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California Police Ramp Up Asset Seizures and No Knock Raids of Legal Cannabis Companies in Advance of Legalization Vote

At 7:37 a.m. on January 28, 2016, nearly 30 officers from the San Diego joint narcotics task force conducted a raid on Med-West Distributors, a licensed medical cannabis extraction company. The officers, decked out in helmets and tactical gear and clutching assault rifles and handguns, used a sledgehammer to open the door, and then burst into the lobby. Once inside, the task force arrested two employees present, cracked open the company’s safe, and collected its inventory–more than 30,000 cartridges of cannabis oil and a couple of pounds of concentrate.

The narcotics task force seized $1.4 million in cash, product, and money from various bank accounts belonging to owner James Slatic ($325,570 in cash was found in the safe). Med-West had been providing hundreds of licensed dispensaries around California with medical CO2-extracted cannabis oil and products under the state’s medical marijuana laws since 2010. The company was licensed by the city of San Diego and operating openly. Slatic says his company was raided a second time in late June and is now officially closed.

San Diego law enforcement used federal asset forfeiture laws to freeze and seize the company’s cash and the money in Slatic’s personal bank account, the bank account of his wife (who is a federal employee at Veterans Affairs), and his kids’ college savings accounts. The San Diego Sheriff’s Office and San Diego County District Attorney’s Office declined to explain why they seized Med-West’s and the Slatic family’s money, but neither has charged Slatic with a crime.

Med-West is not the only legal medical marijuana concentrate company in California that has been raided recently by the authorities. Law enforcement agencies have raided at least five other cannabis extraction companies since January. Jessica McElfresh, one of Slatic’s attorneys, says state law enforcement started targeting concentrate businesses this year. Typically, McElfresh says, the state had not used asset forfeiture laws against medical marijuana companies in the past, but has doubled down on the strategy with a focus on THC concentrate companies. McElfresh says the state is now using asset forfeiture to target legal marijuana businesses that cannot effectively fight federal asset forfeiture laws because marijuana is illegal federally

The state is also gearing up to vote on legalizing recreational marijuana in November. This has left many with the impression that the authorities are making hay while the sun shines. “They are just trying to get money from us while they still can. That’s why it’s called smash-and-grab,” says Slatic. “The prosecutors do not give us their prosecutorial strategy, but many people think drug task forces have become addicted to the assets. Law enforcement knows we have trouble getting banking, so during my raid they found $325,570 in cash in the safe, and the cops were high-fiving each other.”

Asset forfeiture laws allow police to seize assets they believe are the proceeds of a criminal enterprise without arresting someone and proving his or her guilt. Unlike criminal charges against a person, defendants of federal asset forfeiture laws have little recourse to get their money back. Across the U.S., law enforcement agencies have seized $1 billion through asset forfeiture in marijuana cases from 2002 through 2012, according to data from the Justice Department. (During the same period, authorities have seized a total of $6.5 billion in all drug-related cases.) The seized assets, The Wall Street Journal reports, have helped fund portions of drug task forces around the nation. But as laws reform, that pivotal revenue stream is drying up in states like California, Colorado, Oregon, and Washington.

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