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Why Did San Diego Declare War on Med-West?

June 7, 2017
James Slatic founded Med-West, the largest distributor of cannabis-infused products in California until it was raided by San Diego law enforcement last year. Slatic and associates now face multiple felony charges and up to 15 years in prison, but critics believe the business may have been unfairly targeted. (Courtesy of Med-West)
On a Thursday morning in late January 2016, two dozen law enforcement officers sledgehammered open the doors to Med-West and stormed into James Slatic’s cannabis distribution warehouse in Kearney Mesa, a light industrial neighborhood in San Diego. Security camera footage shows officers, clad in body armor and carrying assault rifles, handcuffing and putting guns to the heads of the manager and lab technician, the only two employees present at 7:37 a.m.

The district attorney’s office then began a systematic confiscation of Med-West’s assets. The haul included 30,000 cannabis oil cartridges, 800 infused chocolate bars, computers, business and financial records, and $324,000 in cash taken from a safe. Authorities also seized $100,000 from personal bank accounts belonging to Slatic, his wife, and his two stepdaughters.

“There is no indication … that criminal charges are going to be filed in this case in the near future.”
Judge Tamila E. Ipema, San Diego County Superior Court

Slatic himself was at a breakfast meeting when the raid took place. “I went home and waited for them to arrest me,” he recalled in a recent interview with Leafly.

Remarkably, that didn’t happen. Sixteen months passed, and not a single charge had been filed.

Meanwhile, Slatic and his lawyers worked to recover at least some of the seized property. On May 8, a San Diego judge ordered the DA’s office to return the $100,000 from the family’s personal bank accounts. “Investigations have been ongoing since January 2016 and there is no indication … that criminal charges are going to be filed in this case in the near future,” the judge wrote.

Then, barely two weeks after the ruling, charges came. Heavy charges. San Diego County District Attorney Bonnie Dumanis filed multiple felony counts against Slatic and his associates. According to a DA press release, the defendants now face more than 15 years behind bars.

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San Diego DA Files Felony Charges Over Cannabis Extraction

The criminal complaint accuses Slatic, four employees, and his attorney, Jessica McElfresh, of 12 felony counts, including manufacturing a controlled substance, conspiracy, and money laundering. The DA’s office alleges that Slatic and his team amassed illegal profits to the tune of $3.2 million in 2015 and that McElfresh helped Slatic hide from authorities the use of “flammable, volatile and toxic chemicals” to extract cannabis oil in violation of California law.

“Clearly, after 16 months, to charge us three days after we got our family money returned is vindictive prosecution,” Slatic told Leafly after the charges were filed.

Through her attorney, Eugene Iredale, McElfresh vowed to fight the charges. “It was no accident that the charges came right after the court ordered the return of funds that had been seized,” Iredale said.

Security camera footage of the 2016 raid of Med-West's facilities show law enforcement clad in body armor and carrying assault rifles. (Courtesy of Med-West)

Security camera footage of the 2016 raid of Med-West’s facilities show law enforcement clad in body armor and carrying assault rifles. (Courtesy of Med-West)

The Med-West raid, asset forfeiture, and delayed felony charges have left many in California’s multibillion-dollar cannabis industry scratching their heads. The day before the raid, Slatic, now 57, headed up a flourishing cannabis empire. The 35-employee company he founded was the largest distributor of cannabis-infused products in California. When it was shut down, Med-West supplied 1,100 dispensaries and had just enjoyed the best month in its seven-year existence, Slatic said. “Then it all came to a crashing halt.”

A respected member of the legal cannabis community, Slatic was among the founding members of the National Cannabis Industry Association. He was a member of the group’s California and Nevada chapters, a board member of the Marijuana Policy Project, and a co-author of state cannabis legislation with California Assemblyman Rob Bonta.

In an interview, Slatic remained staunch that he followed all laws and operated an exemplary business. “We did everything 100% legit,” he told Leafly last month. “We had the best lawyers, the best CPAs. We were a model for the good actors in the business.”

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Med-West paid its taxes and used a reputable payroll service, Slatic said. Its employees enjoyed good wages, 401(k) retirement accounts, and health insurance. City inspectors cleared the company to operate from a building adjacent to a Mercedes-Benz dealership.

According to Slatic, search warrants claimed that a confidential informant tipped off authorities to illegal cannabis extraction happening on the property. But both Slatic and McElfresh have maintained that no extraction took place on site. Slatic believes the raid was spurred on by other factors.

“It was a combination of my visibility and the fact they knew we were a good-sized company. They saw the number of cars in the parking lot. They knew the size of our operation,” he said. “The mayor’s office talked to us after the raid and said, ‘This didn’t come from us.’”

