Joined: Apr 30, 2007
Mon May 28, 2007 12:34 am
How medical marijuana is turning L.A. pot dealers into semilegit businessmen - no beeper required
VANESSA GRIGORIADIS Posted Feb 07, 2007 11:58 AM
THC BREATH STRIPS. That's what Daniel is thinking about -- taking some of those gelatinous Scotch-tape thingies that Listermint makes and putting oil made from marijuana trim in them. There's a guy who's good at producing marijuana concentrates, and he figured out how to bind oil to pullulan, the same carbohydrate gel that Listermint uses for its strips. Now a bunch of people are selling the things, in plastic baggies with a sticker reading for medical use only for five or six dollars a strip. Most people recommend taking only one, even though they don't kick in for a long time, because two will knock your dick in the dirt for six to eight hours.
"Everything in America is controlled by big corporations now," says Daniel, breezing down the Los Angeles 405 freeway, the controlled climate inside the car the same balmy seventy degrees as it is outside. "But in my industry we can still get individuals together and innovate with good, old- fashioned Yankee know-how, like we did at the beginning of the history of this country." He checks the rearview mirror. "It's a beautiful thing."
The industry that Daniel is talking about is medical marijuana, the great new frontier that has opened up in California in recent years (because some of how Daniel operates may be illegal, his name and other details have been changed to conceal his identity). Contrary to popular belief, medical marijuana is not only for AIDS and cancer patients: The health statute associated with Prop 215, the groundbreaking law passed ten years ago, legitimizes weed for those with any "illness for which marijuana provides relief." There are a lot of people who fall into this category, and business is good for those who make a living by serving them: compassionate caregivers, freedom fighters, botanists in love with the art of growing, Long Beach homeys, Valley boys, Oakland thugs and even one savvy gal who wants her girlfriends to sell medical marijuana while wearing pasties. But as in any drug business, a criminal element persists -- storage lockers of product, safes of cash, hustlers trying to rob those lockers and safes, guns to protect one from the hustlers, and the constant risk of arrest.
Today, the word "pot" is no longer PC -- marijuana is "medicine." Schwag is "low-grade medicine," and chronic is "high-grade medicine." Growers are "vendors." Nor is Daniel a drug dealer -- he is a "medical-marijuana provider." In December, there was even a medical-marijuana "cannabis cup" (a weed-tasting competition) in a Hollywood warehouse across from Amoeba Records. As Cypress Hill's B-Real performed, patients got stoned the healthy way, with 100 percent natural cellulose rolling papers and herbal pipes filled with products like bubble hash, made by extracting resin via ice. At one booth, a NorCal "vendor" sold eighths of Kush, two dead bobcats splayed on the table next to his cash register; at another, a mustached guy in green hospital scrubs hawked pizza slices with a gram of weed inside, and "medicated BBQ chicken breast" for ten dollars each. "I've been astonished by the way medical marijuana has become a commercial business," says Dale Gieringer, director of California NORML (National Organization for the Reform of Marijuana Laws) and a Prop 215 author. "The energy is in medical marijuana for the younger generation, and there's an actual economy of it."
Daniel is proud of his business, which has branched into franchises as well as supply-side endeavors like a grow house. "Look at Ford, or every company out there," he says. "Just because there's a stigma attached to pot doesn't mean that we shouldn't be able to run our business in an intelligent fashion." Never a street dealer himself, he started out with a $50,000 loan from his parents, and after that, he put the next $50,000 he made aside for future attorney fees. In his late twenties, he has a university degree and worked in the business world before deciding against corporate life. Articulate and kind, with a mathematical mind, he dresses conservatively so as not to attract unwanted attention from the authorities, and the effect is very Andrew McCarthy circa Less Than Zero.
"I always say, 'Never compare yourself to the mediocre -- use the entrepreneurial drive to bring yourself to a higher level,' " says Daniel. "The biggest problem facing this industry right now is the stoner mentality."
The 405 is now choked with traffic. He checks his cell: His assistant got her boobs done today, and she's calling because she's in a lot of pain. He's thinking again. He's dreaming about buying the kind of commercial pullulan-making machine that Listermint uses to make zillions of breath strips. The machine is $50,000. He can afford it.
