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When Weed is Legal 

Taxed, regulated marijuana sales might help save the state's economy, but will it ruin ours?

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When Weed is Legal
When Weed is Legal When Weed is Legal When Weed is Legal

When Weed is Legal

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Pardon the use of Bob Dylan's chorus-cum-cliché, but it's the truth: The times they are a-changin'. A year ago, if you'd told even the most sanguine of Redwood Park stoners that the state legislature would be considering a bill to legalize marijuana -- actually considering it -- and that op-eds in newspapers from the Sacramento Bee to the San Francisco Chronicle to the Times-Standard would be rooting for the thing, chances are they'd have coughed smoke through their noses: "What are you, high?"

Yet here we are. In the White House we have a man who, while pointedly not advocating full legalization, openly admits he inhaled and who said in 2004 that the war on drugs had been an "utter failure" and that pot should be decriminalized. In February, Attorney General Eric Holder announced that the Justice Department will no longer raid medical marijuana dispensaries that follow state laws -- a sharp departure from the Bush administration's zero-tolerance policy. Just last week, Secretary of State Hillary Clinton also called U.S. drug policies a failure, saying they've contributed to the escalation of violence in Mexico, which is now seeping into the U.S. Recent polls show, ahem, growing support for legalization, including a majority in favor in the western U.S. And with California more broke than a panhandling Plazoid, taxing the grass is starting to look a lot greener. It's all coalesced into what the state office of NORML (the National Organization for Reform of Marijuana Laws) somewhat callously calls "a perfect storm of recent events" boosting legalization efforts.

Under San Francisco Assemblyman Tom Ammiano's bill (AB 390, the Marijuana Control, Regulation and Education Act) cannabis would be legal ... but not 100 percent legal, to paraphrase Vincent Vega. As with alcohol, pot could be sold to anyone in California over the age of 21. But no smoking it in public; no growing it in public view; and keep it away from schools. Wholesalers would have to pony up $5,000 initially and $2,500 per year for distribution rights. Retail outlets would be charged a $50 fee per ounce of cannabis (which no doubt would be passed along to the consumer, translating to about a buck per joint) to fund statewide drug education programs. The bill would not alter California's medical marijuana law, ushered in by the 1996 Compassionate Use Act (Prop. 215), which allows patients, caregivers and collectives to grow their medicine.

For many AB 390 advocates, it's all about the Benjamins. According to estimates from the state Board of Equalization, legalization could generate more than $1.3 billion per year from marijuana sales -- about $990 million from retailer fees and $349 million from sales taxes. A paper by Harvard economist Dr. Jeffrey Miron argues that legalized marijuana would generate between $10 and $14 billion in economic bennies to the state courtesy of increased business and payroll tax revenues and spin-off businesses like those in the wine industry. "Last but not least," says California NORML on its Web site, "the bill would save the state $170 million [annually] in costs for arrest, prosecution and imprisonment of marijuana offenders." Legal weed, the group claims, would put an end to black market dealers and smugglers, pirate gardeners harvesting diesel dope in our State Parks, even the inept amateurs in their combustible grow houses. In short, it would be all good, brah.

Or would it? Not everyone agrees with this blissed-out vision, this notion that legalization will create an economical, Jeff Spicoli Valhalla. Some of the fiercest critics are right here in Humboldt County, a land synonymous with the dankest of chronic. While many Humboldters sport "Legalize It" bumper stickers on their French-fry-powered Volvos, many others, including medical marijuana advocates, economists and some of the stoniest of stoners, say legalization would be bad for us, putting them in unlikely alliance with drug war hard-liners and "slippery slope" moralists.

AB 390, which isn't scheduled to be heard until early next year, faces an uphill battle. Assemblyman Ammiano, in an interview with Salon.com, characterized his fellow legislators' response to the bill this way: "[A] lot of [my] colleagues...say: 'Oh my God, I think this is great, but I don't think I can vote for it.'" Last week, Obama reiterated his stance against legalization.

The prevailing trend in public attitude, however, suggests that weed will be legalized, or at least decriminalized, in the not-too-distant future, which raises a variety of questions. How will it affect our local economy, safety and public health? Where will it leave medical dispensaries? What will it mean for the countless local residents who make money growing cannabis in their closets and backyards, or in the sunny fields near Willow Creek and Weaverville?

^^^^^

J.D. lives with his fiancée and their two dogs in a well-kept, nondescript tract home on a quiet, nondescript Eureka side street. Inside, the house looks typical of a young couple starting out in life: Evidence of a recently prepared meal sits on an island in the kitchen. Framed movie posters line the walls. A Nerf-style basketball hoop is mounted above the hallway that leads back to the bedrooms. The only hint of indulgence sits in the sunken, carpeted living room: a 62-inch television sprouting the tentacular cords of an X-Box 360 and flanked by a pair of sentinel-like home stereo speakers.

