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Property Seizure New Tool in Medical Marijuana Enforcement

BB&K In The News

BB&K Attorney Jeffrey Dunn Says Going After Landlords Has Been a Successful Strategy

OCTOBER 27, 2011
The Daily Journal

By threatening to seize assets of landlords who rent to medical marijuana growers and dispensaries, U.S. attorneys in California have hit upon a promising way to combat the state's widespread cannabis industry and recoup some much needed cash for cities.

Some municipalities credit the tactic with succeeding where other efforts, including criminal prosecution, have failed to get rid of prohibited facilities. The seizures, they said, have in certain cities eliminated dispensaries altogether, and in some cases, the efforts may even recover enforcement costs.

Attorneys representing landlords complain the effort ignores state laws allowing the medical use of cannabis.

Earlier this month, U.S. Attorney for the Central District Andre Birotte Jr. announced the seizure of more than $135,000 from Lake Forest strip mall owner Youssef Ibrahim, whom city attorneys said rented more than a third of the center to a row of eight dispensaries. Birotte also filed a suit to seize the mall.

Unlike state law, federal Controlled Substances Act prohibits the growth, distribution and possession of marijuana for any purpose. Under U.S. asset forfeiture laws, federal authorities can seize property used for those purposes.

Prior to the federal actions, Lake Forest officials had spent nearly $600,000 and two years in litigation trying to close the storefronts throughout the city, said Jeffrey V. Dunn, a partner at Best Best & Krieger LLP who advises the Orange County city and other local governments on marijuana regulations.

"If we focused the abatement efforts on the dispensary," he said, "we would close one, only to see another one open." At one point there were 12 dispensaries in the city of about 75,000 people, which prompted local officials to ask for help from federal prosecutors.

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