CANADA CANNABIS

ANNOUNCER: Now on IMPACT, Canada's prince of pot.

An illegal industry that's pouring pot across the border into the United
States. Next on IMPACT, a nation's pride, a nation's shame.

A modern day tale of two cities Paris and Washington. The pride of a
nation still running deep in first, running on empty in Washington.

Also on IMPACT, money and speed, the driving force behind a fast growing
sport. How women and their money are revving up the sport of speed.

Finally on IMPACT, the first lady, the target of criticism and controversy.
Now redefining her style, recasting her role to blunt past controversy.
Marking a milestone for the first lady, Hillary Rodham Clinton turns 50.

IMPACT, a collaboration of two of the world's leading news organizations,
CNN and "Time." From Washington, D.C., here's Bernard Shaw.

BERNARD SHAW, HOST: Welcome to IMPACT. We begin with a new and unlikely
source of highpotency marijuana: Canada. Indoor pot production there is a
spectacular growth industry. Nowhere is the boom greater than in British
Coumbia, where the crop is estimated at hundreds of millions of dollars a
year. And much of that pot is pouring across the border, into the United
States.

IMPACT correspondent Larry Lamotte reports from Vancouver, where police
tolerance is being tested by a flamboyant businessman considered Canada's
prince of pot.

POLICE: Let's go!

(BEGIN VIDEOTAPE)

LARRY LAMOTTE, CNN CORRESPONDENT (voiceover): An afternoon drama in
Vancouver, British Coumbia.

POLICE: You're going to knock first. Vancouver Police Department.

Get down on the ground! Get down! We've got one more in here.

LAMOTTE: Police believe marijuana is being grown in this house.

POLICE: Stay where you are.

We're the police! we have a search warrant!

LAMOTTE: Raids like this are common here. An average of one every three
days, aimed at pot growers. years ago.

POLICE: I have reason to believe there's cannabis equipment used in the
production of cannabis marijuana.

LAMOTTE: These young suspects are charged with growing marijuana. Maximum
penalty under Canadian law: seven years in prison. But the courts are
lenient. Police say these young men likely will pay a small fine and do no
more than spend the night in jail, even though they allegedly are part of a
booming, illegal industry.

(on camera): Pot is hot and getting hotter in British Coumbia, mainly
because of the tolerance here from the courts and the citizens, and because
there are plenty of places to do things secretly in this large Province
with a small population. But who in the United States would have thought
the neighbor to the north would become a major supplier of high grade
marijuana.

(voice over): In fact, British Coumbia has become the marijuana breadbasket
of the western United States, mainly through thousands of sophisticated
indoor growing operations like this one.

MARK EMORY, MARIJUANA ENTREPRENEUR: If you add Co2, you reach two pounds
per 1,000 watt light.

LAMOTTE: And the man they call the Prince of Pot is one of the principal
forces. He's activist and entrepreneur, Mark Emory.

EMORY: In Vancouver, you couldn't buy a pipe, you couldn't buy "High Times"
magazine, you couldn't buy anything to do with marijuana in 1994. Now, we
have a whole culture with hundreds of books, massive numbers of magazines,
stores all across the country. Marijuana cultivation reaching record
harvest and we take a lot of credit here at Hemp BC. We started this
revolution in Canada.

LAMOTTE: The hemp BC store, owned by Emory, is headquarters for the
revolution. Penniless a few years ago, Emory has converted his passion for
pot into a hemppire, selling marijuana paraphernalia, literature, and seeds.

EMORY: Seeds from every continent in the world.

LAMOTTE: Even chemicals to help people pass drug tests. At his cannabis
cafe, a new way to get high.

EMORY: That's THC vapor and water.

LAMOTTE: Customers inhale marijuana vapor produced by unique pipes, while
eating food containing hemp seeds and oil.

EMORY: This is entirely hemp, this is hemp silk. It's just very fine.

LAMOTTE: Emory shows off his clothes all made of hemp fiber from the
marijuana plant. In the basement, the company custom builds equipment to
grow marijuana indoors. All day, employees and customers openly and
defiantly smoke marijuana. Outside Hemp BC, a policeman stops a motorist,
but ignores what's going on inside.

ACTIVIST: This is a home, this is a safe haven. If people can't smoke
marijuana in this facility, then, then really there is no dignity at all to
this society that claims to be a Democracy. This is a marijuana store.

LAMOTTE: But it's not a secret, underground operation where people sneak in
the back way. Tens of thousands of customers walk into the front door every
year from all over the world. This is a highly visible, public, downtown
business.

EMORY: We do three million dollars in sales out of this, these units. We
have 35 fulltime employees, 40 employees all together. We have a $15,000 a
week pay roll and we pay $30,000 a month to the government in taxation.

Hi, it's the little grow shop. Mark speaking.

LAMOTTE: But it's also a business engaged in illegal activity and everyone
knows it.

What you got here?

LAMOTTE: In front of customers and our camera, a wholesaler brings seeds
smuggled in from Amsterdam where the marijuana seed business is legal. This
middleman makes more than $100,000 a year.

EMORY: OK, what's the bill?

$2,100. Oh jeez, are you sure you don't want stock in the company instead?

MIDDLEMAN: No.

The quality of this marijuana is staggering.

LAMOTTE: Emory then marks up the seeds 300 to 400 percent. Some sell at 10
for $375.

EMORY: And that fellow just spent $250 in American money on only 20 seeds,
and that's very typical, and the government collected $35 on the taxation.

LAMOTTE: Emory claims to be the most prominent pot seed seller in the
world. He's got envelopes full of hundreds of varieties of marijuana.

EMORY: Every kind of known name: Jamaican, Incica, Jack Harard(ph), Jolly
Rancher, Master Cush. These seeds could produce a continent full of
marijuana. Definitely.