THE first step to securing medical pot is getting a doctor's recommendation, which is usually a Word document printed out from a computer (because marijuana is a controlled substance, doctors are hesitant to write scripts on their regular pads). More than fifty pot-friendly physicians in California are easily found on the Web at addresses like Ganja Grocer.com or by phone at 888-POT-DOCS, as well as on MySpace, Max Racks postcards, radio stations and medical-cannabis giveaway newspapers. The doctor's visit costs about $150 and is usually good for one year. Doctors prefer that patients provide medical records for their ailments, but a lack of paperwork is not a deal breaker (the state does not keep complete records on the number of medical-marijuana patients, but advocates put the number around 250,000). The visit is not covered by insurance, although some doctors have a money-back guarantee -- if they don't approve you for medical marijuana, it's free!
Those who want to maximize their returns in medical marijuana often invest in doctors' offices, paying willing M.D.s about fifty percent of each patient's visit, which is only fair, since medical advisory boards have threatened some with suspending their licenses. The day I was at a Hollywood office, pretty much everyone was getting approved, about thirty patients per day (a $4,500 haul). The phones were ringing off the hook, and the owner had to grab some calls because the girl in the front couldn't get them all: the Better Business Bureau hoping to sign them up for a database, a district attorney curious about the specific nature of the ailment of a patient in legal trouble, and two stoned people asking for directions to the office. "We spend a lot of time giving directions," he said, irritated.
A doctor's note is the gateway to the wonderful world of pot clubs, which in the new lingo are called "dispensaries." In California -- unlike the eleven other states with medical-cannabis laws -- there's some vague legal protection for Amsterdam-style shops selling medical marijuana. Usually named something like "Compassionate Caregivers," "Earth Healers" or, less obscurely, "Kush Mart," these stores are like dying and going to stoner heaven. They look like old-timey apothecaries, with glass cases of prescription bottles with twenty to thirty different kinds of bud, nearly all of exceptionally high quality, ranging from $35 an eighth to $100 for OG Kush. Any self-respecting dispensary owner also sells hash, kief, jellies, infusions, cones, clones, pot lollipops ("Hydropops"), pot candy bars, pot peanut butter, pot ice cream and at least a half-dozen flavors of pot sodas -- sometimes sold out of a vending machine. One store owner told me excitedly that when Nevada OKs dispensaries, he's opening a club on the Vegas Strip. We were talking in a parking lot, and when he drove away he forgot a can of soda on the roof of his car.
The legal basis for these businesses hangs by the barest thread: In California, the law is mum on wholesale marijuana distribution (it is legal, however, for patients to possess a half-pound of weed). More importantly, the federal government still considers the possession and sale of marijuana 100 percent illegal, whether it's sold from a dispensary on Santa Monica Boulevard or by a sketchy guy in a junior-high-school alley. "We don't differentiate between those who use state law to dispense marijuana and those who traffic in marijuana on the street," says Special Agent Sarah Pullen of the Los Angeles DEA. "Marijuana is marijuana is marijuana." Only a handful of DEA agents usually focus on medical marijuana in Los Angeles, though, no match for the commercial instinct of Americans. San Francisco regulates their clubs, and San Diego all but invited the feds to shut down theirs, but L.A. has been a free-for-all. Around 200 clubs have opened in L.A. County since a 2004 State Senate bill gave some protection to the clubs, up from less than a dozen in 2005.
On a recent Saturday night, patients are filling the waiting room of Daniel's most popular shop. He has a stake in several Los Angeles dispensaries. They're all open seven days a week. He wants to help sick people, and waives fees for those who cannot afford their "meds." Some stores deliver, but Daniel doesn't think it's worth it, once you figure in car insurance and gas; some stores also pay sales tax, but he doesn't, yet, on the principle that medicine should not be taxed. He is proud to say that he has the best weed selection of any store in L.A., with dozens of strains up on the dry-erase board every day, a nice color-coded selection of indicas, sativas and hybrids, with lots of Purps and many, many Kushes, the spicy-sweet, lemony-diesel, aggro-lethargic bud that is all the rage in the L.A. ganja-connoisseur scene.
