Holder Vows To End Raids On Medical Marijuana Clubs

Holder Vows To End Raids On Medical Marijuana Clubs

Attorney General Eric Holder said at a press conference Wednesday that the Justice Department will no longer raid medical marijuana clubs that are established legally under state law. His declaration is a fulfillment of a campaign promise by President Barack Obama, and marks a major shift from the previous administration.

After the inauguration, the Drug Enforcement Administration (DEA) continued to carry out such raids, despite Obama's promise. Holder was asked if those raids represented American policy going forward.

"No," he said. "What the president said during the campaign, you'll be surprised to know, will be consistent with what we'll be doing in law enforcement. He was my boss during the campaign. He is formally and technically and by law my boss now. What he said during the campaign is now American policy."

The exchange takes place at about the 25:00 mark here.

Holder's declaration is a high point for the movement to legalize medical marijuana, which has been growing for decades despite federal hostility.

"It's good news for people in California who are so ill that they have gotten a doctor's note in compliance with the law," said Sen. Barbara Boxer (D-Calif.) when told of Holder's promise. "If you have a doctor's note, you should be able to get whatever medicine you need."

Sen. Dianne Feinstein (D-Calif.) was not as quick with approval. "I've got to think about that a little bit," she said. Feinstein was mayor of San Francisco when in the '70s and '80s when the issue was first being debated.

In 2007, for a book on drug culture and drug trends, This Is Your Country On Drugs, that will be released in June, I toured a number of the medical marijuana dispensaries in question and interviewed their owners and customers. This is what I found, excerpted from the book:

* * * * *

A first-time visitor to Harborside Health Center might have a hard time believing he's about to enter "an extraordinary environment of medical care, honesty, and friendliness," as the place describes itself online. Situated in a nondescript warehouse just off the freeway in Oakland, California, it's labeled only with the giant digits of its street number, 1840. Two security guards in blue are posted outside, and the facility is also equipped with motion detectors, video and audio surveillance, and laser alarms. The guards are, in fact, extraordinarily friendly, offering professional smiles to those who approach. But they're not exactly welcoming, and for good reason: at Harborside, no one gets in without a medical-cannabis card or a recommendation from a doctor.

I had come with a federal medical researcher who'd recently finished a long study of medical-cannabis clubs in the Bay Area and was able to vouch for me. But it's not exactly impossible to get a card or a recommendation. Ads in alt-weeklies throughout the state advertise doctors willing to give a consultation to anyone who has one of a seemingly endless list of symptoms and illnesses that might be treatable with medical marijuana. Take the ad for Aldridge Medical Care that runs in the LA Weekly and features a guy wearing a white coat with a stethoscope hanging around his neck. Walk-ins are accepted, the text states, as long as the patient suffers from "pain, migraines, cramps, anxiety, depression, ADHD, nausea, IBS, insomnia, etc."

Once you get the card, it's not much harder to find a shop. On the very same page of the Weekly, the Green Earth Pharmacy offers "Free Samples" to "first time patients with this ad." And for the consumer looking for choices, there's WeedTRACKER.com, which, yes, tracks the varieties of weed available at Harborside and similar centers, allowing patients to rate the quality of each establishment - a Better Business Bureau of sorts. ("[W]e carry over 50 different types of buds, plus all our edibles and concentrates. If we don't have what you are looking for, we probably have something you will like," Harborside promises.) If you're not an official medical-cannabis patient, WeedTRACKER suggests that you "click here"--which sends you directly to Google, a site almost as good at finding pot dispensaries.

We walked through Harborside's metal detector and waited for the two owners, a guy named David Wedding Dress and his partner, Steve DeAngelo. They opened the center in October 2006, on a day that three other clubs in the Bay Area were raided. "We had to decide in that moment whether or not we were really serious about this and whether we were willing to risk arrest for it," said DeAngelo. "And we decided we were gonna open our doors. And we did, and we haven't looked back since. The only way I'll stop doing what I'm doing is if they drag me away in chains. And as soon as they let me out, I'll be back doing it again." After less than a year, the shop was doing $1 million a month in revenue.

