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Fuming Over Pot Clubs

By Annie Gausn | Jun. 2, 2006
News

Law Office Management

Jun. 2, 2006

Fuming Over Pot Clubs

Voters approved Prop. 215--the medical marihuana initiative--ten years ago amid great optimism by its backers. But the closure of a marijuana boutique in an upscale San Francisco neighborhood reflects a growing disillusionment with the law.

By Laura McClure
     
      The ouster of a popular medical marijuana dispensary by its San Francisco neighbors signals growing disillusionment with the medical marijuana initiative.
     
      The unmistakable scent of burning marijuana lingered on the front steps of San Francisco's City Hall one cool night last September. Inside, more than 75 citizens murmured and jostled their way into the Board of Appeals chambers, there to decide the fate of the most popular medical marijuana dispensary in the city. At issue was the Green Cross-by all accounts a model pot club-which had operated for a little more than a year at the outer edge of the liberal, dog-and-stroller neighborhood of Noe Valley. Now, it appeared that the dispensary on 22nd Street had worn out its welcome. Although in 1996 the neighbors voted overwhelmingly in favor of Proposition 215, the statewide initiative that legalized medical marijuana, the Green Cross-like the city's other 30-plus pot clubs-wasn't exactly the result they had envisioned. (Known as the Compassionate Use Act, Prop. 215 allows patients and their caregivers to possess and cultivate marijuana for personal medical treatment upon a physician's recommendation. It also protects such doctors from professional and legal sanctions.)
     
      As the meeting got under way, the owner of the club, a nattily dressed young man named Kevin Reed, sat quietly in the back of the room-far from the woman wearing a plastic pot-leaf tiara in the second row and the man in sunglasses with a guide dog that growled once, softly, when a stranger leaned over to pet it. Scattered throughout the crowd were a nun, several gray-haired teachers, and a bevy of young parents-most members of Noe Valley's Fair Oaks neighborhood association. One by one, the neighbors stood up at the microphone, said that they voted for Prop. 215 in 1996-and then complained of increased traffic, noise, and crime. "Have you ever sat outside and watched a beehive on a nice summer day?" asked one neighbor, a retired nurse. "And watched the bees go in and out, in and out, all day? Well, that's what happens down there." A mother of three concurred. "It is an unfortunate fact that a percentage of Green Cross patrons are criminals whose only intention is to resell marijuana. It is also an unfortunate fact that criminals carry weapons," she said. A third resident urged, "Although I voted for Prop. 215 like all my friends and neighbors, I request that you either revoke the Green Cross permit or move it out of the neighborhood." They were followed by patients speaking on behalf of the Green Cross, some of whom were also neighbors. "The Green Cross gives me the safest place to go," said a former police officer and mother of two. Added a middle-aged Montessori teacher: "It's not like we can go to Walgreens and say, 'Hey, we want generic.' "
     
      For four hours it went back and forth. Should San Francisco's Board of Appeals, which handles permit disputes, force a legally permitted, state taxpaying, nonprofit dispensary to move? "You have a tough job in front of you," Lawrence Badiner, zoning administrator for the San Francisco Planning Department, told the board. "Kevin Reed is either the devil incarnate or an angel sent from above." The board's vice president, Randall Knox, also weighed in. "Prop. 215 was supposed to be the entree to how we allow this herb to be used as a medicine," he said. "But I think it would be disingenuous if I were to say that most of the marijuana used in this city and in this nation is used for medicinal purposes." Through it all Reed said little, except to add wearily, "I think most of the neighbors know I really have given a good faith effort." In the end, the board members voted to impose 33 new conditions to the permit and gave the Green Cross six months to find another home.
     
      It wasn't supposed to turn out this way, with neighborhood warfare over medical pot. When Prop. 215 came before the voters ten years ago, its stated purpose was to allow seriously ill Californians with cancer, AIDS, glaucoma, chronic pain, migraines, or "any other illness for which marijuana provides relief" to legally grow or possess marijuana if a doctor recommended it, primarily for the treatment of nausea or pain. (How a patient might come to possess marijuana was left largely unspecified, though the Act did encourage federal and state governments to provide "safe and affordable distribution.") In a city whose large gay population had been decimated by AIDS, it wasn't surprising that 78 percent of the voters (compared with 56 percent statewide) focused more on how they hoped the measure would help the terminally ill than on its fuzzy legal parameters. "I think we can be a model for the whole state," San Francisco District Attorney Terence Hallinan told the Los Angeles Times a month after Prop. 215 passed. A decade later, San Francisco contains more pot clubs within its 46.7 square miles than any other city in California. Figures vary widely (no state agency tracks the numbers), but there may be as many as 200 in the state. "Now either San Francisco has a lot of sick people," says Martin Halloran, a sergeant with the narcotics division of the San Francisco Police Department, "or this has gotten out of hand." More than 8,000 people have medical marijuana cards in San Francisco alone; doctors who specialize in medical marijuana recommendations take out ads in the back of alternative weeklies (one with the memorable phone number 1-888-POTDOCS). Meanwhile, 20 cities have banned dispensaries altogether. Cities that haven't addressed regulation issues are seeing an influx of clubs, and many of the same people who voted for the ballot initiative are growing disillusioned with its consequences.
     
