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Prosecutors: Marijuana dispensaries make too much money

A bud tender at a non-profit co-operative medical marijuana dispensary displays various types of marijuana available to patients in Los Angeles, Calif.

Steve Chiotakis: Are California's medical marijuana dispensaries making a little too much money? The federal government sent letters to landlords who
rent space to those shops. And their message: kick out of the pot sellers or risk losing your property and going to jail. It's a conundrum for one area, a city that's embraced its local dispensary as a vital member of its business community.

Marketplace's Jeff Tyler reports.


Jeff Tyler: Federal prosecutors say there's way too much profit in California's not-for-profit pot dispensaries.

Here's US Attorney Melinda Haag.

Melinda Haag: The California Compassionate Use Act was intended to help seriously ill people. But the law has been hijacked by profiteers who are motivated not by compassion, but by money.

Her office sent letters to some landlords demanding they evict medical marijuana clubs. One of the shops targeted is the Marin Alliance for Medical Marijuana in the town of Fairfax.

Dispensary: Okay, your total is 25 dollars, even.

Owner Lynnette Shaw says half her clients are women.

Lynnette Shaw: Unfortunately, we have the highest rate of breast cancer in the nation.

Over the past thirteen years, Shaw says she's spent about half a million dollars in legal fees defending her shop and her clients. And she says it's pretty hard to lie about her revenue.

Shaw: We got audited financially twice a year for the first five years by the town. Ha-ha. What to you want? I haven't made any money and I can prove it.

Fairfax mayor Larry Bragman says the business is highly regulated by the town. A member of the chamber of commerce, Shaw's dispensary is in the city's top ten in terms of tax revenues.

Bragman says the pot shop has actually been GOOD for local businesses.

Larry Bragman: It's bringing folks into Fairfax from all over Marin County. So, a lot of time, you know, they'll stop and buy gas. You know, they may get a cup of coffee, a bite to eat.

If the feds are successful in shutting down the pot shop, Bragman says the town will have to spend more on law enforcement as the business moves back into the criminal underground.

I'm Jeff Tyler for Marketplace.

About the author

Jeff Tyler is a reporter for Marketplace’s Los Angeles bureau, where he reports on issues related to immigration and Latin America.

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