The Los Angeles Police Department, the DEA and the IRS continue to investigate Compassionate Caregivers Inc. The company closed its seven dispensaries after the Los Angeles Police Department seized its bank accounts June 6th. "We will not be taking action against medical marijuana facilities unless we can link those facilities to street sales and violent crime or gang activity here in Los Angeles," said LAPD spokesperson Lt. Paul Vernon. "We found some connection between that location and street crime in our city."

"It's absolutely laughable to think that a corporation with seven locations across the state is somehow linked to gangs or violent crime," countered Compassionate Caregiver's Executive Director Sparky Rose.

Rose says the search warrant used by the LAPD to raid the West Hollywood clubs made no mention of gangs or violence. According to Rose, the warrant mentioned only two patients who entered the West Hollywood facility with forged medical cannabis ID cards - and a patient who claimed to have bought more than six mature plants at time from the club which Rose says did not sell mature plants.

Attorney Bruce Margolin who is representing the company's West Hollywood dispensary that was raided by the LAPD on May 13, says the club never received a cease and desist order. Margolin challenges reports that the club was targeted because it sold eight ounces to a pound of cannabis to patients at a time. He notes that SB 420 sets no limits on how much cannabis a dispensary can sell to customers.

According to Margolin, Compassionate Caregivers worked closely with the West Hollywood Chamber of Commerce and the West Hollywood Sheriffs Department which were unhappy when the LAPD strayed out of their jurisdiction to bust the West Hollywood dispensary.

"Each police agency has their own philosophy and idea of what the law is and this is a problem," said Margolin. "We have a very sad situation here where the will of the people seems to be undermined and the law is only as good as the people who enforce it."

Rose says the LAPD exaggerated the amount of cannabis seized from the West Hollywood dispensary by weighing the cannabis together with the acrylic jars it was contained in. He says the 800 pounds of cannabis reportedly seized is off by more than an order of magnitude. "There was less than 50 pounds of dry cannabis on the premesis and then some cuttings in rockwool, some edibles, and some extracts," said Rose. "The killer for us was the tainted sodas which they weighed in the bottles."

"Everybody involved with medical cannabis is confused," said Rose who said he was informed about the seizure of his company's assets when he attempted to make a bank deposit. "It this the [federal] government involved saying 'we want to do this,' or is this the LAPD doing it just because they can."

Rose added that the shut down of the seven dispensaries has forced the lay off of 225 employees who have also lost their health insurance. He says the state must now pay unemployment benefits to those employees. According to Rose, Compassionate Caregivers had a weekly payroll of $170,000. "We were definitely trying to contribute a lot of money to the Oakland economy," said Rose. "We were a for-profit business, but we put the profits into opening new clubs."

Rose confirmed that his profit margin is between 5% and 15% after taxes and the amound of money seized from Compassionate Caregivers is less than 25% of its annual payroll. "While the LAPD might see this as a windfall, the cost will be borne by the California taxpayer while all of our employees draw unemployment and have to flood other social programs as a result of having no COBRA option for healthcare," said Rose. "With one phone call from the LAPD to the West Hollywood Sheriff, all if this could have been avoided...it's sad."