In the next room were a half-dozen glassed-over counters where Harborside personnel were describing the various strains of marijuana available to customers. Marijuana's major ingredient, tetrahydrocannabinol, or THC, combines with more than thirty other active agents called cannabinoids. It's not clear how the interaction of THC and cannabinoids affects the user's experience, but THC taken by itself has an effect different from that of marijuana. Different varieties of the plant also have different effects. Cannabis sativa provides a speedy, uplifting high. ("Good for when you want to clean out your garage," said one sales rep.)

Cannabis indica, often recommended for pain relief, knocks you out stone-cold. Most of the pot on sale is a mix of the two, and a young woman behind one counter elaborately explained the benefits of each and whether it had been grown indoors, outdoors, in the shade, or in the open and when in its life cycle it was harvested. "Green Erkle is Purple Erkle picked before it turns purple," she offered. "It's a sativa-indica blend heavier on the sativa, with a nice fruity flavor to it."

For those without a green thumb, the shop offers classes on pot-growing, both indoor and outdoor. Would-be farmers who want a more professional-sounding degree can also enroll at nearby Oaksterdam University.

Continuing the tour, Wedding Dress pressed a finger to an electric scanner, opening the door to a back room. Three men sat in a waiting room with duffel bags full of marijuana. In the next room, two Harborside employees were sorting through the deliveries and negotiating prices with guys who could reasonably be called drug dealers.

* * * * *

Patriotic potheads love to point out that cannabis was grown at Jamestown, that George Washington might have used hashish, and that Thomas Jefferson wrote a draft of the Declaration of Independence on hemp-fiber paper. But recent history offers more compelling reasons that marijuana is a definitively American drug: since the 1930s, it has slotted neatly into the age-old debate over chemically induced pleasure versus chemically induced pain relief. Since the 1990s, it has been at the center of a conflict between states' rights and federal authority; it's considered by advocates and opponents alike to be the most likely of all controlled substances to change the terms of U.S. drug policy.

Of course, the medical-marijuana movement is hardly unprecedented in our national history. During prohibition, congressional hearings were held on "medical beer," a serious effort to get around the law. There has always been some legitimacy to the medical-use argument: alcohol and marijuana can both make people feel better. But there has always been some cynicism. In March 1921, under the scare-quoted headline "Brewers Jubilant Over 'Medical' Beer," the New York Times dryly noted that "one physician in Chicago wrote 7,000 prescriptions for liquor, none for less than a pint, in the course of a few weeks."

Medical marijuana clubs have come a long way since the August day in 1996 when Dennis Peron heard boots pounding up the stairs of his Cannabis Buyers Club in San Francisco's Castro district and thought he was being robbed. His club had been openly selling marijuana to the ill--and, allegedly, the non-ill--since at least 1991. That year, San Francisco voters passed Proposition P, which made enforcement of laws against medical marijuana the city police's lowest priority. Within days of Peron's arrest--which was made with a deliberate lack of assistance from local authorities--four more clubs had opened.

"Repression isn't used to that reaction," suggested DeAngelo. "Repression is used to bringing down the hammer and having a ripple effect. Instead, all they did with Peron was cut off the head, and now the four managers needed somewhere to go. So they started their own clubs."
A few months after Peron's arrest, the voters of California legalized medical marijuana with Proposition 215. The people who had opened the state's first shops quickly found themselves overwhelmed by demand. "The first dispensaries were started by activists, really well-intentioned people who didn't have any business experience, who didn't have any capital, who didn't know how to manage or run a business, who often didn't really know that much about the cannabis business because they were activists, not dealers," said DeAngelo, who proudly keeps detailed accounting records at Harborside. "There were so many patients flocking to them. They found themselves, without even trying to, in the middle of these very lucrative businesses bringing in millions of dollars a year."

