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Feds Drop Asset Forfeiture Cases

In a sign of at least temporary relief for property owners who rent to pot dispensaries, federal prosecutors in California have dropped several lawsuits that sought to seize landlords’ property because they did business with pot providers.

“This is an important step in the civil rights battle being fought by seriously ill Californians who have been recommended medical marijuana by their doctors,” said Matthew Pappas, attorney for the property owners. “For patients who use marijuana pursuant to state law to alleviate symptoms resulting from cancer, AIDS, and other disabilities, this helps stop actions that have inappropriately thwarted access to medication. It is a very positive step by the Justice Department and the local U.S. Attorney.”
Four cases were dropped in Anaheim, Santa Ana and Los Angeles this month. They were all dismissed with prejudice, meaning they can’t be filed again.

Marijuana GavelThe most high-profile case involved Tony Jalali, a software engineer who rented space in his $1.5 million office building to a medical marijuana dispensary. After an undercover narc arranged a $37 pot buy at the shop last year, the DEA swooped in and prosecutors filed the suit trying to take away Jalali’s building.

The case began to fall apart quickly, however, with a judge saying in December that federal marijuana policy was so inconsistent and ever-changing the Obama administration might reverse course again and back off enforcements before the case went to trial – exactly what the administration proceeded to do.

Prosecutors insisted at that hearing they “absolutely” intended to follow through on prosecution, but apparently they couldn’t live up to that certainty. They have wanted to drop the suit for months, but insisted Jalali agree to surprise inspections and never do business with dispensaries again, legal or otherwise.

Jalali refused. Eventually prosecutors dropped the clause and he walked away free – with the exception of his attorney’s fees. The sole condition of dismissal by the government was that he not seek reimbursement for those costs.

Jalali long said he believed renting to the dispensary was perfectly legal. Not only was he protected by California’s medical marijuana law, passed by voters in 1996, but he read recent developments to indicate the federal government was no longer interested in prosecuting dispensaries. So did most other industry watchers.

Indeed, in 2009, shortly after President Obama took office, the Justice Department issued a memo declaring it would treat medical pot as a low law-enforcement priority. Jalali took this and other statements as a sign he could safely rent to a dispensary.

But the administration later revoked that memo and, even while it was in force, the feds repeatedly cracked down on medical marijuana across the country – but especially in California. Jalali got caught up in a two-faced drug policy he couldn’t possibly be expected to navigate.

“I was shocked when the government first sued me, and I realized that civil forfeiture meant the government could take my property away even though I was not charged with any crime,” Jalali said in a press release. “I did not want to be bullied and stood up to the government to protect my property and my reputation.”

About Matt Brooks

Based in San Francisco, Matt is a journalist who has specialized in marijuana policy for more than five years. He provides regular news coverage on and

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