- The Washington Times - Monday, July 20, 2009

SAN FRANCISCO

A drug deal plays out, California-style. A conservatively dressed courier drives a company-leased Smart 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.

One-eighth of an ounce of organic marijuana buds for treating his seasonal allergies? Check. One-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 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.

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

But pot in California also props up local economies, mints millionaires and feeds a thriving industry of startups: stores that sell high-tech marijuana-growing equipment, pot clubs that pay rent and hire workers, chains of for-profit clinics that specialize in medicinal-marijuana recommendations.

The plant’s prominence does not come without costs, some critics say. Marijuana plantations in remote forests cause severe environmental damage. Authorities link the drug to violent crime in otherwise quiet small towns.

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, companies that 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.

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

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

Politicians, he said, 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. Mr. Hill’s plants enjoy careful nurturing in a temperature-controlled greenhouse. On a recent spring day, his college-aged son spread bat guano to fertilize two dozen 6-foot-tall plants.

Mr. Hill, 45, said 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,” he said. “You don’t pay for an apple.”

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. In Ukiah, Mendocino County’s largest city at 11,000 residents, business owners say the extra cash is crucial.

“I really don’t think we would exist without it,” said Nicole Martensen, 37, whose wine and garden shop is stocked with bottles from county vintners.

Mendocino County Sheriff Tom Allman said medicinal-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,” Sheriff Allman said.

That 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, where police made about 74,000 pot-related arrests in 2007.

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 medicinal 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 working the counter at an Oakland pot club. Four years later, he was overseeing a dispensary chain with stores in seven cities, 283 employees and sales reaching $5 million a month.

Rose said 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.

“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?’ ” he said. “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 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.

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 the medication knocking him out, as 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 said.

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. 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 WeedMaps.com, where pot clubs and doctors who write medi-pot recommendations list their services and users post reviews. Mr. Hartfield said the year-old site brought in $20,000 this month, an amount he expects to double in August.

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

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

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