The Compassionate Use Act (Prop 215) as Amended by Senate Bill 420 are collectively the

California Medical Marijuana Laws. CUA offers the owner/lien holder some protection, but only

if the law is followed to the letter.  If there is any violation, then California has a right to seize

the property.

The Controlled Substance Act is the Federal Law regulating marijuana. Part 21 USC §88l(a)(7)

of the Act allows the federal government to seize any property where marijuana is found.

Federal law recognizes an “innocent owner defense”, which allows an owner or lien holder to

retrieve their investment if they can prove that they knew nothing about the marijuana.

California law and Federal law are in conflict. Federal law has a zero tolerance provision and

preempts California law. Even if the use complies to the letter with CUA, the property can still

be seized by the Federal government.

Federal enforcement is on the rise. In the last six months, the DEA sent out thousands of letters

to owner/lien holders regarding illegal use of marijuana. I have represented several owners

seeking advice on leasing to persons either using for personal use or wanting to operate medical

marijuana facilities. The risk is simply too high in the current environment.


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