A woman in an electric-blue sweat suit buzzes him through three levels of security: an armed guard, a man trap and two alarmed doors. The security's not for the cops -- it's the robbers that Daniel's worried about. He's been robbed more than once, but he notes with a touch of pride that he's never had a "takeover robbery." That's when thieves dress up as LAPD and pretend they're raiding the store, then hogtie the clientele and steal everything in sight (in the biz, they're called "Ocean 420s"). When a friend of Daniel's had a takeover robbery, the friend called the cops, and the cops arrested him.
The back room is slightly hazy with pot smoke, with Nine Inch Nails booming from the stereo and a stack of video screens documenting the street, waiting room and apothecary. On one wall, there are several six-foot-tall, 3,500-pound gun safes, each with a digital keypad and a gold wheel, like the safe in the grow house on Weeds. The safes, which are bolted to the ground, hold dozens of pounds of pot, a fraction of the real inventory, the remainder of which Daniel says is stored in a secret location off-site. When he opens the safes, I start to laugh -- shocked, nervous, titillated -- because I have never, ever seen this much pot, even on TV.
In the apothecary, there's the usual mix of patients: Hollywood types in designer jeans, an older woman who has pulled out her glasses to read the dry-erase board and a lanky dude gabbing excitedly about his real estate scheme in Pacific Palisades, where he's living in the garage of a $2.6 million house he wants to flip except the foundation is cracked. There are sick people here, and celebrities: Daniel even met a famous rapper once, after the rapper got medical. (It seems he suffers from anxiety and stress.) In a corner, there's a few cute stoner girls, whom Daniel calls "shoppies," like the blondes from a small town down South ("probably a swamp") who introduced him to Tommy Lee at a restaurant one night -- he gave Tommy a breath strip, and Tommy couldn't believe that there was weed in the thing! He got Tommy Lee stoned!
At the counter, a guy in a USC shirt is talking to the goateed clerk (Daniel's employees are paid approximately twenty dollars per hour, plus a free gram per day). With all the options, the customer -- er, patient -- doesn't know what to buy.
"The muffins look nice," he says.
"They're about a gram and a half of hash, which is pretty good," says the clerk. Then he points to the goo -- superpotent powdery hash mixed with honey. "This is what you want," he says. "This will definitely get you medicated."
FOR all the fun of this business, Daniel is not having a very good time. As in any covert industry, there's no one he can trust except himself, particularly when it comes to buying pot. The vendors can be a real pain in the ass, and he's up all night sometimes waiting for them to drive down from Sonoma County or their Inland Empire warehouses. (Vendors usually carry one or two strains of pot, as growing conditions are easiest to manage with the same crop.) His cousin used to do the buying -- she's got an amazing nose, and can even smell mold in a nug in the bottom of the bag -- but they had a falling out, and his brother can't seem to smell right. Smelling pot, the first step to identifying good herb, is like being able to roll your tongue, says Daniel. Even he is at a bit of a disadvantage, because he no longer smokes pot, and you really need to smoke weed to buy and sell weed. In college, he smoked a couple of times a week, but he is sick to death of the smell.
Daniel's dream is that his businesses could operate like franchises, and he tries to require that each store buy marijuana exclusively from him, taking a markup on each deal. "Look at McDonald's or Starbucks -- the only way to control franchises is to control the supply," he says. "Still, cash flow is very difficult. There is no way for me to properly franchise this, to the point where I'm taking a percentage in profits, kicking back and making money." He cannot keep detailed records, he says, because of the possibility of a DEA raid, and he couldn't entrust an assistant to keep records, because of the possibility that he might turn out to be an informant.
