Before January 28th, 2016, James Slatic was a respected, successful business owner who ran a state-legal medical cannabis company that refined cannabis extracts and supplied them to 9 dispensaries in the San Diego, CA area.
But on that morning, James’ life and that of his family changed forever. That’s the day that more than 2 dozen heavily-armed agents from the San Diego Police Department and the federal Drug Enforcement Administration burst into Med-West Distributors – using a sledgehammer to bust down the door – arresting two employees (who were later released without charges), confiscating Med-West’s state-legal inventory and some $325,000 in cash.
From Rolling Stone:
The next day, law enforcement froze the personal bank accounts of Slatic, his wife (a federal government employee) and their two teenage daughters under the legal theory that all the family’s money was tainted by their father’s supposedly illegal business.
“My one daughter is a senior in high school and works at Starbucks, and the other is a freshman at San Jose State, which isn’t even near the business, and when she was here, she worked at a toy store,” Slatic says. “They even took her [money] from that.”
“An employee called me,” James told The Marijuana Times about how he found out the raid was happening. “I was at a breakfast meeting. I usually would have been there at 7:30. 7:37 is when the raid happened.”
For hours on the 28th agents ripped through his business while a police helicopter circled overhead. “We were there for years,” James told us. “We weren’t going any place. I’ve had other police officers ring the doorbell and walk in the front lobby to talk to us, serve papers, do whatever they wanted to do, but that day they needed this overwhelming militarization response and flying a helicopter over the building for seven hours at $5,000 an hour.”
The Institute for Justice
Things looked bleak indeed for James and his family. Business destroyed, years of hard work down the drain, bank accounts empty, cash confiscated and the specter of “what will the authorities do next” hanging over their heads.
Enter the Institute for Justice, a self-described libertarian law firm that “litigates to limit the size and scope of government power and to ensure that all Americans have the right to control their own destinies as free and responsible members of society.” IJ heard about the case through one of James’ fellow Marijuana Policy Project board members and eventually decided to take it on. Now, instead of facing James and his family alone – the people they had just bankrupted – the San Diego District Attorney’s office was dealing with an established law firm with the resources to see this case through until the day justice is served, however long that might take.
“So, their strategy has always been just get you to spend, spend, spend money that you don’t have to try to break the law,” James told us in reference to the strategy authorities like to use in civil asset forfeiture cases, “so I don’t think they really know what to do with this IJ thing because while they have the unlimited power of the public purse, we have a 25-year-old, $50 million dollar a year non-profit that is extremely, I would say, perplexed and angry at the strategies and legal maneuvering [of authorities in these cases].”
In the Press
Besides the Institute for Justice, James’ family has another ally on their side: press coverage. Since James and his family have yet to be charged with any crimes – which would trigger all sorts of legal necessities, like due process, evidence discovery and the like – it’s clear that the San Diego D.A. would like this case to be swept under the rug. But that is hard to do when outlets like the above-linked Rolling Stone and the local San Diego Union-Tribune keep the public spotlight on the proceedings.
With all the advantages that the authorities have in this case, the press is one of the few places they can be made to feel any pressure at all.
What if the San Diego D.A. is Right?
I know what some of you are saying: what if the authorities are right and James and his family just use medical marijuana legality as a front to just be drug dealers? Ok, for a moment let’s ignore the fact that James ran his licensed, legally-zoned business for years in the open, was a respected member of the community, was totally compliant with all local and state laws, paid taxes and was sought after by many for his advice and thoughts on the legal marijuana industry, including the new chief of California’s Bureau of Medical Cannabis Regulation, Lori Ajax. Let’s assume he did all that to distract from his nefarious dealings behind the scenes.
Why is he not in jail? Why haven’t he and his family been charged with any crimes? If he is a dangerous drug dealer, why is he allowed to walk to streets, menacing society with his dastardly ways?
