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By Miriam Raftery

June 26, 2017 (La Mesa) – Jessica McElfresh is an attorney who co-authored Measure U, the ballot measure approved by La Mesa voters to allow medical marijuana dispensaries to operate legally in the city.  Now she’s facing felony charges of conspiring to use flammable, volatile and toxic chemicals to extract hash oil from marijuana and sell it out of state. She is also accused of misleading investigators, helping her client hide illegal operations, and destroying evidence.

The criminal complaint charges McElfresh, along with her client, James Slatic and four of his employees at Med-West Distribution in San Diego with manufacturing a controlled substance, conspiracy, and money laundering $3.2 million.  All have pled not guilty. Slatic has been a major player behind legalization of marijuana in California, so his arrest has sent shock waves through the cannabis community.

In an unusual move, a judge voided attorney-client privilege in some records in the case, after finding that an email suggested McElfresh knew about her client’s criminal actions and tried to hide them.  After an April 2015 visit to the dispensary, which also produced paper products, she wrote, “We did a really, really good job of giving them plausible deniability—and it was clear to them that it wasn’t a dispensary. But I think they suspect it was something else more than paper.”

Prosecutors also allege that McElfresh destroyed evidence, after an iPad was found submerged in water during a search warrant, circumstances that Deputy District Attorney Jorge Del Portillo called “quite suspicious” during the arraignment, the San Diego Union-Tribune reported on June 16th..  The defense has claimed the iPad belonged to McElfresh’s mother, who planned to discard it and destroyed it to protect her personal data.

But an article in Leafly contends that the business may have been targeted unfairly.  District Attorney Bonnie Dumanis’ office seized assets during a January 2016 raid at Med-West, including $324,000 in cash from a safe and $100,000 from personal bank accounts belonging to Slatic, his wife and stepdaughters—even though Judge Tamila Ipema with San Diego Superior County Court stated “There is no indication…that criminal charges are going to be filed in this case in the near future.”

Sixteen months after the raid, no charges had been filed.  A judge ordered the DA’s office to return the $100,000 from the family’s personal bank accounts.

Two weeks later, the felony charges were filed – charges that could land the defendants in prison for up to 15 years, if they are convicted.

Slatic calls the charges “vindictive prosecution.”  McElfresh, his attorney, vowed to fight the charges.

Med-West, meanwhile, has been forced to shut down and sell part of its building while the battle continues over whether or not seizure of the $324,000 from the business safe was legal.

Disturbing to the burgeoning dispensary business in California, where voters statewide have legalized both medical and recreational marijuana, is that Slatic has been a leader in the legal cannabis industry.  A founding member of the National Cannabis Industry Association, he coauthored California’s state cannabis law.  Moreover, he claims to have operated his business “100% legit” including paying taxes and providing employees with good wages and benefits.

The raid took place before Prop 64, which legalized recreational pot in California.  The defendants contend that the prior statute governing chemical extraction was vague and that courts had specified only butane as a banned compound.

Nicholas Moore, a cannabis lawyer in San Diego, told Leafly that in California, “even if you’re following all appropriate laws and rules and you’re properly permitted, there’s still a risk this can happen to you.”

All of this comes against a backdrop of the federal government weighing a crackdown on marijuana even in states that have legalized it.  

In May,  Attorney General Jeff Sessions sent a letter to Congressional leaders asking Congress to not renew an amendment that bans the Justice Department from prosecuting medical marijuana cases in states that have legalized use of medical marijuana, Newsweek reports.  He has also asked federal prosecutors to seek maximum sentences for drug offenders, even low level ones.

It is not yet known if Congress will grant Sessions permission to prosecute medical marijuana users, growers or sellers in states that legalized these practices or not.

But it’s clear that despite steps by California and cities such as La Mesa to legalize and regulate various aspects of the marijuana industry, operating a cannabis enterprise is still a risky business.

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