Pubdate: Sun, 20 Nov 2011 Source: San Francisco Chronicle (CA) Copyright: 2011 Hearst Communications Inc. Contact: http://www.sfgate.com/chronicle/submissions/#1 Website: http://www.sfgate.com/chronicle/ Details: http://www.mapinc.org/media/388 Author: Eric Spitznagel 'GREEN RUSH' CAUSING RUCKUS IN COLORADO At the 2011 Hempcon medical marijuana convention in Denver in October, business lectures and panel discussions shared the program with more provocative events, like a Miss Hempcon pageant, in which scantily clad women - many dressed as nurses - danced for the audience. Offering a counterpoint to the spring-break-style high jinks, local attorney Joel Russman, speaking at a seminar called "Know Your Rights," warned aspiring medical marijuana entrepreneurs to practice restraint when promoting their businesses. "You don't want to attract a bunch of extra attention," he said, especially if your industry is breaking federal law. Sixteen states allow some form of legalized medical marijuana, but only Colorado allows marijuana businesses to operate as such. That makes it the first for-profit marijuana marketplace in the United States. Predictably, Colorado is in the midst of a marijuana boom. Between 2000 - when Colorado voters legalized marijuana for medicinal purposes - and 2008, Colorado issued roughly 2,000 medical marijuana cards to patients living in the state. By 2011, that number had jumped to more than 127,000 paying customers, according to the Colorado Medical Marijuana Registry, and at least 25,000 more have applications pending. The exploding demand for medical marijuana has triggered a "green rush," which has in turn rattled Colorado's old-guard legalization advocates. Michelle LaMay, chairwoman of Willie Nelson's Teapot Party in Colorado, would rather the for-profit side of marijuana disappear completely. "I've never met so many greedy slugs in my whole life," LaMay said. "I've taken calls from over 3,000 people who want to start their own cannabis business - all out-of-towners convinced there's a fortune to be made here." Most dispensary owners will laugh when asked about profits. Michael Bellingham, co-owner of one of Boulder's oldest medical marijuana suppliers, MM Dispensary, claims he has yet to make a dime after almost two years. Bellingham isn't discouraged, as medical marijuana is far from a conventional business. For one thing, he said, you have to be 100 percent self-financed. "You can't go to a bank and say, 'I have a business plan and I need to borrow money.' Banks are federally regulated, and marijuana is against federal law, so they won't touch you." The customer base is undeniable - a 2010 survey conducted by the Substance Abuse and Mental Health Services Administration revealed that 17.4 million Americans use marijuana, up from 14.4 million in 2007. The challenge for would-be marijuana tycoons is trying to keep up in an increasingly competitive business while marketing a product that is, at least on a national level, illegal. Outside of conventions like Hempcon, most Colorado medical marijuana dispensaries are hesitant about self-promotion. They avoid television ads or billboards, and even websites are a rarity. The main source of marketing tends to be print ads in local alternative newspapers. Norton Arbelaez and his partners, who co-own the RiverRock Wellness dispensaries in Denver and Telluride, have become the poster children of regulation obedience, following state guidelines for medical marijuana to an almost fanatical degree. "Compliance, compliance, compliance," said Arbelaez. "That's why I'm still standing." He's invested more than $45,000 in surveillance equipment alone, allowing Colorado regulators to watch over RiverRock "from seed to sale." And he wants the competition held to the same standards. "I'd like to see it that you can't own a dispensary in the state of Colorado unless you're a person of good moral character," Arbelaez said. "If you had a drug felony ever, you may not be an owner. If you haven't paid your taxes, you may not be an owner. Even if you're behind on your child support, you should be kept out." Thomas Raynes, executive director of the Colorado District Attorneys' Council, believes the cannabis business is inherently risky. "At any moment in time the federal government can exercise its power of pre-emption and do what they want," he said. There are ominous signs from California, where in October several medical marijuana dispensaries were closed or raided in a statewide crackdown. "The law has been hijacked by profiteers who are motivated not by compassion but by money," said San Francisco U.S. Attorney Melinda Haag. "Where there's marijuana, there's money, and lots of it." - --- MAP posted-by: Jay Bergstrom