“There’s no question they were unfairly targeted.”
Wesley Hottot, attorney for Med-West founder James Slatic

A persistent sticking point in this case was the legality of chemical extraction in the pre-Proposition 64 days when Slatic was busted. In California, extraction falls under a 1985 statute meant to apply to illegal methamphetamine production. The statute, passed more than a decade before California’s legalization of medical cannabis in 1996, uses vague language to prohibit the manufacture of concentrated controlled substances—including meth and crack cocaine—without specifying which compounds are off-limits.

“A wide variety of extraction methods are legal in California, including CO2,” McElfresh told Leafly before the charges were filed. “The only method of extraction courts said was illegal was butane, but now that’s hypothetically legal under California law if someone has local permitting.”

San Diego cannabis attorney Michael Cindrich doesn’t fully agree. “It’s questionable whether a CO2 lab is legal under California law,” Cindrich said. “The law that currently exists for extraction only says extraction by chemical synthesis is not allowed. We can argue that CO2 is nonvolatile, but it doesn’t change the fact that it’s chemical extraction.”

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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,” added Nicholas Moore, a San Diego cannabis attorney.

Cindrich, who has an asset forfeiture practice, said no effort to comply could have prevented this. “There’s nothing you can show law enforcement that says, ‘I’m legal and have jumped through all the hoops to get authorization to do this.’”

Those who side with Slatic point to the raid as overreach by Dumanis and her office. Broadly, the action might be seen as emblematic of the nationwide misuse of asset forfeiture by law enforcement, maligned by critics as policing for profit. Dumanis, who has held the post since 2003 and mounted an unsuccessful mayoral bid in 2012, is resigning next month. She’s openly considering a run for a seat on the San Diego County Board of Supervisors.

San Diego County District Attorney Bonnie Dumanis, pictured here at a 2012 news conference, has publicly said she's considering a run for county supervisor. (Gregory Bull/AP)

San Diego County District Attorney Bonnie Dumanis, pictured here at a 2012 news conference, has publicly said she’s considering a run for county supervisor. (Gregory Bull/AP)

“Some people would say this office has shown an unusually high appetite for medical marijuana prosecutions that have not yielded much fruit,” said McElfresh.

Critics of the charges feel the business was unfairly targeted due to its high visibility in the legal cannabis space, noting the significant discretion granted to prosecutors.

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“There’s no question they were unfairly targeted,” said Wesley Hottot, one of Slatic’s attorneys, who points to a common refrain in the cannabis world: “Your business is legal if the local district attorney deems it legal.”

Others have faced similar prosecution. In June 2016, another cannabis operation was raided, this one in Sonoma County. Local authorities cited the manufacturing process, but declined to pursue criminal charges.

Some see the actions as opportune on the part of law enforcement, with prosecutors filing charges before more comprehensive regulations took effect.

“I don’t think we’ll see these in the future,” Hottot said. “We were seeing them in 2016 because police and prosecutors saw the writing on the wall that there was only so much time to target these legitimate businesses before their legitimacy was beyond question.”

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Regarding the recovered money, a spokesperson for the DA said: “The funds ordered returned by a civil judge were previously found by a criminal judge to be tainted by criminal conduct, however the District Attorney’s Office is complying with the civil judge’s recent order.”

It didn’t help the DA’s case that the one-year statute of limitations was expiring on the personal money. But a longer statute of limitations, three years, exists for seized business assets. Slatic is unlikely to see them without a vigorous legal fight, at least until 2019.

Legal challenges to cannabis prosecutions and asset seizures are becoming more common in California, Cindrich added. Though, “historically people plead guilty because they don’t want to face going to trial and losing. That empowers the DA’s office to continue filing charges and moving forward against these individuals.”

Caption Caption Caption

Heavily armored law enforcement officers arrest one of the few Med-West employees working on the morning of the Jan. 2016 raid.

In a strange sidebar that has not been reported elsewhere, investigators, in Slatic’s view, made the probe disturbingly personal. One year before the raid, Slatic’s son, who had been in drug rehabilitation, escaped, relapsed and fatally overdosed. Slatic says investigators piled sympathy cards he’d kept in his desk on the office floor, and placed the funeral invitation “front and center” on his desk. “That was their way of saying we know about this, and fuck you. They made it deeply personal when they attacked my family and my dead son.”

In an email, the district attorney’s office said it could not address that claim or other facts about the case because the investigation is ongoing.

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A press release accompanying the recent charges seemed to address the timing of the criminal complaint, saying that the “year-long, complicated investigation faced delays both in court and out.” It quoted Dumanis as saying, “We wanted to be thorough and make sure we got it right.”