The narcs -- they're such a nuisance. Last year, they raided one of his shops, and he lost more than $100,000 in the process. In addition to draining Daniel's bank accounts, the feds did a "snatch-and-grab" at the store -- pot, computers, cash, anything not bolted to the ground -- and even went to the house of one of his employees. Nevertheless, nothing appears to be happening with the case. The feds won't touch it, because their attorneys will rarely prosecute cases unless enormous amounts of pot are involved, and the local DAs aren't much more likely to press charges. In fact, not one club owner has been prosecuted by the feds in Los Angeles in the past two years. Daniel could maybe even get his money back, but he'd have to pay an asset-forfeiture lawyer a third of his winnings plus show the feds all sorts of records, and that's the last thing he wants to do.
So he's stuck driving around day and night, dropping off weed to each store in bulk. Today, he needs to go to the San Fernando Valley, considered medical marijuana's Wild West, with dozens of stores being opened up by kids who were just last year selling pot out of their mothers' basements. He's been staying away from the Valley because he heard there might be raids there this week -- if he pays the right people, he says, he gets twenty-four-hour notice before a raid. Then, yesterday, one of the big Valley kahunas was taken down by the feds. The place was all about low profit margins and high quantity -- it was way sketchier than Daniel's spots.
Now, Daniel feels safe. We're at his apartment, a modern place on the west side befitting a well-to-do yuppie, getting ready to move product. He opens his kitchen cabinets, and there it is with his extra toilet paper: one pound each of Northern Lights Haze, Afghooey, Black Sensei, Bubblicious, Blackberry and Green Erkle; a half-pound of White Widow; two pounds of Cali Orange and two more of Sour OG Kush; two and a half pounds of Mekong Haze; three pounds of Purple Haze; 37 grams of Lamb's Breath hash; 125 grams of Master Kush; 189 grams of some grapey flower he doesn't know what to call, and 110 grams of Granddaddy Purple hash.
"I didn't even want the Granddaddy Purp hash," he says. "The vendor was like, 'By the way, I have a half-pound of hash, do you want it?' No, I didn't want it. I wanted flower. But what do growers love? They love coming down, dumping everything they've got, taking cash upfront and going back really clean. The last thing they want is to be driving with $60,000 in cash and getting it seized because they also happen to have a half-pound of hash."
He puts it in his trunk, in four gigantic duffel bags.
The freeway is streaming nicely up the 101 -- Daniel genuinely believes that outside of rush hour Los Angeles has the best freeway system in the world, and he tries to locate his businesses within five minutes of a freeway. He looks at his cell phone. "Should I call the store?" he worries. "If I call them, they're going to try to hide something before I get there. Maybe they've been buying on the side, or they're sitting on the couch playing PSP, or one of them closed the shop to bang a patient in the back room. It's definitely happened before."
The shop is calm. A couple of young guys man the counter. In the back, two blondes in miniskirts and frosted lipstick are putting blueberry stickers on a mountain of plastic prescription bottles. A mutt romps by. "No animals in the store -- how many times have I told you?" fumes Daniel. "It's not medical." He looks around for something to eat, but all he can find are half-eaten pot Rice Krispies treats and pot brownies. "Can someone order some food, please?" he asks, irritated again. One of the girls gives him the menu for an Italian place in the neighborhood. "It's really great, because the delivery guys are also our patients!" she says brightly.
The other girl smiles at Daniel, looking very proud of herself. "I just sold some Pussy Kush to a patient," she says, coyly, "and I told the guy, 'You can smell it, but you can't finger the $100 pussy.' "
The weed goes up on the new scale, next to a calendar of hot chicks in bikinis. Daniel tells the staff to blow out the Sensei and Purple Haze, and gives his buddy a couple of pounds that he wants him to get rid of -- insofar as the medical-marijuana- compound business is a turnover game like any other drug business, Daniel makes extra money by selling pot that he can't move to other stores. He takes out the 189 grams that doesn't have a name. "I'm not really sure about this," he says. "I'm not sure if it's Purp." A clear plastic bag, the kind used for frozen turkeys, goes around. "God," says one guy, nose deep in the bag, "in all honesty, it has a skunky smell, big time."
"What about Grape Ape?" says another guy. "Except High Times had a big spread of it last month, so people probably know what it looks like."