      Part of the problem is nomenclature: Pot club just isn't a term that evokes white coats and pharmacies. And even though state law requires California dispensaries to operate as nonprofits, their proprietors often refer to them as "companies" and use phrases such as "moving product" that can make even their supporters uneasy. But many of the objections stem from the mistaken expectation that medical marijuana would be dispensed, like Vicodin, by licensed pharmacists in retail stores. "I thought it would be in Walgreens," is a common statement among the disillusioned, although drug policy experts say this view is hopelessly naive. After all, under the federal Controlled Substances Act of 1970 (21 U.S.C. §§801971), marijuana, like heroin, is a Schedule I drug with no accepted medical use-illegal in every state. Until that changes, no national pharmacy is likely to get into the marijuana business; California's patchwork quilt of local regulations is a response to that basic fact. "Would I vote for it again, [knowing what I know now]?" ponders Green Cross neighbor Marvin Edwards. "If it turns out like I'm seeing it, I don't think so."
     
      When the Green Cross first opened its doors almost two years ago, just two blocks from my house, it generated little controversy. But like local views about medical marijuana itself, a lot has changed at the dispensary since then. I've followed the fortunes of the Green Cross since its beginning, and though I live nearby, I never joined the neighborhood association in calling for its ouster. In fact, I actually enjoyed pointing the club out to people as evidence that my tree-lined, Victorian-studded patch of San Francisco was less staid than it seemed.
      When the store appeared in July 2004, at a corner known for its biannually reincarnated restaurants and short-lived clothing boutiques, no one really noticed. With no sign and little else to indicate what it was, the Green Cross quietly operated under the radar for about six months. In January 2005 I described it in San Francisco magazine as the first upscale medical marijuana dispensary in the city. Kevin Reed, the owner, had as his lofty goal changing the image of medical marijuana outlets from one of seedy clubs to safe, inviting boutiques anyone would be comfortable having around. Considering that my neighborhood is even more overwhelmingly promedical marijuana than the rest of San Francisco (in 1996, Prop. 215 received a "yes" vote from 88 percent of Noe Valley voters), it should have been a comfortable fit. Then came the sign above the door-a neon green cross-and the pot plant growing in the window. Customers began showing up in droves, not all of whom looked like the young professionals going into the restaurants nearby. That's when the complaints of noise, smells, and "unsavory" characters began.
     
      Of course, if you are a patient, none of that matters; what was inside the store was worth it all.
     
      I made an early March visit. Once past the security guard checking medical cannabis cards at the door, the Green Cross seemed like a hip place to be ill. Upbeat electronica bounced off lipstick-red walls, a plasma-screen TV showed music videos, and a clock above the display counter read "424ever"-a reference to 420, old-school pot lingo for "time to smoke" and a generic code word for pot. A whiteboard on the wall listed the prices for cannabis by weight: 1.75 g = 1/16 = $20, 3.5 g = 1/8 = $40, 28.5 g = 1 oz = $300. (One ounce was the limit a patient could purchase per visit; customers could pay by Visa or MasterCard if they liked.) Four stylish "budtenders," three of them women, offered advice from behind a long glass counter to patients choosing among loose-tea-style jars of pot with names like "Papa Smurf" and "Silver Haze," or Ghirardelli pot brownies and gluten-free cookies bearing the cheerful label "Incredible Edibles." Tiny lamps with violet shades hung in the gloom over the display case; on the back wall, the dispensary's cross logo was outlined in green lights. But for all the dim lighting and hipster bar music, both patients and staff were brisk and professional in their exchanges.
     
      Jason, a 22-year-old with cancer and guarded brown eyes, said he came in once every two weeks to buy a type of cannabis called sativa, a strain said to relieve depression. Leticia, a 27-year-old neighbor and dental-office employee with severe insomnia, came in twice a week for an eighth ounce of the same. A third patient, a 60-year-old neighbor who declined to give his name, came once a month for an ounce of a different strain, indica, to treat a seizure disorder. Patrons had a five-minute limit in the store; there was no smoking, and not a lot of socializing. They were in and out with their purchases, and with up to 300 people a day visiting the club, the entryway resembled a revolving door.
     
