In a ruling that might have broader implications in future prosecutions, a judge on Thursday threw out charges against two Vallejo dispensary operators charged with illegally selling marijuana.
The cases involved the embattled Better Health Group collective, which was raided by Vallejo police in February, March and June. The dispensary at 3611 Sonoma Blvd. was shut down after a third raid on June 22.
Defendants Jorge Espinoza, 25, and Jonathan Linares, 22, both of Vallejo, had been charged with marijuana possession and sale, and operating an illegal dispensary.
But retired Solano County Superior Court Judge William Harrison dismissed all charges after a preliminary hearing held Wednesday at the Vallejo courthouse.
Harrison said that while not everyone sees eye to eye on the law, dispensaries that comply with the Compassionate Use Act of 1996 and the Medical Marijuana Program Act are allowed to operate.
"Our Legislature has said you can have this kind of business if you do it right," Harrison said. "I don't think there is sufficient evidence that Jorge Espinoza has committed a crime."
Afterward, Solano County Deputy Public Defender Cheryl McLandrich, who represented Linares, said the court "did the right thing."
"We are pleased with the court's ruling," McLandrich said. "These gentlemen were paying taxes and attempting to comply with state law in running their cooperative. It would have been a waste of taxpayer time and resources for the court
to have bound them over for trial."
For Solano County prosecutors, it was the second defeat this year in cases targeting dispensaries. In April, a jury acquitted Vacaville resident Flash Gordon of North Bay Alternative Healing II, who had been charged with illegal weed sales.
It was unclear Thursday whether the Vallejo collective plans to reopen. Nor was it yet clear how the ruling might affect future prosecutions or possible future Vallejo police department raids.
An inquiry to Vallejo police about more raids was referred to an investigating detective, who did not respond Thursday. The prosecutor, meanwhile, said no decision has been made on numerous pending cases, or whether charges will be refiled in this one.
The case was the first in a series of Vallejo dispensary cases to reach a preliminary hearing following a police crackdown earlier this year.
The raids followed voter approval of a Vallejo ballot measure in November 2011 to tax medical marijuana businesses.
At the center of the case were legal and philosophical questions about what constitutes a legitimate medical marijuana cooperative under California law. A pile of conflicting court rulings has added to the confusion, but recent state appellate decisions favor a broader view of the law.
During the preliminary hearing, Solano County Deputy District Attorney Jack Harris argued the dispensary did not meet the definition of a cooperative. Harris said the enterprise was not accountable to its membership, and that only a small number of patients grew the marijuana that was sold.
However, defense attorney Scot Candell of San Rafael, who represented Espinoza, argued the group had followed all applicable state and local laws. Candell said the dispensary required members to fill out membership forms and tracked members' prescriptions to make sure they were up to date.
Candell also said the dispensary paid state and local taxes.
"This was a (registered) nonprofit organization with a board of directors," Candell said. "There is no evidence that anyone was doing anything wrong."
Candell also referenced two rulings by the 4th District Court of Appeal from earlier this year. The rulings, concerning dispensaries in San Diego and Los Angeles, said state law does not limit the number of members a dispensary can have, or require them all to be growers.
The rulings in the two cases, People v. Colvin and People v. Jackson, also found that storefront collectives can sell marijuana to members as long as money collected is for overhead costs and operating expenses.
Harris, however, argued the club was not a truly a "cooperative" because its roughly 15,000 members were given no say in how it operated. State laws, however, are vague on what exactly a medical marijuana collective should look like.
"I do not agree that signing a piece of paper makes you a member of a collective," Harris said.
Vallejo police Detective Jared Jaksch testified that three undercover officers posing as patients -- including a district attorney's investigator -- had bought marijuana at the business since April 2010.
While the first undercover officer used a "forged" prescription, Jaksch said the other two showed valid physicians' recommendations and filled out membership forms.
Jaksch said a Vallejo detective last bought marijuana at the dispensary on Feb. 16, and the undercover DA inspector made a May 15 purchase. Other than filling out membership forms, he said investigators were not informed of membership rights or responsibilities.
Jaksch also said police spoke to more than a dozen individuals seen leaving the dispensary. He said one customer told police she did not have a doctor's recommendation at the time. Another, Jaksch said, said she had bought marijuana at the dispensary without being a member.
However, Morgan Hannigan, a dispensary member, testified that many patients carried identification cards with medical information rather than paper copies of doctors' recommendations. Hannigan, who volunteered at the dispensary from April until June, also said the collective kept records of members' prescriptions on its computers.
"New patients were required to show a recommendation and a California ID," Hannigan said. Returning patients, he added, could swipe their driver license through an electronic identification system to verify if they had a current prescription.
Asked by Harris how the collective set marijuana prices, Hannigan said they were based on factors such as growers' costs, payroll, bills and other overhead expenses.
Prosecutors tried to paint a picture of the dispensary as a massive for-profit business, with Espinoza as CEO and Linares as manager. Along with pounds of marijuana, hash and edible products, police seized more than $20,000 cash from the dispensary during the raids.
"I think (Espinoza) is the owner of a business that he's attempted to disguise as a nonprofit organization," Jaksch testified.
Judge Harrison, however, said there was no evidence that the cooperative was making a profit.
"The argument from the people's standpoint ... was because of the amount of money found (during the police raids) it was for-profit," Harrison said. "But the evidence I have seen shows there wasn't a profit ... and I don't think forcing them to go through a trial is the right thing to do."
Afterward, Harris said the ruling could affect pending dispensary cases in Solano County.
"We'll have to re-weigh everything," Harris said. "These (appellate) cases have taken a much looser interpretation of what I think a collective ought to be."
Contact staff writer Tony Burchyns at email@example.com or (707) 553-6831. Follow him on Twitter @tburchyns. ___
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