allowed to continue business, these investors are trying to find ways to get their money back. They’re taking their assets that belong to these marijuana people and walking away with them. That’s what we believe happened at Purple Cross. They went in and took a half million in product to sell on the black market to try to get some of their investment back.”

Thompson dropped another bomb when he said, “McPhail told my deputy who was out there that night, ‘We’re moving everything to the city, but I’m keeping this location because, according to my sources, the county is going to let me open back up in April.’”

Responding for the county, County Attorney Barbara Thompson told BenitoLink by email Nov. 28: "All cultivation greater than six plants is currently prohibited in the unincorporated areas of County. Prior to any commercial cultivation being allowed in the County, a new ordinance would need to be adopted specifying the date that cultivation could begin. If an ordinance allows cultivation prior to the November 2018 election, the ordinance could also provide that cultivation cease if a ballot measure is disapproved by the voters. The County is not currently accepting or evaluating any applications for commercial cultivation or other cannabis business activity."

About:
John Chadwell (John Chadwell)

John Chadwell is a general assignment reporter for BenitoLink, a freelance copywriter, ghostwriter, scriptwriter and novelist. He is a former U.S. Navy Combat Photojournalist and is an award-winning writer who has worked for magazine, newspapers, radio and television. He has a BA in Journalism and Mass Communications from Chapman University and underwent graduate studies at USC Cinema School. John has worked as a script doctor and his own script, God's Club, was released as a motion picture in 2016. He has also written eight novels, ranging from science fiction to true crime that are sold on Amazon. To contact John Chadwell, send an email to: johnchadwell@benitolink.com.

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