One collective owner tipped off the Oakland-based East Bay Express to the intimidating letters, according to an article last month.

“Haag threatened the landlord with property forfeiture, 40 years in prison, and asset seizure, among other penalties,” the article states.

San Jose, for one, finds itself in a sticky position when it comes to endorsing Haag’s efforts, as the city now collects more than $3 million a year in tax revenue while consistently experiencing budget shortfalls. Liccardo’s office says a public meeting is scheduled for May 21, when the city will discuss raising the cannabis sales tax to 10 percent. On June 4, the City Council could consider passing the new rate.

Dave Hodges, founder of the San Jose Cannabis Buyers Collective, says the local marijuana business tax is pointless until the city recognizes its dispensaries as legally legitimately zoned businesses. He’s not opposed to paying taxes, he says, but he will sue the city over the legality of the current tax until the city comes up with a legit zoning category for local pot clubs.

“We are opposed to paying a tax when doing so is ‘illegal under San Jose law,’” he wrote to the city on Monday. “If the city implemented a registration or permit process legally allowing cannabis clubs, we would be more than willing to pay the current tax and drop our lawsuit.”

SAN JOSE (KCBS) – Several San Jose landlords who own properties where medical marijuana dispensaries are located are being threatened with property forfeiture.

The letters from U.S. Attorney Melinda Haag warn that the targeted properties are all less than 1,000 feet from a school or a park, said David Hodges, owner of All American Cannabis Club.

“So far I’ve confirmed seven letters that have gone out in San Jose. They’re all very similar,” he said, employing a strategy that has usually persuaded landlords to evict pot clubs.

Radio Interview :Feds Threaten To Forfeit Properties of Pot Clubs Near San Jose Schools, Mike Colgan

“The easiest thing for the feds to do is send out these letters to the landlord and threaten the landlord with prison time. Ninety-nine percent of the time, the landlord evicts the collective,” Hodges said.

The latest round of enforcement letters was not confined to the South Bay.

“We’ve had one report in San Francisco so far. Also another report in San Bernadino, so it seems like another statewide push,” he said.

Calls to the U.S. Attorney’s Office were not returned.

“The big reason that we’re on the same page is that we have a common enemy,” says Dave Hodges, who operates the All-American Cannabis Club in San Jose. “The thing that’s trying to stop [cannabis-industry] jobs and the thing that’s trying to stop [marijuana businesses] are one and the same — the push of anti-marijuana propaganda. I don’t know whether there’s another situation too similar to this, but any time people in a fragile industry needed help organizing and speaking up for themselves, that’s what unions are for.”

The biggest shock wave in the Bay Area may be felt in San Jose, where voters overturned strict dispensary regulations that constituted a de facto ban. Today, more than one hundred San Jose clubs operate and pay taxes in a sort of legal limbo. In the past, San Jose's City Attorney's Office has argued that all sales at dispensaries are illegal, Elford said. And the office still wants to ban clubs once and for all, said San Jose dispensary operator Dave Hodges. "I've been telling people, 'it's apocalyptic,'" Hodges said. "In less than ninety days, cities may have the ability to outright ban all storefront dispensaries.

"It would undoubtedly give the cities the upper hand in the war against cannabis clubs," Hodges continued. "If this had been the law when I started four years ago, San Jose would have zero cannabis clubs today."

"Pursuant to Measure U, the City of San Jose is unlawfully attempting to engage in the business of raising revenues through the sale of marijuana, via its Marijuana Business Tax."

"Finally, the Marijuana Business Tax does not apply to any activities connected to collective cultivation projects authorized under the MMPA, because the collective cultivation of marijuana pursuant to Health and Safety Code# § 11362.775 does not include any “sale, exchange, or barter.” And thus any such activities do not fall within the definition of “Sale” provided by SJMC § 4.66.140. The activities of A2C2 do not fall under the cities definition of "Sales" or "Gross receipts" as there is no "sale, exchange or barter that takes place at A2C2 nor is any charge made nor any credit allowed in connection with the in-kind contributions, monetary contributions and property contributions provided by members towards the collective’s overhead expenses. A2C2 members acknowledge the collective is providing them medical cannabis which requires regular maintenance and upkeep of which they acknowledge they must reimburse the collective at the amount deemed necessary by the collective. Members acknowledge their ownership in the cannabis at the time of joining the collective and authorize A2C2 to maintain possession of their medical cannabis until they reimburse A2C2 for the amount deemed necessary for its overhead costs."

City of Riverside v. Inland Empire Patients Health and Wellness Center
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Source: JDavidNick.com

J David Nick is the primary attorney for the Inland Empire Patients Health and Wellness Center. On February 5th 2013, the California Supreme Court will hold a special session at the San Francisco School of Law. The first case on the docket will be oral arguments in the City of Riverside v. Inland Empire Patients Health and Wellness Center.

This is one of the most important cases to date for the California medical cannabis movement. Mr Nick has stated, "the court's decision is going to determine the future of medical marijuana outlets throughout California. State law cannot be contradicted by local municipalities."

Anti-cannabis forces insist the federal law supersedes anything decided by an individual state, and they claim cities have the right to ban medical marijuana outlets.

In 2011, Appellate court Judge Carol Codrington upheld Riverside's ban on medical marijuana outlets writing, "The [Compassionate Use Act] and [California's Medical Cannabis Program] do not provide individuals with inalienable rights to establish, operate or use [Medical Cannabis outlets]. The state statutes do not preclude local governments from regulating [Medical Cannabis outlets] through zoning ordinances."

Inland Empire immediately appealed. In January of 2012, the Supreme Court announced it would take the case.

The bans that over 170 California localities have imposed on cannabis outlets will likely vanish If the Supreme Court overturns the lower court's decision.

Riverside City Attorney Greg Priamos said in a statement, "We anticipate that the decision will resolve the inconsistent appellate court decisions as to a local entity's land use power to ban dispensaries under its zoning code".

With oral arguments in the Riverside case beginning on February 5th, a decision could be reached as early as this spring.
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