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10B Action 2012 0702
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10B Action 2012 0702
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6/26/2012 6:21:14 PM
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CM City Clerk-City Council
CM City Clerk-City Council - Document Type
Staff Report
Document Date (6)
7/2/2012
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_CC Agenda 2012 0702 RG
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dispense, and do not sell marijuana, a patron will not receive any marijuana until an amount of <br />money acceptable to the dispensary has changed hands. <br />D. ORGANIZED CRIME, MONEY LAUNDERING, AND FIREARMS VIOLATIONS <br />Increasingly, reports have been surfacing about organized crime involvement in the ownership and <br />operation of marijuana dispensaries, including Asian and other criminal street gangs and at least one <br />member of the Armenian Mafia. 16 The dispensaries or "pot clubs" are often used as a front by <br />organized crime gangs to traffic in drugs and launder money. One such gang whose territory <br />included San Francisco and Oakland, California reportedly ran a multi - million dollar business <br />operating ten warehouses in which vast amounts of marijuana plants were grown. Besides seizing <br />over 9,000 marijuana plants during surprise raids on this criminal enterprise's storage facilities, <br />federal officers also confiscated three firearms, which seem to go hand in hand with medical <br />marijuana cultivation and dispensaries . 59 <br />Marijuana storefront businesses have allowed criminals to flourish in California. In the summer of <br />2007, the City of San Diego cooperated with federal authorities and served search warrants on <br />several marijuana dispensary locations. In addition to marijuana, many weapons were recovered, <br />including a stolen handgun and an M -16 assault rifle. 60 The National Drug Intelligence Center <br />reports that marijuana growers are employing armed guards, using explosive booby traps, and <br />murdering people to shield their crops. Street gangs of all national origins are involved in <br />transporting and distributing marijuana to meet the ever increasing demand for the drug. Active <br />Asian gangs have included members of Vietnamese organized crime syndicates who have migrated <br />from Canada to buy homes throughout the United States to use as grow houses. <br />Some or all of the processed harvest of marijuana plants nurtured in these homes then wind up at <br />storefront marijuana dispensaries owned and operated by these gangs. Storefront marijuana <br />businesses are very dangerous enterprises that thrive on ancillary grow operations. <br />Besides fueling marijuana dispensaries, some monetary proceeds from the sale of harvested <br />marijuana derived from plants grown inside houses are being used by organized crime syndicates to <br />fund other legitimate businesses for profit and the laundering of money, and to conduct illegal <br />business operations like prostitution, extortion, and drug trafficking. Money from residential grow <br />operations is also sometimes traded by criminal gang members for firearms, and used to buy drugs, <br />personal vehicles, and additional houses for more grow operations, and along with the illegal <br />income derived from large -scale organized crime - related marijuana production operations comes <br />widespread income tax evasion. <br />E. POISONINGS <br />Another social problem somewhat unique to marijuana dispensaries is poisonings, both intentional and <br />unintentional. On August 16, 2006, the Los Angeles Police Department received two such reports. <br />One involved a security guard who ate a piece of cake extended to him from an operator of a <br />marijuana clinic as a "gift," and soon afterward felt dizzy and disoriented . 66 The second incident <br />concerned a UPS driver who experienced similar symptoms after accepting and eating a cookie given <br />to him by an operator of a different marijuana clinic. <br />© 2009 California Police Chiefs Assn. 10 All Rights Reserved <br />
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