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."
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