In a pattern that would repeat itself in cities across the state, a second wave of entrepreneurs entered the fray. In San Francisco, pot clubs quickly outnumbered McDonald's franchises. Their owners had the same motivation as those of the Golden Arches: profit. Out went the idealism that had helped to police a business illegal on the federal level and quasi-legal on the local level. Though medical marijuana wasn't prohibited anymore, it wasn't regulated or licensed, either, with no central authority controlling zoning, licensing, or consumer protection. And despite the state law, some aggressive law-enforcement officials--including the far-right state attorney general Dan Lungren, who'd ordered the raid against Peron's club--still sought to prosecute dispensaries, citing federal law as justification.

"[The second wave of pot clubs] was started by people, unfortunately, who were more interested in those millions of dollars than they were attracted to doing service for the community or moving the medical-cannabis movement forward," said DeAngelo. "So [their clubs] were opened quickly, often in inappropriate locations. They weren't up to code. They were run by people that had shady backgrounds. And inevitably, problems started occurring. There were robberies, there were neighbors and nearby business that complained. Cars were double-parked. There were shootings. There were not good things happening," he said.

In Oakland in the late nineties, as in San Francisco a few years earlier, federal raids served only to increase the number of cannabis clubs. If a club owner was jailed and his place shuttered, his former staffers often kept themselves employed by opening new clubs. Soon, downtown Oakland was being referred to as "Oaksterdam," host to at least eight pot clubs and a culture of pot smoking. Even some cafes and bars began to allow patrons to smoke on their premises.
Jeff Jones, a longtime medical-marijuana activist, opened a pot club right around the corner from Oakland City Hall--with the full knowledge of those who worked in the building. He was one of those who, like Peron, jumped out ahead of the pack without any legal protection from the state. He told me that he opened his shop in July 1996, five months before the election. City politicians, he says, had been generally supportive but were unsure of what to do next. In March of that year, the city council had set up a task force to study the medical-pot issue and passed a resolution endorsing Jones's club. "'What do you want, another liquor store?'" Jones said he would ask cops and council members whenever they got squeamish.

Local politicos were certain that Prop 215 would fail and that he would then have to close his shop. Indeed, some were actively lobbying against the legislation. Senator Dianne Feinstein, who as mayor of San Francisco had opposed the movement, said that the proposed law was "riddled with loopholes so big that it would have the effect of legalizing marijuana."

She was partly right, but 56 percent of the state didn't care. "They were blown away when we won," Jones said of city officials. "'What do we do now, Jeff?'" Oakland politicians had company in their surprise: eleven days after California passed Prop 215 and Arizona approved its own medical-cannabis law, Clinton drug czar Barry McCaffrey convened a high-level meeting to formulate a response. The opposition had been caught flat-footed. California and Arizona, he vowed, would be the last two states to legalize medical marijuana.

McCaffrey summoned two of the initiative's most vocal opponents, Orange County sheriff Brad Gates and California Narcotic Officers' Association spokesman Tom Gorman, to D.C. to plot how to thwart implementation of the law. (At this same meeting, the participants conjured up the antipot advertising campaign that led to accusations of federally sponsored payola.) McCaffrey announced that the federal government would work hard against doctors and patients involved with medical marijuana, going after the licenses of physicians who recommended it. Doctors sued, arguing that the penalty violated their First Amendment rights, and won a landmark victory.

* * * * *

Since then, medical-cannabis centers have spread across the state of California, and they now represent the single greatest threat to current pot-prohibition policies. In 2003, the California legislature attempted to codify the new industry with the passage of a bill designated--seriously--SB 420. If the clubs remain successful--and, as Harborside's self-image has it, "professional"--they could fundamentally alter America's cultural relationship with drugs. The backers of prohibition know this, and they've dug in against medical marijuana, making it a major target of the drug war.

