With her blond pixie haircut and black tailored skirt suits, attorney Jessica McElfresh represents the new face of California marijuana law: polished, professional, and regulation-oriented. Yet early on the morning of May 24, a SWAT team raided McElfresh’s San Diego home, where she lived with her mother and boyfriend. Heavily armed police officers handcuffed her and hauled her, still wearing pajamas, to the backyard, where they read the arrest warrant out loud—just loud enough for the neighbors to hear. That day, McElfresh was the criminal, not the attorney.
McElfresh was accused of being an accessory to a crime related to her representation of Med-West, a licensed cannabis manufacturer and distributor, and its owner James Slatic, who had been simultaneously indicted for more than a dozen related felonies for fraud and money laundering that could lead to 15 years in prison. The case against not only Slatic’s business but also his lawyer appears to have been a broad assault by a prosecutor’s office determined to charge as excessively as possible and win, even if it meant being hazy about the facts behind the case.
The criminal indictment for McElfresh has hinged on an email she wrote to her client about a regulatory inspection, where she discusses giving the inspector “plausible deniability.” McElfresh and her client Slatic have both said this email was taken out of context, and it’s not clear from the charging documents how the email relates to the alleged crime. McElfresh told me in a phone interview this month that at the time of her arrest, it was clear she was being charged, “But with what?” she asked rhetorically. She said that certain attachments to the indictment were sealed, meaning she was unable to see them, and those attachments pertained to an unknown informant.
Tanya Sierra, the San Diego DA’s public affairs officer, gave an enigmatic response when I asked about the charges against McElfresh: “When it comes to prosecuting illegal activity by any business, if a crime is committed and we believe we can prove it beyond a reasonable doubt, we file charges.” The spokeswoman would not clarify under what theory McElfresh was accused nor why her other clients are relevant—the state has sought to force out information about other McElfresh clients in blatant violation of attorney-client privilege. “Attorneys who do not break the law should have no concerns about attorney-client privilege,” Sierra offered, without going into further detail.
In an uncertain landscape for marijuana legalization, McElfresh is among a crop of lawyers who specialize in helping businesses navigate the complex legal and regulatory landscape since California legalized medical marijuana in 1996. (Recreational marijuana was voted to be legalized last year and will be fully legal by January.) McElfresh’s criminal charges represent the latest in the befuddling war against legalized pot. Attorney General Jeff Sessions has promised to ramp up the “war on drugs” and opposes marijuana legalization, garnering the support of prosecutors across the nation. The San Diego DA’s office, once under the famously anti-pot leadership of Bonnie Dumanis and now under her anointed successor, Summer Stephan, has taken the narrowest possible construction of marijuana laws and seems poised to challenge the will of the people who overwhelmingly voted in favor of legal marijuana.
Many observers believe that Dumanis, and now Stephan, have been pursuing Med-West and now McElfresh and her clients in a quest to seize as many assets as possible from marijuana distributors before California solidifies its regulations in early 2018. “This office does not respect medical marijuana laws,” said Alex Kreit, a professor at Thomas Jefferson School of Law and marijuana law expert who has faced Dumanis’ office in court before.
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In January 2016, more than a year before McElfresh’s arrest, a heavily armed SWAT team barged into the offices of Med-West to serve a warrant on Slatic. Slatic was no fly-by-night operator—he was a founding member of the California Cannabis Industry Association and ran a legal business, paying taxes and employees and following all relevant regulations. Med-West supplied more than 1,000 dispensaries. In the raid, the DA’s office seized cannabis products worth hundreds of thousands of dollars, computers, and more than $300,000 in cash. The office also used civil forfeiture laws—which allow prosecutors to take money without proof of wrongdoing—to seize more than $100,000 from Slatic’s personal accounts. That money belonged to an account in the names of his college-age daughters and his wife.
With help from Institute for Justice, a nonprofit advocacy group, Slatic forced the DA’s office to pay him back with interest. Prosecutors never explained why they thought the money was relevant to the case or why they had seized it. But they didn’t stop pursuing Med-West. A few days after Slatic won the return of his assets, in May of this year, the DA’s office brought multiple felony charges against Med-West, Slatic, and McElfresh.