Sitting deep in a cushy living-room couch, J.D. (not his real name) fires up a neatly rolled blunt while explaining how he came to be a marijuana grower and dealer. In a way, he says with more than a hint of amusement, his illicit lifestyle can be blamed on former President George W. Bush. See, after growing up in the Midwest, J.D. had lined up a job through Americorps teaching outdoor education at the Manila Community Center. "I was in the process of getting ready to move out here [when] I got a letter from the government that said G.W. had cut the funding for the program and I wouldn't have a job," J.D. says.

Lacking a backup plan, he moved anyway, found a place to live in Arcata and a minimum-wage job. "Like a lot of other people who come out here, you just meet people," he says, exhaling thick tendrils of smoke. "And eventually you meet people that grow weed." He and his roommates were enlisted by one such person to raise cannabis plants through their vegetative stage and then sell them to another guy who had a flowering room. "That was kind of the foot in the door," J.D. says.

Eventually, he and a friend decided to pool their resources and start a grow of their own -- a little three-light operation in the attic. They bought some Organic Grow fertilizer at a local grow shop, studied Jorge Cervantes' book Marijuana Horticulture (known by growers simply as "the Bible") and nurtured their plants carefully. "Our first round -- it was like a new puppy," J.D. recalls fondly. "I would go in there whether there was anything I could possibly do or not. I would just go sit in there and stare at my plants and hope I was gonna see 'em grow or somethin'." Grow they did. J.D. and his friend harvested about a pound of high-quality weed per thousand-watt light in their first run, "which we were pretty stoked about," he says.

Fast-forward five years. He and his fiancée have been in their current house for about two-and-a-half years now. They built a grow room inside their garage -- a 10-by-10-foot climate-controlled plywood and timber structure, the floor of which is currently crammed with 175 plants in their young, vegetative state. These are the new recruits, having recently replaced a crop of mature, budding cannabis plants, and they're still relatively small. The tallest -- of the famous O.G. Kush variety -- stand about two-and-a-half feet high. Other varieties in the room are called Master Kush, Athena and L.A. Confidential -- all designer hybrids carefully bred for quality, potency and flavor.

J.D.'s fiancée apologizes for the plants' immature appearance like a typical housewife might beg pardon for a messy guest room. But, legal and moral judgments aside, the space is beautiful. Beneath 9,000 watts of blinding grow-lights (made even brighter by reflective Mylar on the walls) the papery, finger-like cannabis leaves glow a vibrant Kelly green. Seven mounted wall fans circulate oxygen-rich, mineral-tinged air, filling the room with white noise and vibrating the canopy of spindly foliage, which reaches hungrily upward under a massive, insulated ceiling duct.

J.D. nurtures the plants with essential nutrients, additives and blossom-builders, he explains, using Neem oil as a pesticide. He did all the wiring and construction himself and can't quite fathom how so many growers manage to burn their houses down. "I spent, like, four hours on the Internet reading about electricity and insulation and that kind of thing, and did it myself," he says. "It really is not that difficult. I think the problem is a lot of people try to splice into [an electrical] line to try to be covert." J.D.'s landlord recently thanked him and his fiancée for being such steady tenants, always paying their rent on time, though his lofty opinion might change if he discovered J.D.'s garage modifications.

J.D. sells his product in bulk -- generally to just one or two people. The lowest he'll accept for a pound of cannabis is $3,200, though he aims for $3,400 and won't take less than $3,500 for Kush. He also won't deal in smaller increments -- no pushing dime bags and joints on the Plaza. "I was never a drug dealer before this," he says. "I never sold weed in high school. I didn't do any of that kinda shit, you know, and I have no desire to do that [now]." He estimates his gross annual income to be about $150,000, though his fiancée, who does their finances, says most of that goes right back out again for overhead. They expect that income/expense ratio to change soon, however. J.D. and another friend are in the process of building an outdoor garden in Burnt Ranch, which should yield greater rewards. Some of his income gets funneled through a fake business (on which he does pay taxes), but most of it is kept off the books.

When asked about legalization, J.D. says he's pretty satisfied with the way things are now. "I mean, I have my 215s [medical marijuana identification cards] covered as far as keeping me in legal parameters, and I don't really give anyone a reason to suspect me of anything, or try not to." Sure, he says, it would be nice to claim the thousands he spends on electricity and nutrients on his taxes, and he wouldn't mind keeping his money in a bank account. "Being able to live like an ordinary person would be awesome," J.D. says. "But at the same time, there's all kinds of things [in a legalized world] that would take away business from me. ...I mean, obviously, if it's legalized it's gonna become more corporate; it's gonna become larger scale and extremely, readily available."

