PIPE DREAM OR WONDER DRUG?

Medical marijuana use boosts commercial possibilities, as well as legal
quandaries.

Quaint Victorian bed-and-breakfasts that cater to medical marijuana users.
A "plant factory" that produces 400 varieties of marijuana seeds. Hidden
greenhouses with high-tech security cameras and alarms where high-grade
marijuana is grown and transformed into pharmaceuticals. E-commerce sites
that deliver marijuana to your door.

Welcome to a growing business enterprise that is evolving in some states
and around the world, where entrepreneurs believe that supplying marijuana
to chronically ill patients - and others - is more than a mere pipe dream.

Passage of Amendment 20 this month by Colorado voters soon will make it
legal for patients with prescriptions to possess and use marijuana. Yet
purchasing marijuana still will be illegal. What remains to be determined
is how patients will legally get their hands on the drug.

If experiences in five other states that have implemented similar medical
marijuana measures are any indication, marijuana smoking "clubs" and
cooperatives will allow patients to set up networks to acquire the
controversial drug.

But entrepreneurs also have stepped into the picture to offer everything
from marijuana seeds for planting to health information on
marijuana-related Web sites and special "hemp rooms" to accommodate medical
marijuana users.

Although Amendment 20 isn't likely to spark a flood of such
marijuana-related businesses in Colorado anytime soon, less-restrictive
measures in other states are prompting companies to position themselves to
tap the potential growing market.

The Business Of Marijuana

In Santa Cruz, Calif., for example, two entrepreneurs launched the
Compassion Flower Inn bed and breakfast to cater to medical marijuana
users. One North Carolina entrepreneur receives $62,000 a year from the
federal government to roll cannabis cigarettes and ship them Federal
Express, in sealed tins of 300 joints each, to patients, doctors and
pharmacists, said a spokeswoman for the National Academy of Sciences.

Canadian Marc Emery now sells hundreds of varieties of marijuana seeds to
patients and others via his Vancouver-based Internet business.

Although such businesses skirt the boundaries of state and federal drug
distribution laws, an untold number of businesses are eyeing potential
financial rewards as communities ease restrictions on marijuana and hemp.
Unlike marijuana, the hemp plant has just a tiny bit of
tetrahydrocannabinol, or THC, the principal active ingredient that alters
the senses and is said to reduce pain and nausea.

In Mendocino County, 115 miles north of San Francisco, voters approved a
measure this month that would allow residents to grow up to 25 pot plants
apiece. Marijuana seed providers, rolling paper companies and other firms
are eager to tap the market in the county, which has 86,000 residents.

"One day, marijuana will end up in our pharmacies and grocery stores,"
predicts John Entwistle, a spokesman for Californians for Compassionate Use.

'No Effect On Federal Drug Laws'

While talk of easing marijuana regulations has raised the hopes of
entrepreneurs in about a half-dozen states, law enforcment officials in
Colorado emphasize that producing, distributing or purchasing marijuana
remains illegal.

U.S. Attorney Tom Strickland said he doesn't plan to prosecute sick people
who use small amounts of marijuana, but his ofice said marijuana possession
still is a crime.

"Make no mistake about it, this will have no effect on federal drug laws,"
Strickland said.

Meanwhile, supporters of the amendment are working with state officials to
design a medical marijuana user registry that is similar to one set up by
Oregon officials.

"We're going to have to all sit down and think about how to implement the
amendment - law enforcent, public health officials, the governor,
legislature, patients and doctors," said Julie Roche, spokeswoman for
Colorado's medical-marijuana amendment. "I see Colorado moving in the
direction of Oregon's model, with a registry of medical marijuana users and
a patient network, where patients help each other."

Similar marijuana smoking "clubs" and cooperatives have been set up in
states such as Oregon, California, Arizona and Washington, where
medical-marijuana amendments have passed. Yet in states such as California,
implementation has been all but simple. Four years after California's
Proposition 215 was passed, law enforcement officials continue to raid and
close so-called marijuana smoking clubs, and lawsuits from patients seeking
to get their marijuana returned from police have sprouted like weeds.

"When the law was first passed, the cooperatives started out as smoking
clubs, and it was a mess then because there was not control and (all kinds
of) people were smoking," said Martin Chilcutt, a retired psychotherapist
and a cancer survivor who lives in Denver and is organizing a cannabis
cooperative for Colorado. He hopes cooperatives will make marijuana more
affordable, because an ounce can cost as much as $400, depending on quality.

As California's implementation of Proposition 215 has evolved, Chilcutt
said, patients have set up cooperatives, worked with police and have
generally been successful in controlling the flow of marijuana to people
who are trying to reduce nausea and ease pain.

Still, police in California and elsewhere continue to prosecute patients
who they say have too many plants and joints or whom they suspect may be
violating distribution laws. The Justice Department shut down the
5,000-member Oakland Cannabis Buyers' Cooperative in Oakland, Calif., and
lawsuits continue to be filed by patients and club owners.

"Juries generally have been acquitting people with hundreds of plants,"
said Dale Gieringer, California coordinator for the National Organization
for the Reform of Marijuana Laws. He estimates that there are more than
20,000 medical marijuana users in California.

Illegal Pot Industry Expanding

Although less restrictive marijuana laws and changing public sentiment
eventually may open the door to legalization of marijuana, the illegal
marijuana production and distribution industry continues to grow, according
to the U.S. Drug Enforcement Administration's latest figures. Marijuana is
the fourth-largest cash crop in America, yielding more than 8.7 million
havested plants and bringing in $26.3 billion to growers, according to the
DEA. The street value: $43.8 billion. Overall, an estimated 14.8 million
Americans used marijuana or other illicit drugs last year, DEA officials said.