      With a membership of 4,200 people (on their best day, the budtenders sold $45,000 worth of pot products), the Green Cross was exactly what many patients wanted-a clean, safe place to buy marijuana that wasn't hidden away in a bad neighborhood. Were all the patients really ill? The range of illnesses for which doctors can legally recommend pot is expansive, including not just diseases but any persistent medical symptom that a physician believes is disabling to a patient. If a number of the city's card-carrying medical-marijuana patients happened to be young men who, as Central District police station Captain James Dudley put it, "look like they could beat me in just about any sport," it's not the fault of the pot clubs. There's nothing about oversight of physicians in Prop. 215 or the subsequent Senate Bill 420 (Health and Safety Code § 11362.78), which in 2003 authorized collective and cooperative cultivation projects but never mentioned dispensaries.
     
      I was curious whether the Green Cross patients really fit Dudley's stereotype, and whether their skin tones lent credence to charges that racism might underlie some of the neighbors' complaints. So one Saturday afternoon in March I sat in the coffeehouse diagonally across the street from the Green Cross and watched. (Because of restrictions imposed by the Board of Appeals on the club-short hours on Saturday (noon to 5 p.m.) and none on Sunday-Saturdays are particularly busy.) By my count, 43 people entered in one hour. They were, in fact, mostly young men in hooded sweatshirts or ball caps who looked to be under age 35. About 40 percent also appeared to be nonwhite-definitely a higher percentage than among the clientele entering, say, the Irish pub next door. Wherever they were parking, it wasn't in front of the dispensary-everyone I saw approached on foot. Although the corner is zoned a neighborhood commercial cluster (NC-1) district, meaning that establishments there exist primarily for the use of the neighborhood, sheer numbers seemed to suggest the club's customers were coming from far and wide, as critics maintained. Still, I had to wonder whether the extra foot traffic would have drawn complaints if instead of pot buyers the pedestrians were gourmands converging on a rare chocolatier.
     
      By early March, none of the ostensible concerns the Fair Oaks neighbors had complained of-increased crime, double-parked cars, and smokers' fumes-seemed relevant anymore. After the Board of Appeals hearing last fall, the Green Cross limited its hours, ramped up security (deploying 17 cameras and at least two security guards during business hours), and offered incentives to patients who came by public transit and didn't linger. A lieutenant in the Mission District police station said she hadn't heard any complaints from neighbors about nuisance crimes in many months, and a look at the crime data for the preceding three months showed that the closer you were to the Green Cross and its expensive security cameras, the less likely you were to be a victim of any serious crime-drug related or not. That left no problems but the clientele and the nature of the place itself. Owner Reed had fought to run a model dispensary, but in the end the Green Cross found itself ensnared by tensions intrinsic to the business.
     
      Unlike many of the medical marijuana advocates at public rallies, Reed looks less like a pothead than like the young office manager for an architecture firm that he once was. Years before that he owned the Pit Stop Cafe in Eight Mile, Alabama, a diner specializing in Southern comfort food and successful enough that in 1997 the Mobile Register's food columnist wrote: "The plucky 23-year-old has an entrepreneurial spirit as fresh as his biscuits." Today Reed still carries a faint Alabama drawl, and on most days he wears a crisp dress shirt of muted tones. On some days he also wears stylish prescription glasses with brushed aluminum frames. As an advocate with a stake in the outcome of medical-pot policy, he keeps an eye on appearances, and says he doesn't believe smoking weed on the front steps of City Hall is "anything but counterproductive."
     
      With his thin build, habitual smile, and slight limp (from a car accident that left him in pain and a medical marijuana user when he was 18), Reed exudes a gentleness at odds with the controversies that often surround him. "I thought I was doing it right," he says with a sad smile. "I thought I would be the last one standing." At the Green Cross he offered health insurance to his employees, kept current on permit applications and sales-tax payments to the state, and followed the rules for nonprofits-in short, he ran his dispensary as legitimately as possible and exactly the way the city asked him to. "I spent way too much of my time and energy just to open the door and sell weed," he says. "That sounds so illegal, doesn't it? Who the hell wants to tell somebody, when they ask you what you do, 'I sell weed'?" Instead, Reed had plans: He would start a Walgreens-style chain of dispensaries, making medical marijuana respectable by bringing it to safe neighborhoods around the city and state. No banks were willing to provide loans for pot clubs, so in July of 2004 he used a friend's capital to buy two candy jars' worth of pot from another dispensary and started selling small quantities of the stuff more cheaply in the Noe Valley locale. "It was the only way I knew to start a business from the ground up when you're in competition with 40 other stores," he says. After a few months, growers began bringing in backpacks full of weed (one medium-size backpack can hold about four pounds, or $16,000 worth of pot) from their own gardens. Over time the number of jars in the shop grew to 50. Reed started keeping an Excel spreadsheet listing growers (by first names only) to whom he owed money-amounts that could range from $12,000 to $49,000 per batch, which he preferred to pay by check rather than cash. Nothing got stale; his experience in the food industry came in handy for moving the product along before it grew mold. "Just like a grocery store, it has to have expiration dates," he says.
     