In McCaffrey's defense, there was little that he could have done to beat Prop 215. The movement had been gaining strength in response to another phenomenon that the federal government had initially ignored: the AIDS epidemic. "Once AIDS came on the scene, [the movement] exploded. That's what put us over the top," said Mykey Barbitta, who runs the Compassion Care Center, a descendant of the Cannabis Buyers Club located at the same spot on Market Street as Peron's clinic. "The medical-cannabis movement was a response to a need, HIV," agreed Randi Webster, founder of the San Francisco Patients Care Collective, who lost more than thirty friends in the early years of the AIDS epidemic. "It started as a treatment for patients with extreme bone disease."

Long before the Reagan administration was taking AIDS seriously, people suffering and dying from it spread the word that marijuana could ease nausea and increase appetite, both crucial to living with the disease. Some early AIDS patients turned to a little-known Food and Drug Administration pilot program that allowed those with legitimate medical need to get marijuana directly from the government. The program dated to 1976, when Washington, D.C. resident and glaucoma patient Robert Randall, using the medical-necessity argument, essentially forced the feds into growing pot on a farm in Mississippi. Today, a handful of surviving patients get a monthly canister containing three hundred prerolled joints.

The Compassionate Investigational New Drug program had very few initial participants. For one thing, marijuana was widely available, cheap, and of increasingly high quality. For another, the nation had a permissive attitude toward the drug, with even President Jimmy Carter calling for decriminalization. There was little incentive for a patient to apply, especially given a built-in disincentive: that your name would now be on a federal list associated with marijuana. That changed with HIV. As AIDS patients discovered pot's palliative effects, cancer patients took notice, too. In 1992, overwhelmed with applications, the feds closed the Investigational New Drug program to new members.

Two years before, the medical-marijuana movement had received a significant public-relations boost in the form of an elderly San Francisco General Hospital volunteer, Mary Jane Rathbun, who'd realized that marijuana eased the suffering of AIDS patients and allowed them to eat. Brownie Mary, as she became known, was arrested and charged with drug distribution for baking pot brownies and giving them to AIDS patients. Rathbun refused to take any plea bargain, demanding a jury trial and creating a media disaster for the district attorney. The charges were dropped, and Brownie Mary was free to help Peron open the Cannabis Buyers Club and advocate for Prop 215.

By the time that Prop 215 made the ballot, the medical-marijuana movement had some real money on its side. George Soros, an eccentric billionaire on a quest to spread freedom across the globe, had met Ethan Nadelman, a drug-policy wonk with an activist streak, in the early nineties. Soros offered to fund Nadelman's effort to reform drug policies and was soon bankrolling a large percentage of the Prop 215 campaign.

Soros's money made a difference, certainly, but without the grassroots movement behind it, the campaign couldn't have been won. By 1996, many Californians knew at least one cancer or AIDS patient who had benefited from using medical marijuana--either on the recommendation of a doctor or not. And if they didn't, they had probably heard of the charismatic septuagenarian who gave free brownies to the terminally ill. Recall that medical-cannabis clubs had opened in San Francisco even before they were legal by state standards, bolstered by the passing of 1991's citywide Proposition P, which urged that doctors "shall not be penalized for or restricted from prescribing hemp preparations for medical purposes." Some local officials, including City Supervisor Harvey Milk and Mayor George Moscone, had openly supported medical cannabis as early as the seventies. Milk's support of Peron even while he was in prison on a separate pot charge enraged the right-wing minority trying to hold back the wave. (In fact, conservative supervisor Dan White was apoplectic about Milk's defense of a convicted criminal, and there's plenty of reason to believe that it contributed to his decision to walk into City Hall in 1978 and assassinate him and Moscone. Moscone's acting mayoral replacement, Feinstein, immediately reversed Moscone and Milk's pro-medical-marijuana policy.) As the clubs began opening post-1996 throughout the Bay Area, as well as in other parts of the state, most cities decided to work with them, and the few Southern California towns that battled the clubs generally lost in court.

But the Clinton administration and California attorney general Lungren, a McCaffrey ally then considered a possible GOP vice presidential candidate, had more political firepower than officials in the conservative rural counties that opposed medical pot. On August 4, 1996, agents carried out the raid on Peron's club in the Castro, seizing computers, 40 pounds of marijuana, and medical records. Lungren, who is now a member of Congress, claimed that Peron had sold pot to an undercover agent for nonmedical reasons. According to Peron, the agent had claimed to be an AIDS patient intent on establishing a dispensary for other sufferers.

