Local Marijuana Collective Founder Convicted of Federal Charges

The founder of a local marijuana collective, that had a dispensary in Upland and Colton, was found guilty by a federal jury of conspiracy and possession with intent to distribute marijuana plants, Federal officials said late today.

Aaron Sandusky is the former president of G3 Holistics, Inc., which also had an office Moreno Valley. Sandusky had been waging ongoing battles with local and federal officials for some time.

The jury found Sandusky conspired to manufacture and/or possess with intent to distribute at least 1,000 marijuana plants, according to officials.

Sandusky faces a mandatory minimum sentence of 10 years in prison, according to a news release from the U.S. Attorney’s office. A sentencing hearing has been scheduled for Jan. 7.

The jury, however, could not reach unanimous verdicts on four remaining counts in the indictment, which charges Sandusky with maintaining a drug-involved premises at each of the G3's stores. The court declared a mistrial on these counts, U.S. Attorney officials said.

U.S. District Judge Percy Anderson was assigned to the trial. The federal indictment alleged the now-closed G3 Holistic chain used California's state laws that govern legal marijuana sales, such as Prop. 215, as a cover for an illegal for-profit marijuana growing and sales operation.

Officials allege the operation 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.

City News contributed to this report.