In the indictment, prosecutors allege that Med-West was not following all the regulations for manufacturing cannabis oil, a potent product that has gained popularity in recent years. Hash oil (also called wax or dabs) is concentrated THC used in edibles and other medical marijuana products. It is not illegal, but its production is regulated because certain chemical processes used to make the oil can be dangerous in uncontrolled environments. The criminal complaint alleges that all of Med-West’s profits from the sale of cannabis oil are illegal.
In a phone conversation and in court documents, Slatic asserts that he was abiding by all relevant regulations, including proper ventilation and all certificates of compliance required by the city’s and county’s regulatory codes. (Incidentally, Slatic helped write the codes.) His attorneys, including McElfresh, have additionally argued in court filings that current laws are vague as to what chemical production processes are permitted and under which regulatory scheme. Kreit, the law professor, also argues that all marijuana regulations, including production and distribution, are “unconstitutionally vague.”
According to McElfresh, she was one of many lawyers representing Med-West in connection to the ongoing investigation and asset seizure. She was also vocal in the press on the legality of Med-West’s businesses and advocated for marijuana regulations in the city, which, according to Slatic, had a “history of being extremely violently prosecutorial towards cannabis businesses.”
Beyond the implications for legalized marijuana in California, however, is the much thornier issue of attorney-client privilege. Generally, all communications between a client and attorney are privileged unless the information is available from another source. While privilege is not the same as confidentiality—which requires the lawyer to keep mum even after the client dies—privilege applies to communication between a lawyer and client so long as it’s about the case. This tradition has historically been the bedrock of our adversarial criminal justice system, allowing clients to consult with attorneys without fear of negative repercussions.
In this case, by alleging that McElfresh is part of a criminal conspiracy, Stephan’s office says that McElfresh’s emails are relevant to the criminal investigation against her. Worse, prosecutors are seeking as part of discovery all of McElfresh’s email communications with all of her clients, something McElfresh’s attorneys are still trying to limit. During a July 7 hearing, attorneys representing McElfresh’s other cannabis clients clamored to object to violations of their clients’ privileged communications.
And, at the most recent hearing this week, Judge Laura Halgren agreed in large part with McElfresh and her attorneys and limited the scope of the prosecutor’s search by requiring the DA to justify why privileged documents were necessary, rather than assuming that they were relevant to the case. Halgren also required the DA’s office to release information regarding the confidential informant—which means the DA has a choice to provide information about the source of its information or dismiss the case to avoid revealing details.
Regardless of the outcome, the prosecutors’ actions send a chilling message to lawyers who want to work with marijuana clients. “An attorney needs to feel that they can freely give advice on areas that are murky in the law,” Michael Crowley, a criminal defense lawyer and member of the San Diego County Bar’s Ethics Committee, told In Justice Today about the case. The National Cannabis Bar Association, along with other pro-marijuana groups like Reason and LEAP, entered an amicus brief in McElfresh’s case that makes similar arguments.
The prosecution of Med-West didn’t happen in a vacuum. “San Diego has had a long history of taking the most conservative and limiting interpretation of California marijuana laws, and the appellate courts disagree,” McElfresh explained to me over the phone, citing other cases that have been overturned on appeal. Dumanis, the former DA, had an interpretation of marijuana laws that was “so conservative, it’s designed to be dismantling,” McElfresh said.
In one case against a seller named Jovan Jackson, Dumanis’ office argued against the legality of marijuana cooperatives; his conviction was overturned on appeal. Dumanis then pursued another marijuana case against Eugene Davidovich, who sold medical marijuana to an undercover cop who presented a prescription. Davidovich was also acquitted. In 2010, a deputy DA in Dumanis’ office authored a law review article arguing that storefront dispensaries were not formally legalized under California’s medical marijuana regulations, a theory that was shot down by California state courts.
When Dumanis retired last summer, pro-cannabis residents took to the streets to celebrate with signs like “Bonnie the Buzzkill Bully.” Stephan, Dumanis’ designated successor who took over as DA in June, hasn’t made specific statements about marijuana, but she has continued the case against Med-West and has shown no sign of pulling back.
When the law is a bit fuzzy, as marijuana regulations in California are right now, there is the danger of prosecutorial overreach. Wesley Hottot, another of Slatic’s attorneys who works for Institute for Justice, summed it up as: “Your business is legal if the local district attorney deems it legal.” In San Diego, it appears that prosecutors do not want to cede control.