The attorney general's claim is noteworthy: Peron was selling to those other than medical patients. Prop 215 wouldn't be voted on for another few months, so at the time, it wasn't legal to sell pot to anyone. Public opinion, however, was such that Lungren knew that he couldn't take Peron down just for selling to patients.

That approach continued, up until Holder's announcement, at the federal level, with the DEAoften claiming that the cannabis-club owners whom it busts had been selling to people other than patients. In 1998, the feds filed suit against and closed down Jones's club, arguing not only that the dispensary had violated the Controlled Substances Act, but also that medical cannabis had not been declared safe by the FDA, making its distribution doubly illegal. The Oakland City Council responded, somewhat desperately, by declaring the club a city agency. The case eventually made it to the Supreme Court, where, in United States v. Oakland Cannabis Buyers Cooperative, justices overturned the Ninth Circuit Court of Appeals and ruled that there's no medical-necessity defense in the war on drugs.

"It is clear from the text of the [Controlled Substances] Act that Congress has made a determination that marijuana has no medical benefits worthy of an exception," wrote Justice Clarence Thomas in the May 14, 2001, decision. "The statute expressly contemplates that many drugs 'have a useful and legitimate medical purpose and are necessary to maintain the health and general welfare of the American people,' but it includes no exception at all for any medical use of marijuana."

Having failed to strip the feds of the authority to raid medical-marijuana clubs, advocates have instead pleaded with them not to exercise it. It's working. In the middle of my interview with Harborside's owners, DeAngelo, looking at his desktop computer, threw his hands up and shouted, "Yes!" Hillary Clinton, campaigning for president in New Hampshire, had just told a video-camera-wielding marijuana-policy activist that, if elected, she would end federal raids on pot clubs in California. That meant that all three leading Democratic candidates--including the ultimate winner--had vowed as president to leave DeAngelo and Wedding Dress alone.

* * * * *

It hasn't been one long, smooth ride. In 2003, Oakland mayor Jerry Brown ordered an investigation of the city's cannabis clubs, hoping to clean them up before, as he had warned Jones, the feds did it for him. City Council president Ignacio De La Fuente went a step further, suggesting that Oakland needed only one medical-cannabis dispensary. The resulting regulation shut down all but a few of the shops and the whiff of pot smoke downtown subsided a bit. But the owners of the closed shops simply headed across the bridge to San Francisco, which was still a regulatory Wild West.

Soon enough, though, San Francisco was following Oakland's lead. In the spring of 2005, the city counted within its limits at least forty-three unregulated dispensaries, one of them in the same building as a center for drug and alcohol rehabilitation. Others were near schools, day-care centers, and other places that neighborhood folks justifiably tend to hold sacrosanct. In June of that year, the city council instituted a six-month moratorium that would allow it to write and review regulations covering the existing clinics. "The absence of laws has allowed adverse opportunities to emerge," Supervisor Ross Mirkarimi, who proposed the ban, said at the time.

The dispensaries were also becoming difficult for the cops to countenance. "It's a huge scam," said Captain Rick Bruce of the San Francisco police, telling the New York Times that dealers were hiding behind the law. "We see guys coming out of these places, and the only description I can come up with is that it looks like a Cheech and Chong movie. They are what you would call your traditional potheads; whether they have a medical condition beyond that is subject to debate."

As municipalities struggled with the details of the reality of medical marijuana, they also joined with activists in the fight against federal intervention. By 2004, another nine states had passed medical-cannabis laws, and the debate in California began to take the turn that the feds feared most. At the time, I was working with the Marijuana Policy Project as a staffer assigned to state-level policy. The organization teamed up with activists in Oakland to help organize and fund the campaign for Measure Z, on behalf of which I did marginal paper-pushing, drafting messages to MPP membership and coordinating with folks on the ground.

