Pubdate: Sat, 18 Jul 2009
Source: Times-News, The (Twin Falls, ID)
Copyright: 2009 The Associated Press
Author:  Marcus Wohlsen and Lisa Leff
Bookmark: (Marijuana - California)
Bookmark: (Marijuana - Popular)
Bookmark: (Marijuana - Medicinal)


A Drug Deal Plays Out, California-Style:

A conservatively dressed courier drives a company-leased Smart Car to 
an apartment on a weekday afternoon. Erick Alvaro hands over a white 
paper bag to his 58-year-old customer, who inspects the bag to ensure 
that everything he ordered over the phone is there.

An eighth-ounce of organic marijuana buds for treating his seasonal 
allergies? Check. An eighth of a different pot strain for insomnia? 
Check. THC-infused lozenges and tea bags? Check and check, with a 
free herb-laced cookie thrown in as a thank-you gift.

It's a $102 credit card transaction carried out with the practiced 
efficiency of a home-delivered pizza _ and with just about as much 
legal scrutiny.

More and more, having premium pot delivered to your door in 
California is not a crime. It is a legitimate business.

Marijuana has transformed California. Since the state became the 
first to legalize the drug for medicinal use, the weed the federal 
government puts in the same category as heroin and cocaine has become 
a major economic force.

No longer relegated to the underground, pot in California these days 
props up local economies, mints millionaires and feeds a thriving 
industry of startups designed to grow, market and distribute the drug.

Based on the quantity of marijuana authorities seized last year, the 
crop was worth an estimated $17 billion or more, dwarfing any other 
sector of the state's agricultural economy.

Experts say most of that marijuana is still sold as a recreational 
drug on the black market. But more recently the plant has put down 
deep financial roots in highly visible, taxpaying businesses:

Stores that sell high-tech marijuana growing equipment. Pot clubs 
that pay rent and hire workers. Marijuana themed magazines and food 
products. Chains of for-profit clinics with doctors who specialize in 
medical marijuana recommendations.

The plant's prominence does not come without costs, say some critics. 
Marijuana plantations in remote forests cause severe environmental 
damage. Indoor grow houses in some towns put rentals beyond the reach 
of students and young families. Rural counties with declining 
economies cannot attract new businesses because the available work 
force is caught up in the pot industry. Authorities link the drug to 
violent crime in otherwise quiet small towns.

"For those of us who are on the front lines, it's not about pot is 
bad in itself or drugs are bad," said Meredith Lintott, district 
attorney in Mendocino County, one of the country's top 
marijuana-producing regions.

"It's about the negative consequences on children. It's about the 
negative consequences on the environment."

Still, the sheer scale of the overall pot economy has some lawmakers 
pushing for broader legalization as a way to shore up the finances of 
a state that has teetered on the edge of bankruptcy. The state's top 
tax collector estimates that taxing pot like liquor could bring in 
more than $1.3 billion annually.

On Tuesday, Oakland will consider a measure to tax the city's four 
marijuana dispensaries, which the city auditor projects will ring up 
$17.5 million in sales in 2010. The city faces an $83 million budget 
shortfall, and expects the marijuana tax to raise $315,000.

Advocates point out that making pot legal would create millions if 
not billions of dollars more in indirect sales - the ingredients used 
to make edible pot products, advertising, tourism and smoking paraphernalia.

With a recent poll showing more than half of Californians supporting 
legalization, pot advocates believe they will prevail. And they say 
other states will follow.

Tim Blake is the proprietor of a 145-acre spiritual retreat center 
which holds an annual marijuana bud-growing contest in the heart of 
Northern California's pot-growing country.

Politicians, he says, are "going to see the economic benefits, 
they're going to see the health benefits and they're going to jump on 
the bandwagon."

On a property flanked by vineyards, Mendocino County farmer Jim Hill 
grows marijuana for up to 20 patients, including himself and his 
wife. He believes passionately in marijuana's purported ability to 
treat the symptoms of diseases ranging from cancer to Alzheimer's; he 
says his wife suffers from a serotonin imbalance, and he uses the 
drug to treat digestive problems and intestinal cramping.

Hill's plants enjoy careful nurturing in a temperature-controlled 
greenhouse. On a recent spring day, his college-age son spread bat 
guano to fertilize two dozen 6-foot-tall plants.

Hill is 45 years old; he says he spent $10,000 to set up the garden. 
Patients receive their drugs free in exchange for helping with his crop.

"It's kind of like living on an apple orchard," Hill said. "You don't 
pay for an apple."

