Noozhawk:  “In their stepped-up battle against local marijuana dispensaries and growing operations that supply them, federal authorities are employing a powerful weapon: asset-forfeiture laws.  The U.S. Attorney’s Office this week filed legal complaints for forfeiture against the property owners of two South Coast medical marijuana storefront dispensaries and one indoor farm. They allege that the owners should have known what the buildings were used for — growing and/or selling marijuana, which the government considers illegal under both federal and California law, even if the marijuana is considered medicinal.”

The letter from the U.S. attorney to property owners said:

“Accordingly, it is not a defense to either the referenced crime or to the forfeiture of property that the dispensary is providing ‘medical marijuana.’  Even under these circumstances, an owner of real property with knowledge or reason to know of illegal marijuana distribution occurring on real property that he owns or controls may have his interest in the property forfeited to the government without compensation.”

Arizona property owners who are considering leasing to a medical marijuana dispensary take note.  The federal government has not only clearly stated its intention to confiscate real property used to grow, store or sell medical marijuana, it is now actively pursing forfeiture against property owners.

Noozhawk:  “Multi-agency operation targets illegal storefront dispensaries and grow sites, with three asset-forfeiture lawsuits filed in U.S. District Court.  Federal authorities and Santa Barbara police served search warrants at a medical marijuana dispensary and a grow house this week, and sent warning letters to all pot storefronts in the county that are still in business, threatening federal enforcement action if they don’t close down, according to the Santa Barbara Police Department. . . . As part of the enforcement effort, three asset-forfeiture lawsuits were filed this week in U.S. District Court in Los Angeles alleging that the owners ‘either knowingly allowed commercial marijuana stores to operate or knowingly allowed a significant indoor marijuana farm to function,’ according to the statement from the U.S. Attorney’s Office.  According to the U.S. Attorney’s Office, the asset-forfeiture lawsuits were filed against the Miramar Collective in Summerland, Pacific Coast Collective and the indoor marijuana farm connected to Kessler.”

Note to Property Owners Considering Leasing to Arizona Medical Marijuana Dispensaries

The story above is a clear warning to landlords and property owners who allow or who are considering allowing medical marijuana dispensaries to operate on their real property.  The federal government may seize the real estate and sue in federal court to take the land and its value from the owner.

The legal significance of the federal government now going after property owners extends beyond the loss of the property to the owners.  This new government action should also have the very much intended consequence of shutting down medical marijuana dispensaries in every state that has legalized them.

The following is the text of a May 3, 2012, press release by the U.S. Attorney for the Central District of California:

In the latest series of actions against the commercial marijuana industry in California, federal authorities this week filed three asset forfeiture lawsuits against properties housing marijuana operations in Santa Barbara County, executed search warrants at four locations, and have sent warning letters to people associated with 10 other illegal marijuana stores in the county.

Three civil asset forfeiture complaints were filed yesterday afternoon in United States District Court in Los Angeles against properties in Santa Barbara and Summerland where marijuana is being grown or marijuana stores are currently operating. Prosecutors yesterday also sent letters to marijuana store operators and the owners of buildings where 10 marijuana stores currently operate in Goleta, Summerland and Santa Barbara.

The three forfeiture lawsuits filed this week allege that the owners either knowingly allowed commercial marijuana stores to operate or knowingly allowed a significant indoor marijuana farm to function. The buildings named in the forfeiture lawsuits house:

Miramar Collective on Ortega Hill Road in Summerland, which local authorities estimate was generating annual profits of approximately $840,000 in 2009, and whose owner is currently being prosecuted by the Santa Barbara County District Attorney’s Office on state narcotics charges;

Pacific Coast Collective on North Milpas in Santa Barbara, whose operator is currently being prosecuted in state court and, even though called “not for profit,” the business is incorporated and does not have non-profit status for tax purposes (a federal search warrant was executed yesterday at this location and at the residence of its suspected operator); and

an indoor marijuana farm on East Haley in Santa Barbara, where substandard and unpermitted electrical equipment has been used (federal and local authorities executed a federal search warrant today at this property and at the residence of its operator).

In conjunction with the filing of the asset forfeiture complaints, letters were mailed out yesterday to the property owners and operators of 10 additional marijuana stores that are either currently operating or were recently closed – six in Santa Barbara, three in Goleta and one in Summerland.

All known marijuana stores in Santa Barbara County are now the subject of federal enforcement actions.

This week’s enforcement actions in Santa Barbara County follow similar actions in recent months across the seven-county Central District of California. Starting in October 2011, prosecutors began filing asset forfeiture lawsuits and sending letters to marijuana operations in selected areas in Orange County, Riverside County, San Bernardino County and eastern Los Angeles County (see, for example: http://www.justice.gov/usao/cac/Pressroom/2012/014.html). Seven asset forfeiture complaints – four of which are still pending in United States District Court in Los Angeles – were filed as part of those actions that targeted more than 150 marijuana stores and grows. The majority of those stores are now closed, are the subject of eviction proceedings by landlords, or have been the subject of additional federal enforcement actions.

In October 2011, the four United States Attorneys in California announced coordinated enforcement actions targeting illegal marijuana cultivation and trafficking (see: http://www.justice.gov/usao/cac/Pressroom/2011/144a.html).

The United States Attorney’s Office is working in conjunction with the Drug Enforcement Administration and IRS – Criminal Investigation. The Santa Barbara Police Department assisted federal authorities this week during the execution of federal search warrants.

Release No. 12-056

Emphasis added.