Measure Z sought to make enforcement of marijuana laws--all laws, not just those relating to medical marijuana--the lowest priority of local law enforcement. In that ambition, it followed in the path of legislation by several other localities that had done the same. It went a significant step further, however, by declaring that the "City of Oakland shall establish a system to license, tax and regulate cannabis for adult use as soon as possible under California law."

It passed with 65 percent of the vote.

* * * * *

The same week that I toured Harborside, in the summer of 2007, the federal government sent letters to the landlords of about 150 Los Angeles-area dispensaries. The list would eventually expand to more than 300. The letters politely informed the recipients that their tenants were operating illegal drug-manufacturing and -distribution centers, and that if they didn't boot the renters out, the feds would seize their property. L.A. shop owners, recalled Jeff Jones, were petrified, telling him, "'The sky is falling! I have no protection!' Well, what did you think? You never had any protection."

Jones guessed that blatant advertising in alt-weeklies and pot-focused newspapers and on the Internet brought the federal response. Oakland, he said, had been shrewder. "The city hated advertising," he said. "They were fearful of it. They said, 'It's gonna bring the feds out.' They don't want it."

Today, it's much easier to find a pot club in Los Angeles than it is in the Bay Area. In 2007, when there were close to five hundred L.A. clubs, I pushed opened the door to one, prompting the tattooed owner to rush out from behind a Plexiglas wall: "Whoa, whoa! What are you doing?!" I told him I was a reporter covering the crackdown. Predictably, he consented to an interview only if I didn't identify him. "Some of these guys will sell to anybody. Kids, even," he said. "They're going after those kinds." He said that he, by contrast, checks all pot cards, doesn't sell to children, and provides only small amounts of marijuana to each customer. But ultimately, he conceded, he just prays.

Few, if any, medical-marijuana advocates saw the landlord move coming. Tactically, it was brilliant: Landlords, like most Californians, are generally sympathetic when it comes to medical marijuana. But how many are willing to lose property over it? Allison Margolin, a prominent Los Angeles pot lawyer--she calls herself "L.A.'s Dopest Attorney"--said that the landlord letters have led to a significant number of evictions and created a "culture of fear." "But there are still tons of clubs," she added. One club owner took his landlord to court to prevent the eviction and prevailed. His attorney hopes that if the feds now come after the club owner, he can argue that it was a selective prosecution and thus unconstitutional. "It's one of the better ideas I've heard," said Margolin. "I don't know if it'll work, but at least it's an idea."

In the meantime, pot clubs were becoming more and more legitimized in the Golden State. They're even becoming a significant source of above-board state revenue, which bodes well for not only such clubs' long-term survival locally, but also for their viability outside of California.

In the fall of 2006, California clarified to its cannabis dispensaries that they were, in fact, responsible for paying its 7.25 percent sales tax, and had been since 2005. (Depending on the jurisdiction, some clubs are also required to add on a bit for local and county taxes.) Some club owners, backed by ASA, had argued that, as quasi-pharmacies, their businesses were exempt, a line of reasoning dismissed by the state. Others, such as DeAngelo, initially opposed the tax but came to support it, arguing that the perennially underfunded state would get addicted to the tax dollars generated by its one thousand or so pot clubs--a number that will continue to climb absent any major federal intervention.

Harborside is charged an 8.75 percent tax. With revenue of around $1 million per month, its annual sales-tax bill comes in at something like $875,000 per year. And that's just one shop. Betty Yee, chairwoman of the State Board of Equalization, which oversees tax collection, told me that there's no way to break out exactly how much money the state is getting from pot clubs because it doesn't require them to state on their tax forms what product they sell. ("Regardless of legal status, anyone can get a seller's permit," she explained.) However, she did release the tax records of some clubs that had been raided by the federal government, noting that because they employed sizable numbers of people, they also paid state and federal income and payroll taxes. The Compassion Center, licensed by Alameda County, paid $3 million before being shuttered in October 2007 by the DEA. Nature's Medicinal, licensed by Kern Country, paid close to $1 million in 2007, which included $203,000 in state and federal income taxes, $365,000 in payroll taxes, and $427,000 in sales taxes. The Compassion Center employed and provided health benefits to fifty people; Nature's Medicinal twenty-five. (The demise of the latter wasn't universally deplored by the medical-pot community, however: It's alleged affinity for high-powered weaponry didn't jibe with the pacifist vibe the industry espouses.)

