Matthew R. Davies graduated from college with a master’s degree in business and a taste for enterprise, working in real estate, restaurants and mobile home parks before seizing on what he saw as uncharted territory with a vast potential for profits — medical marijuana. He brought graduate-level business skills to a world decidedly operating in the shadows. He hired accountants, compliance lawyers, managers, a staff of 75 and a payroll firm. He paid California sales tax and filed for state and local business permits.
But in a case that highlights the growing clash between the federal government and those states that have legalized marijuana for medical or recreational use, the United States Justice Department indicted Mr. Davies six months ago on charges of cultivating marijuana, after raiding two dispensaries and a warehouse filled with nearly 2,000 marijuana plants.
The United States attorney for the Eastern District of California, Benjamin B. Wagner, a 2009 Obama appointee, wants Mr. Davies to agree to a plea that includes a mandatory minimum of five years in prison, calling the case a straightforward prosecution of “one of the most significant commercial marijuana traffickers to be prosecuted in this district.”
At the center of this federal-state collision is a round-faced 34-year-old father of two young girls. Displaying a sheaf of legal documents, Mr. Davies, who has no criminal record, insisted in an interview that he had meticulously followed California law in setting up a business in 2009 that generated $8 million in annual revenues. By all appearances, Mr. Davies’ dispensaries operated as openly as the local Krispy Kreme, albeit on decidedly more tremulous legal ground.
His lawyers appealed this month to Attorney General Eric H. Holder Jr. to halt what they suggested was a prosecution at odds with Justice Department policies to avoid prosecutions of medical marijuana users and with President Obama’s statement that the government has “bigger fish to fry” than recreational marijuana users.
“Does this mean that the federal government will be prosecuting individuals throughout California, Washington, Colorado and elsewhere who comply with state law permitting marijuana use, or is the Davies case merely a rogue prosecutor out of step with administration and department policy?” asked Elliot R. Peters, one of his lawyers.
“This is not a case of an illicit drug ring under the guise of medical marijuana,” Mr. Peters wrote. “Here, marijuana was provided to qualified adult patients with a medical recommendation from a licensed physician. Records were kept, proceeds were tracked, payroll and sales taxes were duly paid.”
For the complete article, please click here.
For three decades Elliot Peters has litigated, tried and advised clients in some of the nation's most high-profile, high-stakes complex commercial and white collar criminal cases. Mr. Peters has tried more than 50 cases on behalf of CEOs, leading law firms, and major corporations. He is a Fellow of the American College of Trial Lawyers. He has also been named Attorney of the Year by California Lawyer and The Recorder, the Litigator of the Week by The American Lawyer, and one of the Top 100 Attorneys in California by the Daily Journal.
Steven Ragland has extensive experience in a broad range of criminal defense and complex civil litigation matters. Mr. Ragland has represented individuals and companies facing criminal allegations ranging from securities, mail, and wire fraud to drug and terrorism offenses. In the civil realm, he has successfully represented clients in breach of fiduciary duty, fraud, legal malpractice, defamation, trade secret misappropriation, contract interference, unfair business practice, and civil rights matters.