      In fact, aside from the two black storage lockers full of pungent weed and an excellent security team, the nuts and bolts of running the Green Cross weren't that different from running any other small business. Reed used QuickBooks accounting software, held power meetings in the mornings next to an employee schedule color-coded by name, and kept an inspirational calendar on the office wall with such phrases as "Have great dreams and dare to live them" written in cursive above a rocky coastline. He maintained liability insurance and paid himself modestly ($35,000 in 2005); he even kept the sidewalk swept on his corner. At the height of the Green Cross's success he employed 20 people, including five security personnel. Last year, he paid almost $200,000 in sales and payroll taxes to the state. Although he continually feared a raid and arrest by federal authorities (neither happened), as far as local matters were concerned he believed he was operating by the book. "I mean, almost a fifth of a million dollars went back into the system out of my store," he says. Still, he understood his risks: "I don't by any means fool myself into believing that local support could help me on a federal case."
     
      Reed just hadn't counted on grief from the neighbors: "Of course they all voted for Prop. 215, and they all believe [medical marijuana] should be legal-but only for them!" he says, his drawl growing stronger. "They see a young guy who don't look sick, but there's nothing I did to give that boy a card. There's nothing I can do to take that boy's card away from him. And that's none of their business anyway. Who knows whether that boy is a caregiver, or a pothead, or a recreational user-who knows what that boy is. He could have AIDS and look like the healthiest boy walking around in the world. I don't get to see his doctor's note!"
     
      As the Green Cross's six-month move-out deadline approached this spring, it was clear it would take more than Reed's vaunted pluck (and the real estate agent personally referred by San Francisco Supervisor Bevan Dufty) to get the business installed in a new home. At the end of 2005, San Francisco enacted zoning regulations for dispensaries so strict that promedical marijuana activists such as Rebecca Saltzman of Americans for Safe Access consider them a de facto cap on new pot clubs. She expects a number of existing clubs to close within a year if they can't meet the stringent new planning and public health standards, such as wheelchair accessibility. Though Saltzman says that the number of dispensaries across the state is at an all-time high-estimates range from 127 to more than 200-so is the number of moratoria and outright bans on such outlets by cities including Fresno and San Rafael. (In January, the San Diego County Board of Supervisors even went so far as to sue the state, arguing that Prop. 215 is preempted by the federal Supremacy Clause, though that theory has gained little traction.) Perhaps most telling about San Francisco's new regulations are the areas they place off-limits to new dispensaries-neighborhoods similar to mine. "Ultimately," says Reed, "when you close down the Green Cross, you're sending several thousand people back onto the streets to get medical marijuana-and the only way I believe marijuana is a gateway drug to other drugs is if you send them to Crackville, USA, to buy it-or you're sending them back to [clubs] where it feels more like a criminal element."
     
      Still, Reed admits that dispensaries aren't the ideal solution. For one thing, they keep getting raided by the federal Drug Enforcement Administration-19 in California in the latter half of 2005 alone. In its Tips for Would-be Cannabis Providers, the pro-legalization group California NORML notes that neither Prop. 215 nor SB 420 "provides a green light for sales of cannabis. Those dispensaries that are selling marijuana over the counter accordingly do so at the tolerance of local authorities."
     