It's estimated that between 150,000 and 350,000 Californians have medical-marijuana cards. (There's no comprehensive state list, for obvious reasons.) A 1999 study by Australian economists Kenneth W. Clements and Mert Daryal found that a daily marijuana smoker consumes on average 18.57 ounces of pot annually. They found once-a-week-or-more smokers toke 13 ounces; once-a-monthers inhale 1.7 ounces. (The emphasis must be on the "or-more" in the former case, otherwise those folks were puffing a quarter ounce per sitting.) Let's assume, then, that out of about 200,000 medical-pot smokers, half are daily users. That number yields nearly 2 million ounces of pot. At $400 an ounce, we're talking about nearly $800 million worth of weed. At the lowest sales tax rate, 7.25, that's nearly $60 million. If there are 50,000 occasional smokers, they'd kick in another $20 million. The monthly smokers are worth another $3 million, for a total of more than $80 million. And that's just sales tax. In the case of Nature's Medicinal, sales tax made up 42 percent of total taxes paid, suggesting that the California pot industry would pay total taxes of about $200 million per year. Even if that estimate is wildly overblown, the state is unlikely to give up easily revenue anywhere near that amount: a special notice sent to clubs by the Board of Equalization assured sellers they "may decline to provide information on products sold due to concerns about self-incrimination."

A November 2006 report by the City of Oakland's Measure Z Oversight Committee came up with similar figures. It estimated that Californians consume between $870 million and $2 billion in medical marijuana per year, generating sales-tax revenue between $70 million and $120 million. In 2004, when Oakland's clubs were thriving, it took in, according to city records, $2.3 million in taxes on more than $26 million in revenue. As the feds swept through, that dropped, in 2006, to just $477,000 in taxes on $5.5 million in revenue. Two million dollars pulled from an annual city budget of about $900 million isn't exactly spare change.
NORML and ASA estimate that medical users make up about 10 percent of California's pot smokers. But given the laundry list of conditions that qualify someone as a legit patient, it's safe to assume that we're looking at a serious growth industry here. If the system eventually encompassed all of California's pot smokers, the tax revenue would be in the range of $2 billion. As the movement evolves into an industry, the feds will find it increasingly difficult to roll it back.

The pro-pot folks found out just what power entrenched industries can wield in 2008. Drug-policy reformers campaigned on behalf of a ballot initiative that would reduce marijuana-possession charges to small infractions and divert other drug offenders into treatment instead of prison. It had the backing of the California Nurses Association, California Society of Addiction Medicine and the California Academy of Family Physicians. But it had stronger opponents. The California State Sheriff's Association, the California Narcotics Officers Association, the California Peace Officers Association and the Police Chiefs of California, all lined up against it. In 2007, the state declared its overcrowded prison system to be in a state of emergency. But one prison-industry group didn't quite see the urgency. California's prison guards union spent some two million dollars fighting the proposition. It went down sixty to forty.

California's fiscal situation is becoming increasingly unstable, with towns, counties, and even the state teetering on the brink of bankruptcy. Maintaining the bursting prison system may be a luxury unaffordable in tough economic times. Extra tax revenue, too, is nice in good times. During bad times, it's an absolute necessity. And the nation is due for some bad times. "We're headed for the wall at lightning speed," former Treasury Secretary Paul O'Neill put it in December 2008, as the U.S. economy reeled. The movement to repeal Prohibition was given a major boost by the economic collapse of the late twenties and early thirties. Legalizing booze would create tax revenue and jobs, the argument went then. Today, as we head for the wall, opponents of the drug war make the same case, citing the billions in tax revenue and economic growth that could be generated by legalization.

