Local Marijuana Collective Founder to Face Federal Charges

The owner of an Inland Empire chain of marijuana stores is due to face trial next week in Los Angeles on charges of violating federal pot laws.

Aaron Sandusky, 42, of Rancho Cucamonga -- founder and owner of G3 Holistic stores in Upland, Colton and Moreno Valley -- is charged with six felony counts, including conspiracy to manufacture and possess with intent to distribute marijuana and possession with intent to distribute the drug, according to the U.S. Attorney's Office.

The trial, which is scheduled to begin Tuesday in Los Angeles before U.S. District Judge Percy Anderson, is expected to be watched closely by those on both sides of the medical marijuana issue.

A federal indictment alleges that the now-closed G3 Holistic chain was using California's Prop. 215 and other state laws regulating legal medical marijuana sales to cover for an illegal for-profit marijuana growing and sales operation that took in more than $3.3 million during an eight-month period last year.

An Internal Revenue Service analysis revealed that withdrawals from G3 accounts were almost equal to the $3.3 million in deposits and were designed "to maintain the facade of G3 Holistic as a non-profit organization," the U.S. Attorney's Office contends.

Sandusky's attorney, Roger Jon Diamond, contends that his client was running a perfectly legal operation under California law.

Under federal law, marijuana is an illegal drug. Federal prosecutors in California said last year that they would begin investigating dispensary operations they believed were skirting Prop. 215 regulations.

A  2009 memo from former Deputy Attorney General David W. Ogden details guidelines for federal prosecutors in states that have enacted laws authorizing the use of marijuana for medical purposes. Diamond said he plans to use that memo as part of his defense. The so-called "Ogden Memo" gave some assurance to Sandusky and other providers in medical marijuana states that they would not be targeted by federal agents as long as they abide by state rules, Diamond said.

"It's a horrible situation," the attorney said. "There is no uniform national policy on enforcement of marijuana law. It's too arbitrary."     Sandusky's brother Keith and four other former employees of G3 Holistic were also charged and have pleaded guilty in the case. All five are awaiting sentencing and could be called to testify against Sandusky, Diamond said.

According to the U.S. Attorney's Office, Sandusky ignored a series a warnings that his Upland store was operating in violation of the law. The warnings came from local officials, through letters from the Department of Justice, during the execution of search warrants and through civil lawsuits, federal prosecutors said.

Sandusky could face a life sentence if he is convicted on all counts.

The trial is expected to last through the end of the week.