Though marijuana is cultivated throughout California, the most prized 
crops come from the forested mountains and hidden valleys of 
Mendocino, Humboldt and Trinity counties - the Emerald Triangle.

The economic impact of so much pot is difficult to gauge. Authorities 
say the largest grows are run by Mexican drug cartels that simply 
funnel money from forest-raised crops back into their own bank accounts.

Still, marijuana money from outdoor and indoor plots inevitably flows 
into local coffers. Marijuana increases residents' retail buying 
power by about $58 million countywide, according to a Mendocino 
County report. The county ranks 48th out of 58 counties in median 
income but, by counting pot proceeds, could jump as high as 18th.

Businesses benefit from mom-and-pop growers who cultivate pot to 
supplement their incomes and from marijuana plantation workers who 
descend on the Emerald Triangle from all over the country for the 
fall harvest. Pot "trimmers" can earn more than $40 per hour.

In Ukiah, the county's largest city, business owners say the extra 
cash is crucial. "I really don't think we would exist without it," 
says Nicole Martensen, 37, whose wine and garden shop is stocked with 
bottles from county vintners.

The skunk-like smell of marijuana hangs over the town of about 11,000 
during the October harvest, when cash registers brim with $100 bills. 
Sometimes the wads of cash spent in Martensen's shop come dusted with pot.

But Ukiah banker Marty Lombardi says existing businesses cannot 
compete with pot industry wages for workers. Lombardi's bank does not 
make loans to anyone suspected of trying to fund a pot operation, but 
he said most growers do not need them.

"I don't think you or I have any sense for how much money is 
generated," he said.

Mendocino County Sheriff Tom Allman says medical marijuana operations 
that follow state and county laws will face no hassles from his 
department. His deputies left intact 154 marijuana grows they visited 
last year, he said

"If you're living in the boundaries, I'm not going to mess with you," 
Allman said.

Which is not to say that there is no legal risk to growing, selling 
or buying marijuana. Federal laws still apply, and pot dealings not 
deemed medicinal are considered criminal by the state.

Local, state and federal authorities pulled up 364,000 plants across 
Mendocino last year. And the state Department of Justice reported 
more than 16,000 felony arrests and nearly 58,000 misdemeanor arrests 
for marijuana offenses in 2007 - the highest numbers in a decade.

Sparky Rose sits in the federal prison in Lompoc, serving a 37-month 
term. Law enforcement officials insist he is one of many sellers who 
have used the medical marijuana law as a guise for old-time drug 
dealing. Rose does not disagree, although he would like to think he 
helped some legitimate pot patients in the process.

A one-time Web designer, he started out in 2001 making $15 an hour as 
a "bud tender" working the counter at an Oakland club. Four years 
later, he was overseeing a dispensary chain with stores in seven 
cities, 283 employees and sales reaching $5 million a month.

That's not as much as it seems, he says. Much of the money went to 
pay salaries, to purchase equipment and to buy 200 pounds of 
marijuana each week.

Rose says he was making $500,000 a year before his 2006 arrest, a sum 
he considers fair given the chain's volume and the risk he assumed as 
the company's public face. Before opening a new location, he would 
meet with local officials and police to get their implicit OK.

"We operated out in the open, and the feds knew who we were and they 
let us do it for four years, so as time goes on you get this 
comfortable feeling," he says.

"While I was still in the business, a lot people would ask me, 'I'm 
thinking about starting a club, what advice do you have?' "And I'd 
say, 'The biggest warning is sooner or later, you will start to think 
it's legal.'"

Even people accustomed to buying marijuana over the counter are 
impressed when they visit the Farmacy, a dispensary-cum-New Age 
apothecary with three locations in Los Angeles. Decorated in soft 
beige and staffed by workers in lab coats, the Venice store sells 
organic toiletries, essential oils and incense along with 25 types of 
pot stored in glass jars, including strains such as Beverly Bubba and 
Third Eye.

Anyone can shop there, but to buy the cannabis-infused gelato, olive 
oil, soft drinks and other "edibles," customers must show a doctor's 
recommendation, have the information verified by the doctor's office 
and obtain a patient identification number for future visits.

During a two-hour span, the dozen or so customers who made a purchase 
all bought pot products and paid the 9.25 percent state sales tax on 
top of their purchases. The clubs, which are not supposed to turn a 
profit, call their transactions "donations."

Allen Siegel is 74; he is dying of cancer and wants to try smoking 
marijuana to ease his pain without knocking him out like prescription 
drugs do. So his wife, Ina, brought him to the Farmacy for his first 
visit as a legal pot patient.

"You go in there and they have so many choices," she says.