Among factors fueling the increase in risky illegal growing operations is
the potential to earn big money. The flagship strain of marijuana that
Emery produces in Vancouver, called "B.C. Bud," sells for as much as $8,000
a pound, primarily because THC accounts for up to 30 percent of the
marijuana weight. In contrast, more common marijuana with less than 5
percent THC sells for as little as $300 a pound.

Marijuana has been a lucrative, behind-the-scenes business for some
risk-prone growers in Colorado, as well. One reason marijuana-growing
operations are thriving is that Colorado has the highest percentage of
recreational marijuana users in the country, said Dr. Joel Karlin, who has
questioned the elixer-like painkilling qualities of marijuana and was
active in opposing Amendment 20. According to the National Household Survey
on Drug Abuse, 8.1 percent of Coloradans reported using pot during a 30-day
period in 1999, more than any other state.

In places such as Dolores County, in southwestern Colorado, a single plant
can bring in $1,000, according to Sheriff Jerry Martin. Marijuana planted
in cornfields, on mountain ridges and along streams is enough of a problem
to warrant surveillance from Colorado National Guard helicopters. That has
prompted some Colorado growers to relocate growing operations to basements
and attics using high-pressure sodium light bulbs and other devices.

The five leading states for indoor growing based on the most recent DEA
reports were California, Florida, Oregon, Alaska and Kentucky.

Across borders, where law enforcement officials often take little notice of
marijuana operations, there is an even more impressive business boom. The
Royal Canadian Mounted Police estimate that there are 9,000 "grow
operations" in the Vancouver area alone. Canadians increasingly are
breeding indoor plants to reach potencies 10 times the levels of the 1960s.
Marijuana growers in Canada are even selling their marijuana-feeding
schedules for as much as $6,000.

Marijuana 'Patch' Being Studied

Among products being considered by the American Cancer Society and studied
by the Albany College of Pharmacy in New York is a marijuana "patch" to
deliver cannabinoids through the skin. There is a surge of scientific
interest in developing new cannabinoid drugs despite an expensive, long and
risky road to market.

A few companies worldwide are looking to develop pharmaceuticals that offer
health remedies that parallel the benefits of marijuana use. Companies such
as Pharmos Corp. in Israel are developing a cannabinoid for Parkinson's and
Alzheimer's diseases that is undergoing clinical trials.

In Great Britain, GW Pharmaceuticals has developed a sophisticated
marijuana cultivation program that is carried out under tight security in
hidden, high-tech greenhouses with electric fences and security guards.
Plant strains have been developed by Dutch plant breeders to meet strict
pharmaceutical standards.

Another company, Buffalo Grove, Ill.-based Unimed Pharmaceuticals, sells
the compound dronabinol, an oral capsule containing THC in sesame oil.
Marketed as Marinol, the company sells about $20 million worth of the
product annually, Unimed reported, mostly to HIV-infected patients. A
prescription costs patients about $200 a month.

Farmers Want To Grow Hemp

Weld County farmer Bob Winter grows sugar beets, but he has been among the
most vocal of the state's farmers to push for legalization of hemp. He and
other farmers point to their colleagues in Hawaii, Maryland, Minnesota and
North Dakota, who now can legally grow hemp. The crop can be much more
lucrative than spring wheat because it garners as much as $250 an acre.

Winter has the support of the Colorado Farm Bureau, which considers hemp a
viable crop that should be pursued, said bureau spokeswoman Karen Salaz.
But she said federal regulations, such as 10-foot-high fences and 24-hour
lighting, make it difficult for farmers to turn a profit.

"The bottom line has been that the expense due to the federal rules and
regulations are so prohibitive that Colorado couldn't enforce them," Salaz
said. "The reality, unfortunately, for the farmer is that the costs make it
extremely difficult to make a profit."

There are an estimated 25,000 uses for hemp, from rope to tortilla chips,
according to the Hemp Food Industries Association. Colorado State
University has planted a number of test hemp plots in recent years.

Boulder Hemp Co. uses hemp seed from non-industrial hemp plants grown in
Canada to make its Heavenly Hemp Tortilla Chips.

Legal Pot Would Be Cheaper

Jon Gettman, a nationally recognized expert on marijuana cultivation who
frequently testifies at marijuana criminal cases, said legalization of
marijuana would result in dramatically lower, free-market prices.

Through the National Organization for the Reform of Marijuana Laws, he has
been pushing for 24 years to remove marijuana and THC restrictions that
classify the plant as an addictive drug. He hopes that a decision could be
made by the Department of Health and Human Services within two years.

"(The price would be) on the order of five or 10 cents per joint," he said,
similar to other leaf crop prices. Gettman said the easiest way to hold the
price at levels such as those in the Netherlands would be to impose an
excise tax on commercial sales.

A "harmfulness tax" of 50 cents to a dollar per joint could bring in $2.2
billion to $6.4 billion per year, he estimated. And legalization would save
taxpayers $8 billion to $16 billion a year, not counting the economic
benefits of hemp agriculture and other spinoff industries, he said.

Opponents of legalization point to the rise in marijuana-related emergency
room episodes, which have increased from 15,706 in 1990 to 87,150 last
year, according to the Drug Abuse Warning Network.

"Many of these visits can be attributed to the fact that the potency of
marijuana has also increased," said a spokesman for DEA, which had a $1.55
billion budget in 2000 to help fight illegal drug activity.

Gettman claims that marijuana "does not have the same abuse potential as
other addictive drugs."

Gettman said a medical catalog advertised cannabis for as little as $2.50
per pound when it was legal in the 1920s.

"Today's illicit prices range from $100 to $200 per ounce for low-grade
Mexican to $400 to $600 per ounce for high-grade sinsemilla," he said.