Daniel thinks. "Fruity names always do well," he says. "What's a fruit you really enjoy? Or maybe Skunkenberry?"
"Skunk Fruit!" says the first guy. Everyone laughs, and Daniel writes it on the bag in black permanent marker.
THE next morning, Daniel wakes up at his girlfriend's house, nuzzling deep in her sheets. He sleeps the sleep of the just. He really thinks he's doing good. "This is our life out here -- feds keep their nose out!" he says. "Washington will never understand California, so they write us off as liberal, gay, Jewish subversives undermining the value of America. They don't like us, and I don't like them. This movement is one more way of saying to D.C., 'Step back.' We will not stand for states' rights eroded." He is also in favor of pot as an alternative health-care system: "We have the right to do our own thing, to not support Pfizer, Eli Lilly and the health-care system just because they have more powerful lobbyists in Congress than we do," he says. "If I wanted to smoke pot, I would feel I could. I mean, it's a plant."
There are things that Daniel still does want to do in this business, like make an affordable vaporizer -- "I made those in shop class in high school for ten bucks," he fumes -- but he really doesn't want to have to hide his money somewhere, always afraid that the feds are going to seize his assets. He'd like to get a little further into growing -- he started a grow house, but his growers haven't turned out much, and one of their dogs had a mess of babies on the upstairs carpet. He's thinking of buying a farm in Mendocino, near the kush-growing parents of a friend he knows in Hollywood. Up there, in the mountains, growers exist in a perfect world of themselves and plants, he thinks. They call him up sometimes at 3 a.m., to tell him that they've got some bud blooming, to see if he wants to drive up to take a look. "They're just incredible American farmers," he says. He wishes his life could be that quiet, so quiet in a magical medical-marijuana field. It really is a beautiful thing.
The next time I meet Daniel, it's a couple of weeks later at a hip vegetarian place on Melrose. He searches his pockets for an Ativan, but comes up empty -- this is his choice of medicine, which he needs to take off the stress, much as others need what he sells. He is nervous today. There's a new crew of thieves going around who have figured out how to open safes: He thinks they might be a bunch of ex-dispensary security guards handy with diamond-bit drills. Then there's his irritating friend: He wants $50,000 to go up north and buy weed for them to sell down here. "I get the point, because it is really annoying that we pay vendors $300 to $400 per pound simply to drive to L.A. for seven hours," he says. "But I'm taking the risk that he's going to get stopped and lose $50,000." He tells me one of his security guards caught a guy photographing license plates in his parking lot last week -- it's a police investigation, he thinks, but he doesn't know into what.
We hug on the street, and he goes off to find his Ativan. Two days later, the nature of the investigation becomes clearer: In the afternoon, 120 DEA agents, helicopters flying overhead, descend on eleven Los Angeles dispensaries, detaining nearly two dozen providers. According to Special Agent Pullen, 5,000 pounds of pot, 163 plants, $200,000 in cash, seven handguns and one shotgun were seized. Within a week of the raids, L.A. Police Chief Bill Bratton has pushed through a moratorium on more dispensaries until the city passes new regulations.
Daniel won't say if any of his places were raided, but he did go to one that was, and the police weren't even allowing anyone on the same side of the street. "Given that there are over 100 clubs in the city, it's a relatively minor action," he said, struggling to put a good spin on the events. "Dude, it's amazing: The feds didn't even realize that one of the shops they raided had a second floor! A couple of guys hid up there, watching the cameras as they were wheeling out the ATM machine and destroying the place."
His phone was ringing off the hook, with medical-marijuana advocates organizing a protest at West Hollywood's city hall. Soon the feds would seize one provider's Ferrari. "This is a political thing," he says. "Someone is mad that marijuana is out in the open now. It's just not even close to being hidden." He couldn't bear to visit anyone's raided stores -- the damage that the DEA did screwing around in there, he was sure, was worse than a pogrom. He was focusing on the future, helping people make plans to reopen. "All eleven stores are going to open their doors again," he says, "and I can't wait to see the look on their faces when we do."
This movement, he thinks, is too big to stop.