LAMOTTE: To promote the cause, Emory publishes a magazine, "Cannabis
Canada." and he operates his own web site to advertise and sell seeds with
as many as one million hits a month.

EMORY: Oh, I think everything here is against the law. It's illegal to sell
these pipes, it's illegal to sell the books on how to grow marijuana. It's
certainly illegal to sell equipment to help people grow marijuana. It may
well be illegal to sell the seeds to grow marijuana. I would suspect, I
probably break several laws a day here. But, but my argument is merely that
the law is simply wrong.

LAMOTTE: While mostly ignored by the law, Emory is an agitator who pushes
the law to the limits.

ACTIVIST: Yeah right. You're a cop? you think you can do anything?

LAMOTTE: In January of 1996, police raided Hemp BC and confiscated
everything. Within days, the Prince of Pot was back in business.

EMORY: We feature every kind of pipe.

LAMOTTE: With no public outcry to shut him down, police allow him to
continue. At least until his court date later this year.

EMORY: We love marijuana here, and we think everybody should have it, and
we are totally dedicated to making sure there's lots of hydroponic marijuana.

KOOS DYKSTRA, SERGEANT VANCOUVER POLICE: If we can compromise Mark Emory's
behavior at this stage, we would do so.

We talked about his business with the head of the drug squad. Drug squad,
sergeant Koos Dykstra.

DYKSTRA: Why not close him down?

Do you perceive it as a big enough problem for us to close it down? When
people are being knifed, murdered and mugged. We haven't ignored it. We are
paying attention to it. It's not on the front burner in view of property
crime, and personal crime that's going on in Vancouver.

The girl in the doorway is behaving, kindly like she's peeking, like she
may be sticking something in her arm.

LAMOTTE: On a swing down some of Vancouver's drug laden streets, the 32
year police veteran said Emory is on the back burner because of the city's
more deadly problems with heroin and cocaine. More than 300 people died
last year.

DYKSTRA: It could be heroin, but it's probably crack. She's got more crack
rocks in her hand, probably.

LAMOTTE: Dykstra believes the war on drugs has been a failure, and has even
made the problem worse.

DYKSTRA: You'd have to be a real dope to think that we're actually
improving the situation. You're never going to stop people from using
psychoactives. By doing so, all you're doing is building up criminal
empires. Al Capone and the boys got their start with prohibition of liquor.

LAMOTTE: The growers of marijuana say it can't be stopped, because there
will always be a demand.

MARIJUANA GROWER: I think B.C. Pot has become the fave of the United States.

LAMOTTE: This entrepreneur invested $50,000 for gear. He expects an annual
return of $200,000. If he were caught with these plants in the United
States, he'd do a mandatory minimum sentence of five years.

MARIJUANA GROWER: Easy money. It's easy money.

I just see profit here. There's lots of money to be made and the penalty is
low. This was the July center fold in high times.

LAMOTTE: This pot grower is so confident, his plants sit next to a swimming
pool, a gathering place for lots of parties.

MARIJUANA GROWER: We generally feel there's a slightly more humanitarian
government around here, it's not into putting people away for life for the
rest of their life for their choice of herbs, or what they put in their pipe.

LAMOTTE: On Vancouver streets, people smoke joints, unafraid.

DYKSTRA: There's not a lot of attention paid to the actual users of
marijuana.

Here's a guy in charge of the area.

LAMOTTE: A department spokeswoman backs up Dykstra. She says police are
less concerned with individual smokers than marijuana trafficking and that
arresting users clogs up the court system. It is an approach many in the
U.S. would find surprising. Equally surprising, Koos Dykstra's opinion
about the Prince of Pot.

DYKSTRA: He's obviously a very dedicated individual, who believes in a
cause and is fighting vociferously for that cause and for that, I commend
him.

LAMOTTE: Down the road from Vancouver, U.S. Customs officials are fighting
for the opposite cause along the Canadian border at Blaine, Washington. But
they are losing. So much pot is pouring in, the U.S. has designated this a
highintensity drug trafficking area. The appropriate acronym: HIDA.

Dogs and agents look for marijuana in cars and trucks. They've found it in
false fuel tanks, spare tires, door panels, even in bags on the back seat.

>From this highway in Canada, backpackers carrying up to 50 pounds of
contraband easily walk through the bushes into the United States. It takes
30 seconds and they double their money. A pound of good BC weed sells for
about $2,000 in Canada, over $4, 000 dollars in the states.

GENE DAVIS, U.S. BORDER PATROL: I think the agents do feel discouraged at
times, knowing that we're seeing a very insignificant amount of what's
really going on around us.

BORDER PATROL: Any goods or merchandise coming into the country today?

LAMOTTE: The Customs Service and Border Patrol believe Canada should move
toward the U.S. policy of zero tolerance about marijuana.

DAVIS: The overall attitude in Canada is probably much more lax than it is
in the United States on marijuana.

LAMOTTE: Do you think the zero tolerance policy is working?

DYKSTRA: No, I don't think it is. Far more people are being arrested, you
got thousands of people in jail for simple marijuana possession and I mean,
it's ludicrous when rapists are being let go to make room for a guy who's
possessing marijuana.

LAMOTTE: Mark Emory wanted to illustrate Vancouver's tolerance at an
outdoor fireworks show. Even Vancouver's openmindedness goes only so far.
Police took Marc Emory's joint, but he didn't go to jail, didn't even get a
ticket.

EMORY: Well, that can happen, too.

LAMOTTE: Left to enjoy the fireworks in a place where police, and public
believe the United States is worried far too much about personal use of
marijuana.

(END VIDEOTAPE)

SHAW: Mark Emory expects to go to court sometime next year on marijuana
trafficking charges. IMPACT will be right back.