Tests for California's 'pot economy'

Sitting on a sofa in the gymnasium-sized Quonset hut of the New Liberty Bell Temple, Daniel Reynolds puts his lips to a plastic cone and breathes in marijuana vapor.

The vapor contains the active substance in cannabis that Mr. Reynolds, a cancer patient, says "eases his pain."

The vast room also hosts a pool table, ping-pong table, video-game monitor, and a stage for live music. In the back, a cubicle displays Mason jars filled with green, leafy clumps. Customers pay between $25 and $55 per one-eighth of an ounce for different strains of marijuana, marked "Humboldt Gold," "Black Africa," "Banana OG," and "NY Diesel."

Los Angeles's pot economy is booming. The number of medical-marijuana dispensaries here has skyrocketed from 183 in 2007 to about 800 now. In this period, pot shops have morphed from what Reynolds calls "hidden, remote places with no signs or addresses" into listed and public outlets. Many sport 10-foot signboards in the shape of a marijuana leaf.

But as dispensaries have sprouted across this and other California cities, they face pushback from local residents unhappy with their new neighbors and officials concerned about inadequate oversight of a novel business. Sacramento and Santa Cruz are considering moratoriums on new dispensaries as they review regulation. In L.A., complaints about robberies and drug abuse at the clinics prompted the city council to shut down several hundred dispensaries over the past few months.

Many of them had opened in spite of a moratorium on new dispensaries because of a legal loophole that allowed them to operate pending an application for exemption. On June 16, the city council enacted a measure to eliminate this exemption.

"This is about the health and safety of those who need marijuana dispensaries to treat conditions including HIV, glaucoma, and cancer," said Councilman Ed Reyes, who sponsored the measure. "This is also about the health and safety of our communities to protect them from nuisance operations."

Medical marijuana was legalized in California with a 1996 state ballot initiative that made marijuana available by prescription to relieve pain or nausea.

Federal law prohibits the use and sale of marijuana even for medical purposes, and that seems unlikely to change soon. Nationwide, about 775,000 people were arrested for marijuana possession in 2007. However, the Obama administration ended raids in states that have legalized medical marijuana – one reason for the recent growth in dispensaries in California.

In 2007, the Los Angeles Police Department (LAPD) expressed concern about the rising number of medical pot sellers and called for a moratorium pending new regulation. The absence of specific zoning rules, officials pointed out, had resulted in a dozen dispensaries opening within 1,000 feet of schools. One dispensary had slipped fliers on the windshields of cars parked outside a high school, the LAPD said.

The dispensaries are "targets for people who want to come in and rob," says Lt. Paul Torrence of the LAPD's Gang and Narcotics Division, "because they know there is lots of cash around and security is limited because they like to keep a low profile."

On their part, dispensaries including the Rastafarian New Liberty Bell Temple counter that they are unnecessarily harassed on trumped-up complaints.

Some neighbors have also questioned whether some of the young and apparently healthy people they see walking into the dispensaries or lighting up outside them are really ill. Lieutenant Torrence echoes this concern. "[T]his is a way for people to grow medical marijuana and make serious money," he says.

Still, polls show American public attitudes toward marijuana have changed over time. In 1979, just 27 percent of Americans favored legalization of marijuana, according to a a CBS/New York Times poll. In a July 13, 2009, CBS poll, that figure had gone up to 41 percent.

"Five years ago, my mom would have been openly hostile to my smoking marijuana," says Reynolds, the customer at New Liberty Bell Temple and a registered process server. But at a recent lunch, she asked him if he had considered getting a marijuana prescription to help with his cancer.

Despite "the huge public support, politicians are worried about their political liability amongst both colleagues and voters," says Paul Armentano, deputy director of the National Organization to Reform Marijuana Laws. He notes that 13 states have medical marijuana laws exempting patients from arrest and criminal prosecution, but only three – Hawaii, Rhode Island, and Vermont – enacted the laws through the legislature.

More states will legalize medical marijuana, say many observers. Nudging the issue forward are budget-crunched states such as California, which could take in as much as $1.2 billion annually from taxing marijuana sales. An April Field Poll showed that 56 percent of California residents favor taxing and regulating marijuana.

Oakland became the first city in the nation to tax marijuana last week when voters voted "yes" to such a tax.

"[T]he culture is changing, and it's not considered the evil weed once portrayed in movies like 'Reefer Madness,' " says Robert Pugsley, a specialist in marijuana legislation at Southwestern School of Law in L.A. "The state will want to tax it and regulate it as a product like cigarettes and get revenue out of it. Maybe even cities would add their own surcharges," he adds.