For their part, the Sad Diego D.A. has changed its theory about what James and his family were up to. From a press release from the Institute for Justice:
“Yesterday evening, after missing a key deadline to file a civil forfeiture case against the Slatic family, the San Diego County District Attorney’s Office announced a brand new theory for why it seized the family’s life savings more than a year ago. In a court filing, the DA for the first time alleged that money belonging to James Slatic, his wife, Annette, and their two daughters, Lily and Penny, is evidence of money laundering – a crime for which no one has been charged.
The filing comes one day after the DA announced in a separate filing with the court that it would drop a controversial civil forfeiture case against the family’s money. Both announcements come as the DA is facing twin dismissal motions filed by the Institute for Justice (IJ) on behalf of the Slatics – one seeking to dismiss any civil forfeiture action and the other seeking the immediate return of the family’s money.
“This money remains in the District Attorney’s bank account in open violation of California law,” said Wesley Hottot, an attorney with the Institute for Justice, which represents the Slatics. “Faced with having to answer for this unlawful seizure in court, the DA has invented an entirely new theory for why it seized the money in the first place. The story keeps changing to avoid admitting the obvious: that this is an abuse of power to take more than $100,000 from the family of an innocent small business owner.”
So instead of bringing charges, the D.A. decides to float a new theory of money-laundering and says it will eventually drop the civil asset forfeiture case?
New Regulations, with More on the Way
Interesting enough, last September California Governor Jerry Brown signed into law a bill that would protect those not convicted of a crime from having their assets seized in most cases. This came about 8 months after the raid on James Slatic’s business.
With more cannabis regulations on the way, thanks to the passage of Proposition 64 by California voters last fall, some feel authorities are using a closing civil asset forfeiture opportunity window as an excuse to grab as much cash as they can.
“We’re in this really unique period of time right now of flux where regulations are imminent – not just iffy but imminent” said Dale Sky Jones, the executive chancellor of Oaksterdam University. “That means a line just got drawn for law enforcement.”
It’s worth noting that civil asset forfeiture laws are also being discussed on the national level as well.
Is it That Simple?
Could that be all this is? Just law enforcement in a blatant cash grab before their cash-grabbing days are over?
“They want to go to ground with it because it is a lot of money,” James told us. “The family money is only $100,000, but $325,000 from the business and a million dollars-worth of other cannabis-related assets and so forth. So they like money and policing for profit has been the cause celebre and now – and that’s all there is to their system, is just to delay, delay, file motion, getting continuances all while running a clock on the core people that are paying for an attorney to try to get their unjustly detained money back.”
Of course one can’t say for sure, but even those who would side with authorities on this issue have to admit that the fact that only the property was taken and no charges were filed points to a “policing for profit” scenario.
As someone who has covered the cannabis community and industry for 7 years, I have reported on many civil asset forfeiture cases. Those cases are always extreme and ridiculous; after all, police are robbing people of their money and property without due process. But this case seems even more extreme than usual when you take into account the fact that James’ family was targeted and that the D.A. continues to battle despite facing well-funded opposition and public pressure.
And it could be a harbinger of more disturbing things to come. With marijuana laws being relaxed around the country, civil asset forfeiture may end up being one of the few tools left to law enforcement in their “War on Drugs”. As they become more desperate to retain some semblance of control, the authorities – especially federal ones – may see asset forfeiture as a great way to injure the legal marijuana industry while making a ton of cash.
Some say the industry is too big for the federal government to reign in at this point. After all, they can’t shut down every business and arrest every employee, right?
But what if they don’t bother shutting down any businesses or arresting anyone? What if federal agents just start robbing state-legal marijuana businesses with the help of local law enforcement who they promise a cut to? States can reform these laws, but unless there is federal reform, this scenario could easily come to be. What kind of effect would that have on the legal cannabis industry as a whole?
If that is the case, then no one is safe. You can follow every rule, cross every t and dot every i, just like James Slatic did. But the government can still decimate your business and rob your family, leaving you with little to no means to achieve justice.
If you work in the legal marijuana industry, you have to ask yourself: will you be next?