California's "green rush" was spurred by a voter-approved law 13 
years ago that authorized patients with a doctor's recommendation to 
possess and cultivate marijuana for personal use. Although a dozen 
other states have adopted similar laws, California is the only one 
where privately owned pot shops have flourished.

Los Angeles County alone has more than 400 pot dispensaries and 
delivery services, nearly twice as many outlets as Amsterdam, the 
Netherlands capital whose coffee shops have for decades been 
synonymous with free-market marijuana.

Promoted as a way to shield people with AIDS, cancer and anorexia who 
use marijuana from prosecution, the 1996 Compassionate Use Act also 
permitted limited possession for "any other illness for which 
marijuana provides relief."

The broad language opened the door to doctors willing to recommend 
pot for nearly any ailment. In a survey of nearly 2,500 patients, 
longtime Berkeley medical marijuana advocate Dr. Tod Mikuriya found 
that almost three-quarters of the patients used the drug for pain 
relief or mental health issues.

Dispensaries began selling marijuana, although they were risking 
federal charges. Some operators have become less fearful since U.S. 
Attorney General Eric Holder said this year that the Justice 
Department would not target pot operations following state laws, 
reducing the risk of random federal raids that existed under the Bush 

California's pot dispensaries now have more in common with a corner 
grocery than a speakeasy. They advertise freely, offering discount 
coupons and daily specials.

Justin Hartfield, a 25-year-old Web designer and business student, 
founded, where pot clubs and doctors who write medi-pot 
recommendations list their services and users post reviews. Hartfield 
says the year-old site brought in $20,000 this month, an amount he 
expects to double in August.

Hartfield exhibited at THC Expo, a two-day trade show at the Los 
Angeles Convention Center that attracted an estimated 35,000 
attendees in June. There was hydroponic gardening equipment and bong 
vendors and bikini-clad models wearing leis made of fake marijuana leaves.

Like just about everyone else connected to the cannabis trade, 
Hartfield has a letter from a doctor that entitles him to buy medical 
marijuana from a dispensary. But he sees no point in pretending he is 
treating anything more than his taste for smoking weed.

"It is a joke. It's a legal way for me to get what I used to get on 
the street," he said.

He recalls telling the doctor who provided the referral that he 
suffered from insomnia and anxiety, though neither was true. As he 
signed the paperwork, the doctor "congratulated me like I was getting 
my degree from Harvard."

What would happen if marijuana was legal - not just for medical uses, 
but for all uses?

Assemblyman Tom Ammiano, D-San Francisco, wants the state to tax and 
regulate all pot as it does alcohol. State Board of Equalization 
chairwoman Betty Yee, a supporter, projects the law would generate 
$990 million annually through a $50-per-ounce fee for retailers and 
$392 million in sales taxes. (The state now collects $18 million each 
year in taxes on medical marijuana.)

The state would not start collecting taxes on marijuana under 
Ammiano's bill until the federal government lifts its restrictions on the drug.

That's not enough for pro-pot activists who want Californians to vote 
next year on a proposal that would allow adults to legally possess up 
to one ounce of pot and allow cities to sell and tax the drug.

"Local governments are malnourished and in need of revenue badly," 
said Aaron Smith, state policy director for the Marijuana Policy 
Project, which advocates legalization. "There's this 
multibillion-dollar industry that's the elephant in the room that 
they're not able to tap into."

Lintott, the Mendocino prosecutor, is not convinced that legalization 
would put an end to the underworld's marijuana operations. She argues 
that big-time growers would never bother filing tax returns. 
"Legalizing it isn't going to touch the big money," she says.

But others predict the black-market business model would fall apart.

Large-scale agri-businesses in California's Central Valley would 
dominate legal marijuana production as they already do bulk wine 
grapes, advocates argue. Pot prices would fall dramatically, forcing 
growers to abandon costly clandestine operations that authorities say 
trash the land and steal scarce water.

And legalization, supporters insist, would save state and local 
governments billions on police, court and prison costs.

But others survey California in 2009 and say the cannabis future is 
now. Richard Lee has parlayed a pair of Oakland dispensaries into a 
mini-empire that includes a marijuana lifestyle magazine, an "adult 
consumption" club, a starter plant nursery and a three-campus 
marijuana trade school. Oaksterdam University's main campus is a 
prominent fixture in revitalized downtown Oakland.

All without legalization.

"It's like here's reality, and here's the law," Lee says. "The 
culture has gone so far beyond the law, people have gotten used to 
being able to get quality product. They are not going to go back."
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MAP posted-by: Richard Lake