* * * * *

The advent of the medical-marijuana industry is a crucial development in the medical-marijuana movement. But the industry's activist roots are what keep it from toppling under the weight of federal pressure. Marijuana might be good business, pro-cannabis do-gooders suggest, but it does actually help sick and dying people.

The San Francisco Patients Care Collective, founded in 1999, has a lineage stretching all the way back to Peron and Brownie Mary. It's an emphatically noncommercial venture, according to its owner, Randi Webster. "I want no mercantile terms associated with me. We don't 'buy' our supply; we 'get' it," she said, wearing a purple velvet dress, thick glasses, and a crown of pot leaves. "'Club' is like the N-word. We prefer 'facility.'"

A look around her facility confirmed that she's not profit-hungry: the clients all appeared to be in serious need of medical treatment with little ability to pay for it--no fakers here. The collective also serves as a community center. There's a small stage for open-mic night, and bingo night is also popular, said Webster. Peron's spot, which has gone through a series of names as it survived bust after bust, maintains an activist feel, too. It offers a free joint to patients with no money, free Internet access, and free video games on a flat-screen TV. A framed letter on the wall thanks the club for what it does for patients and the community. The writer thanks Peron for an offer of a tour, saying that she hopes to make it one day. Signed, Nancy Pelosi.

By about 2010, if the pace keeps up, more than half of the American population will live in states where it's legal to smoke pot for medical purposes--which in California means for the relief of not only glaucoma, AIDS, and cancer, but also of irritable bowel syndrome, insomnia, and that infinitely flexible catch-all, "etc." Although some states originally limited medical marijuana to specific ailments, these have gradually expanded access under pressure from patients not covered by the law.

The federal government, it would seem, is up against the tide of public opinion. Nearly half of Americans polled now say that marijuana should be taxed and regulated much like alcohol. Solid majorities--from two-thirds to three-quarters--support medical marijuana. Liberals, especially the young ones who run the blogosphere, don't have the same fear of being called soft on crime that dogged their Clinton-era predecessors, and they have embraced drug-policy reform as a defining issue. Meanwhile, the religious right that helped elect George W. Bush to the presidency has become disillusioned with his administration's moral failings and once again begun to fade from politics. As it has done so, it has taken its calls for temperance legislation with it, leaving the libertarian wing of the Republican party ascendant. The feds' fear is that, if they lose ground now, they won't ever regain it. (Which, if they knew their history, they would know isn't true.)

With that in mind, the President Bush's drug czar routinely called out the medical-marijuana movement as a fraud, an attempt to legalize drugs using sick and dying people as a cover. He reiterated that take in a discussion that the White House posted online in December 2007. "Funded by millions of dollars from those whose goal it is to legalize marijuana outright, marijuana lobbyists have been deployed to Capitol Hill and to States across the Nation to employ their favored tactic of using Americans' natural compassion for the sick to garner support for a far different agenda," he said. "These modern-day snake oil proponents cite testimonials--not science--that smoked marijuana helps patients suffering from AIDS, cancer, and other painful diseases 'feel better.' While smoking marijuana may allow patients to temporarily feel better, the medical community makes an important distinction between inebriation and the controlled delivery of pure pharmaceutical medication. If you want to learn more about this, we have information available that shows how medical marijuana laws increase drug-related crime and protect drug dealers."

Wedding Dress, of course, has a different way of describing what he's up to. "I still believe that our intention and what we're doing in the world is actually insulating us," he said, adding that Harborside's legit relationship with the city also helps. He offers Hope Net, a club that San Francisco police protected from the federal government, as a demonstration of the connection that a responsible pot clinic can forge with local officials. "That dispensary is still open and functioning," he said, "and no one was charged."

Not yet, at least. "I'm not as optimistic as my partner in terms of the federal threat," DeAngelo said. "The federal strategy is very difficult to read, and we don't know where they're going to hit next. Anybody who opens a dispensary has to be ready to go to federal prison."

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