      At a time when the tolerance of local authorities even in pro-pot San Francisco seems to be wearing thin, many patients would appreciate new delivery options. "Maybe in ten years we won't even need to smoke, we'll be able to get everything we need out of our little [marijuana] tincture sprays," says Reed. Indeed, the FDA has approved one synthetic THC medication, Marinol. But not everyone believes Marinol works, and for those who don't, dispensaries are one of the only quasi-legal ways to obtain the dried herb. A decade ago California became the first state to legalize the possession of medical marijuana (ten other states have followed), and since then an estimated 200,000 Californians have become medical marijuana users. But last summer the U.S. Supreme Court decided Gonzales v. Raich (125 U.S. 2195 (2005)), holding that the federal government can regulate-and prohibit-the private growth of marijuana for personal use even if it's authorized by state law. (On March 27, Randy Barnett, attorney for Angel Raich, one of the original respondents in the case, appeared before a three-judge panel of the Ninth Circuit, raising constitutional challenges to the federal government's complete prohibition of her medical cannabis use.) "The remaining controversy, if there's really any controversy," says University of Southern California criminal law professor Charles H. Whitebread, "is about whether any federal agents will in fact take out after sick people." And if pot-smoking patients aren't protected, dispensaries are positively an invitation for federal raids.
     
      "Pot clubs are illegal from beginning to end," says Marsha N. Cohen, a professor at the University of California Hastings College of the Law. "They're in total violation of federal law. You cannot possess, buy, or sell marijuana, period. The last time I looked, we were still in the United States." Mark A. R. Kleiman, a professor of public policy and director of the Drug Policy Analysis Program at UCLA, agrees. "Prop. 215 didn't provide for dispensaries. It didn't provide for Walgreens either. If you read the law, what it says is that if you're a patient who is helped by marijuana and your doctor has recommended it, you can grow it and possess it, or your primary caregiver can do it on your behalf. And the notion that these dispensaries are somehow the primary caregiver for hundreds of people at a time is like a bad joke."
     
      Still, that doesn't mean Prop. 215 failed. "Prop. 215 worked just the way Prop. 13 worked-it got passed, which is what it was designed to do," says Kleiman. "Has it given us a sensible system? No. Could we have a sensible system, given that the drug is illegal nationally? Probably not." As for the next ten years, any break in the state-federal impasse will have to come at the federal level. "The right thing to happen," says Kleiman, "would be to get the clinical research done and get cannabis rescheduled, which it probably would be if the research were done."
     
      In fact, a 1999 report by the Institute of Medicine, part of the National Academy of Sciences, has already indicated some legitimate medical uses for marijuana-which suggests that the "lack of research" argument is a red herring. What's really holding up the rescheduling process is politics. "The feds have their heads in the sand," says Cohen. "They seem to think that if they just don't look, this will go away. Instead, what they have is an endless battle with the states that have some kind of medical marijuana law."
     
      But until the political battles at all levels play out, patients like those who went to the Green Cross are on their own. "It was just politics that closed me down," says Reed, after losing his campaign to keep the store open on 22nd Street. "And politics will be the only thing that stops me from opening the next one. Because, by the book, everybody says that I'm the best."
     
      Days after the Green Cross closed, Reed, on edge, picks through the empty dispensary. He's ready to leave. Echoes ricochet off the bare walls, and with no drapes over the windows the sunlight filters in, exposing the peeling paint, the dust on the hanging lamps, and just how small the space really is-350 square feet. The sidewalk outside the dispensary is as bare as its interior; one woman slowly pushes a stroller past the "FOR LEASE" sign taped inside the window. The adjacent dispensary office has already been rented out to a clothing boutique. But there may be life for the Green Cross after all, in another location, in a few months. Reed recently found a landlord in the former beatnik sanctuary of North Beach willing to rent to him, and angel investors ready to loan him money to renovate the new place, which he describes alternately as a "shell" and a "disaster." The landlord, like the investors, has medical marijuana patients in his family. But although Reed hurriedly signed a lease, nothing is set in stone-now he has to navigate an entirely different set of neighbors, and there's no guarantee he'll be issued a permit.
     
      Today, locking up, he's optimistic but nervous. "Who's to say there's not a federal judge who lives behind the place?" he wonders aloud. "Who's to say there's not a DA living there who won't like it?" His worst fear is that promedical marijuana neighbors from the Fair Oaks association will follow him across town to complain at the public hearing on permits for the new locale. "But that would just be evil," he concedes. If all goes well, he hopes to move into the North Beach site over the summer-making the Green Cross the first dispensary to open in a new location under San Francisco's new, stringent regulations. But after almost two years of strife in Noe Valley, Reed shrugs, laughs nervously, and steps out into the windy San Francisco day, locking the door to the former Green Cross behind him. "This has all been a huge gamble for me ever since I started, just to try to help people. And here we go again," he says. He sighs. "Look, here it is ten years later [after Prop. 215 passed], and there was actually somebody doing it right and by the book. If I can't open my doors again, then I have to think America's not quite ready for medical marijuana."
     
#321390

Annie Gausn

Daily Journal Staff Writer

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