^^^^^

Such has long been the position of many growers, head shop proprietors and amateur wonks. The fear is that, if marijuana were legal, major cigarette companies would take over the industry, converting tobacco fields to cannabis and flooding the market with cheap industrial weed, thereby squeezing out the garden-variety Humboldt growers. "That's why I always laugh when people say, 'Oh, we want to legalize marijuana,'" HSU Economics Professor Thomas Bruner told the Journal in 2006. "That's fine, if you want to do that," he said, "but I wonder if you understand that it's going to cost us about $200 million."

The size of Humboldt County's marijuana economy has long been subject to debate. "Three hundred million is generally the conservative estimate," Bruner told the Journal earlier this week. "Firefighters, apartment manager -- people who see it all the time usually put it at more like $500 million." When marijuana is legal, he said, "then Humboldt County is in big trouble." So what that we're currently one of the leading producers of cannabis in the country? "They call it a weed, right?" Bruner said. "It's not that difficult to grow." The real challenges would be packaging, distribution and advertising -- all things that Big Tobacco companies like Reynolds American and Altria Group already have figured out. "I'd bet you, bottom dollar, all those companies already have a plan," Bruner said.

Bruner's colleague, Dr. Steve Hackett, agrees with Assemblyman Ammiano's assertions that a legal, regulated and taxed cannabis market would likely help the fiscal health of the state government. Humboldt County, on the other hand, is a different story. "While sales quantity might increase, commercial high-volume production (both here and elsewhere in the state) would also depress prices," Dr. Hackett wrote last week in an e-mail to the Journal. Some have argued that Humboldt could become to weed what Napa Valley is to wine -- a playground for distinguishing (read: wealthy) connoisseurs. But Hackett (rather academically) argued, "It isn't clear whether a large enough boutique high-quality market based on a Humboldt terroir would emerge to offset the adverse price effects of mass production methods, as it has for wine grapes." Bruner put more bluntly: "So I'm Marlboro," he said. "I'll just sell Humboldt [brand] cigarettes."

Dennis Turner, director of medical marijuana dispensary The Humboldt Cooperative (THC, get it?) was reluctant to reveal his opinion of legalization during a phone conversation last week, though he did allude to mysterious behind-the-scenes activities in the grower community. "I'm doing everything I can to try to head that off," he said when asked about AB 390. Head what off, exactly? "The destruction of our economy," he responded. Turner is well aware of the threat posed by Big Tobacco, and though he wouldn't discuss specifics, he explained surreptitiously, "We [in the 215 community] are working on organizing all growers in the tri-county area [Humboldt, Mendocino and Trinity] under one buying and selling block." The way to survive, he said, is to organize. "That's what it's all about: To step up we have to be able to compete with big business." So Turner is seeing to it that the Emerald Triangle is not caught with its pants down. "We're already on it," he declared, like a seasoned officer reassuring a nervous cadet. "Been on it for months."

Humboldt County District Attorney Paul Gallegos, who has long advocated legalization, said in a phone conversation last week that the war on drugs inflates the cost of marijuana by decreasing supply while doing nothing to abate demand. "For me," he said, "reducing homicide and ancillary crime is a greater priority. [But] if they legalize it, they need to regulate it. ...Regulate it, control it and [focus on] education, education, education." Humboldt County guidelines allow documented medical marijuana patients to produce up to three pounds of dried cannabis per year in a space no larger than 100 square feet -- a more lenient threshold than the state's limit of eight ounces of dried weed and six mature or 12 immature plants at any given time. Arcata recently enacted stricter limits (50 square feet and no more than 1,200 watts of lighting for residential grows; 1,500 square feet and no more than 25 percent of the total floor space for dispensaries). Eureka is considering similar measures.

Of course, all marijuana is technically still illegal under Federal law. (Remember the cartoonishly massive "Operation Southern Sweep" raid last year?) And California's 215 laws are vague and confusing to many patients, with enforcement varying from one jurisdiction to another. Mariellen Jurkovich, director of the Humboldt Patient Resource Center, a medical cannabis clinic in Arcata, said she's leery of the current legalization efforts because, under AB 390, cannabis would be lumped in with other "vice" products like cigarettes and alcohol, and also because she finds the financial motives dubious. "Why would we want to throw a wonderful medicinal plant in with alcohol and cigarettes?" she asked. Jurkovich tries to stay out of recreational weed issues but said the state should figure out how to enforce medical marijuana laws before taking on total legalization. Many of her co-op's patients have had their medicine confiscated by Eureka police officers, she said, despite carrying 215 cards.

