Mendocino County supervisors have agreed to a settlement with the U.S. Attorney's Office allowing them to turn over records from the county's defunct medical marijuana permitting program without permittee names, addresses or other personal identifying information, officials said.

Supervisors, in turn, will drop their legal bid to suppress federal grand jury subpoenas issued last fall for "any and all records" linked to the program in exchange for protections on individual growers and permit applicants.

The settlement permits the county to redact names, phone numbers, addresses, parcel numbers, bank acount numbers and other information that would identify those who participated in the program, board Chairman Dan Hamburg said Friday.

"We did not want to give up what we considered to be proprietary information, particularly information that had to do with people's health," Hamburg said.

"Maybe I wouldn't call it a big win for the county, but I think we resolved the issue pretty well for the county," Supervisor John Pinches said, "and we protect the rights of the people in the ... program."

A grand jury assembled by U.S. Attorney Melinda Haag of the Northern California District issued subpoenas Oct. 23 seeking application and inspection records, financial account numbers, emails and other communications related to the program.

Approved in 2010, it at one point offered medical marijuana collectives willing to complay with a host of regulatory requirements permits to grow up to 99 marijuana plants at a time.

Applicants paid $1,500 for the permits, as well as monthly inspection fees of about $500 and an additional $50 each for tags marking individual plants being grown under a permit.

The scheme, administered by the Mendocino County Sheriff's Office, was abandoned early last year under the threat of a federal lawsuit only after generating close to $830,000 toward the sheriff's payroll.

Some county officials and observers have speculated that the U.S. Attorney's objective in pursuing the subpoenas was to trace and perhaps seize the proceeds that resulted.

But the immediate concern of most critics has been private health and financial information that would jeopardized if all records being sought were turned over.

In December, the county filed a motion in federal court to quash the subpoena, citing, among other legal arguments, the fact that the county's system was developed under the 2004 California Medical Marijuana Program Act which specifically prohibited local agencies from releasing confidential medical information at risk of criminal penalty.

Oral arguments on the motion to quash the subpoenas, delayed several times at the federal government's request, were scheduled for Tuesday.

The settlement announced earlier this week by county supervisors offers "some comfort in the fact that they are finally taking steps to protect the citizens of their county from federal intervention," one medicinal marijuana provider said upon learning of it.

San Francisco attorney Adam Wolf, who filed a friend of the court brief on behalf of medical marijuana groups supporting the county's legal case, was more enthusiastic.

There was considerable and understandable concern among the people who participated in the County of Mendocino's medical marijuana program when the subpoena was issued," Wolf said. "At stake was the confidentiality of their private information.

"The settlement that was reached in this case allays their concerns by appropriately redacting all personal, identifying information form the documents," Wolf said.

But Sheriff Tom Allman said the county is still facing scrutiny in the matter as lawyers prepare to turn over redacted documents to the U.S. Attorney.

Moreover, neither he nor other county officials have been able to find out what exactly the federal government is targeting.

"We're in the infancy stage, and we'll have to see what happens," Allman said.

You can reach Staff WriterMary Callahan at 521-5249 or mary.callahan@pressdemocrat.com.