With its assets seized, Med-West was forced to shut down and to sell a portion of the building it owned. A separate case continues for the $324,000 in cash. If not for the pro-bono representation, Slatic would have given up pursuing the seized money by dint of spending more on legal fees than was at stake, he said.

Even with the money returned, the ordeal has taken its toll on the three-dozen employees who lost their jobs, not to mention Slatic himself. “My cholesterol is through the roof. I can’t sleep through the night. It’s emotionally devastating when when 17-year-old daughter cries to you about how they took your money,” Slatic said.

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With the criminal charges he’s facing, the returned $100,000 could be a blip compared to the punishment—or at least the high-stakes legal proceedings—Slatic now faces.

Bruised but not deterred, Slatic launched a new company before the charges were filed. It’s still in cannabis, but this time it’s a business that only deals with intellectual property—he won’t touch the plant or derivative products. The company expected to launch a line of cannabis-infused brain supplements this summer, but the charges may complicate that. “I do intend to stay in the industry, even though my consulting business has lost two clients already because of me being charged,” he said.

Slatic promised that he wouldn’t let the threat of jail time dissuade him. “I won’t leave the industry or my activism,” he said. Nor will he drop the legal fight that began with the raid. “They made it my personal mission to fight this until the day I die.”

Chase Scheinbaum's Bio Image

Chase Scheinbaum

Chase Scheinbaum is a journalist who has written about rosin for
Bloomberg Businessweek and about other things for Village Voice, Men's Journal, Thrillist, Backpacker, and other publications. He’s a writer-at-large for The Inertia and Fatherly. His superpower is speaking Danish.

View Chase Scheinbaum's articles

  • Open Minds

    I suggest our so called elected officials and government employees re-read Article V of our Constitution. Specifically the following: “nor be
    deprived of life, liberty, or property, without due process of law”.

    Article [V] (Amendment 5 – Rights of Persons)

    No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offence to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be
    deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.

    • squarepush3r

      greedy parasites

  • Jason Olszanicky

    Bonnie Dumanis is a Terrorist

  • Terrie Best

    I’ve spoken to many cannabis defendants who report what James experienced with his son’s sympathy cards. Most of the stories are too embarrassing and lewd to write here. Believe it, cops are disgusting, dangerous people. These intimidating tableaus left by narcotic cops are common. I’ve heard they like to make disturbing messes. I’ve heard it too many times for it not to have some truth to it.

    • President Gas

      Sounds like you’re jealous they won’t go near your “drawers”.

  • President Gas

    Bhang took a big hit from this. Lots of cartridges and chocolate bars were lost. Fact is ….. he was extracting and it was illegal to do so. Got greedy.

    • Kristin Larson

      Extraction…exactly! I have read elsewhere that evidence of illegal extraction was what triggered the raid, and the lawyers’ emails aiding and abetting in hiding the extraction process is the cornerstone of the criminal case. Why is that not even mentioned in this article? This omission undermines the credibility of the author if you ask me. How can we learn from these cases if both sides of the legal argument are not reported? Am I missing something?

      • President Gas

        It’s written by a pro-weed rag so therefore he’s the victim of course. They also didn’t mention the biggest and most damaging charges against him ….. inter-state trafficking. He was manufacturing oil in California and selling it to Colorado. If true ……. that’s the charge that puts him away.

        • Kristin Larson

          Well, I am more or less pro-weed myself, but as a lawyer interested in the legalization framework and in determining what activities represent the greatest risks for those operating in the state, I want to read all sides and analysis of same. in general, Leafly is not a pro-pot echo-chamber but this article moves them into a more questionable light as a source of good reporting on the topic.

  • Legalize420

    I am all the way on the east coast. Does this affect me personally? No. But in just about every other regard it hits hard. I think this article was well written, and it does show how low and dirty pigs are, hence their name. What they did regarding his son disgusts me and I have had many possession cases I have gone to court and probation for. My first was for refusing community service. I’m glad I did. Slatic IS the victim here and regardless I give my best wishes to him, and his fight. Doesn’t surprise me the pigs lied to make this happen. That’s all they ever do. And finally, this article was well written and informative. Good for you Slatic for staying in the industry. Sad you won’t work with the plant anymore. I would. Arrest me for a plant, 2 more will be growing once I’m out. Never give up, NEVER surrender. And Fluck the FEDS, DEA, Government, and piggies. You know who you are… I support FREEDOM all those entities support corruption and chaos AND destruction of lives and liberties. We need to abolish and reset the government, it’s presence, the feds, go back to hemp and get rid of polyester and fossel fuels, and Make America Great Again! ✌😊✌

  • Maria Harigforman

    Thieving thugs ! unbelieveable,one day I hope there will be hell to pay for the likes of the thugs who conducted the raid and ordered the raid.This must stop.