Eric Heimstadt, who owns another Arcata dispensary -- Humboldt Medical Supply, LLC -- said there would be repercussions to legalization that few people have considered. He, for one, does not believe Big Tobacco's presence would depress marijuana's market value, simply because major corporations can be counted on to keep prices as high as the market will bear. The real risks to small-time growers, he said, will be the host of regulations that will accompany legal production. "You'll be dealing with zoning laws, Health and Safety [codes], the IRS, the Ag Bureau, USDA, FDA. One dog walking through a drying or cooling room spreads thousands of E. coli bacteria just wagging its tail," he said. All the rinky-dink hippy growers would need to become licensed employers, documenting their labor practices, filing paperwork for all their trimmers, establishing sanitary, dedicated work spaces -- the list goes on. "That's something none of the activists have thought of," he said. "We can beat [Big Tobacco's] prices, but can we beat their code compliance?"

^^^^^

The state Board of Equalization disagrees with Heimstadt's economic analysis, concluding that legalizing marijuana would drop its street value by 50 percent. Bruner thinks it would go even lower -- down to maybe a quarter of what it costs now. The BOE also estimates that consumption of pot would increase by 40 percent. (For the record, BOE Chair Betty Yee is supporting the bill.) Advocacy groups dispute that latter figure, but regardless, the potential increase in usage has been -- and will continue to be -- the source of most opposition to the bill, which includes law enforcement groups like the California Peace Officers' Association, the California Police Chiefs Association and the California Narcotic Officers' Association.

Enforcement and prosecution of marijuana-related laws account for a sizable portion of law enforcement time, money and effort on both the state and local levels. During the 2007/08 fiscal year, the Humboldt County marijuana task force referred 384 cases for prosecution, of which 37 resulted in felony convictions. Eighty-three people served jail time while just three were sentenced to prison terms, with an average stay of one year. Statewide, California reported 16,124 felony and 57,995 misdemeanor arrests linked to marijuana in 2007, according to the Sacramento Bee. (The ’08 stats aren't out yet.) The multi-agency Campaign Against Marijuana Planting (CAMP) seized a record 2.9 million plants that same year according to data from the state Criminal Justice Statistics Center. Depending on your perspective, these large numbers either represent victories in enforcement or evidence that we're losing the war on drugs.

Many Californians oppose AB 390 on moral and social grounds, saying the resultant increase in consumption would lead to more marijuana-related accidents, illness and, of course, the trademark laziness. Marijuana has long been vilified as a "gateway drug," leading impressionable users to try more harmful drugs like methamphetamine or heroin. Some even cite controversial studies that link marijuana use with serious mental disorders including psychosis and schizophrenia. (Critics of these studies, meanwhile, say that's a cause-and-effect fallacy -- that people who suffer from these disorders tend to self-medicate with marijuana.) Even some proponents of legalization -- District Attorney Gallegos, for example -- decry the physiological effects of smoking cannabis.

"I'm not advocating the lifestyle," Gallegos said. "Far from it. I have kids. And it's not because [I think] it's a gateway drug or [users] will go out a rape someone. But it dissipates motivation," he said. "You've seen people -- they give up everything."

^^^^^

J.D. stands in the corridor between his grow room and his house, eying his crop. He walks into the luminous cubicle and, stooping down, plucks a browned leaf from one of the plants and tosses it to the floor. There's a lot to be done this week. Some of the plants he ordered for the Burnt Ranch grow can reach heights up to 10 feet, so he and his friend have been extending the perimeter fence on the property. Plus, the soil out there is damp and compacted; it needs amendments and aeration before seeds can be planted. He's been working about 45 hours per week lately, he says. "And that's hours I'm actually working. ... A lot of people go punch in eight hours and don't work nearly that much." If he sounds defensive it's because friends often poke fun at him, saying he doesn't have a real job. Which is something he worries about only when he thinks his profession might become legal.

"For legalization, unless I was involved in some kind of co-op, I probably wouldn't survive as a grower," J.D. says. "But on the other side, if it's a legal industry, based on the knowledge that I have -- being an independent grower for the past five-and-a-half years -- there's gonna be an entire industry, and I could probably get a pretty decent legitimate job." He smiles at the thought. "I could become a nine-to-fiver, you know? Working for Salem in their weed department."

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About The Author

Ryan Burns

Ryan Burns

Bio:
Ryan Burns worked for the Journal from 2008 to 2013, covering a diverse mix of North Coast subjects, from education, politics and marijuana to human suspension, sex parties and amateur fight contests. He won awards for investigative reporting, feature stories and news coverage.

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