BUDDING BUSINESS

Marijuana is a $7.5-billion industry in B.C., with a dedicated labour
force of 250,000, well-established trade routes into the U.S. and
savvy branding strategy worth a hefty premium. Just like the legal
sectors driving this economy, business is booming. Katya Holloway
smokes out the current state of B.C.'s pot industry

It's the summer of 2006. Children are playing outside on a quiet
Chilliwack street populated by middle-class families, while parents
tidy up their yards and occasionally stop to chat.

Sadie and her boyfriend Pete (not their real names) live in one of
the brand new three-story houses here. Hanging flower baskets adorn
the entrance; a shiny silver SUV and a sporty black two-seater sit
parked in their driveway.

Sadie and Pete (they have since moved to a new city due to a job
transfer), have respectable nine-to-five jobs. In all respects, the
well-to-do pair appears to be ideal neighbours.

A tour through their basement last summer tells a different story.
There are no bicycles leaning up against the wall, deflated air
mattresses or other discarded household goods you'd expect to find in
a suburban home. Instead, the room resembles a science lab. It is
drenched in a blinding white light and the air is filled with the
humming of fans. hoses and electrical cords, pinned neatly to the
floor, circle the room and snake up walls, poking through tightly
sealed holes that lead out of sight. Temperature and humidity are
regulated by gauges and timers that control exhaust fans and
1,000-watt metal halide lights. The room has an earthy smell with a
hint of menthol.

Perched against the far wall is a shelving unit stacked with
magazines, books and colourful packages of nutrients with names such
as Big Bud Liquid. All the other walls are bare, covered in plain
white plastic sheeting. And at the centre of the room is Sadie's
garden of 100-odd marijuana plants.

Sadie says she's after Triple-A weed, which is classified as the
highest grade of B.C. bud and sells for about $2,000 a pound. The
couple's crop alone is worth about $10,000, she explains and the
garden replenishes itself nearly five times a year.

While Sadie gives a journalist, who has promised the couple
anonymity, a tour of the veiled operation, her glossy grey eyes cast
a motherly glance over her beloved crop.

"They're almost ready," she gushes, gesturing proudly toward the
plants. She leans in further to inspect a dark green bud covered in
rust-coloured hair-like pistils.

The 26-year-old says she spends six hours in the secluded room each
week, meticulously tending to the needs of her prized plants. She
trims them, waters them and releases carbon dioxide into the air from
a canister, all the while noting the progress of their growth in a
leather-bound notepad.

Over a case of Kokanee, with the couple's 50-pound pit bull Angel
curled up nearby, Sadie says many of her friends in the Fraser Valley
have a "grow". They're just regular, entrepreneurial Joes and Janes
with good jobs, eager to supplement their income to make a decent
living. Most of their operations consist of just two or three lights
and handful of plants, which don't suck enough electricity to trigger
alarm bells at BC Hydro. The initial investment to set up a small
basement grow is anywhere from $2,000 to $4,000, depending on its
size, and the payback is bountiful.

What has evolved into a little side business for many sweet suburban
couples in this province is becoming even more lucrative thanks to
some savvy branding. Not only is this province home to high-quality
pot, but the underground industry's top performers have proven
themselves aces when it comes to marketing; B.C.-grown weed has
gained a reputation around the world among serious tokers as the best
in the world. According to Seattle-based Rod Benson, the U.S. Drug
Enforcement Agency's special agent in charge of the pot trade, B.C.
bud is considered "gourmet weed" south of the border because it
boasts a higher THC content than Mexican marijuana.

It's all part of a very successful branding strategy, says Supt. Paul
Nadeau, director of the drug branch at the RCMP headquarters in
Ottawa. "Growers in B.C. have a done a very good job of marketing
their product," he explains. Aend more marijuana is being grown in
B.C. than could ever be consumed. "He adds: It's bigger than just a
local problem. It's really an international phenomenon."

Most of it is going south to the States, Nadeau admits, and there's a
good business case for it. While a pound of B.C. bud wholesales for
$2,000 in this province, that same pound across the border will fetch
US$3,000 in California and US$6,000 in Atlanta, says Benson. He
estimates the B.C. marijuana industry is worth up to US$6
billion. A 2004 report conducted by the RCMP's B.C. criminal
analysis section "modestly" pegged B.C.'s marijuana trade as a $7.5
- -billion cash crop. "It is smuggled across the border in many
different ways," explains Benson. "It's backpacked, transported over
the waterways, in helicopters and airplanes, and there was that
tunnel that was constructed last July." Once the marijuana crosses
the border, it's often stored and then shipped to L.A., Houston, Las
Vegas and the Midwest.

Pot, unlike many other commodities, is always in demand and has never
faced a recession. The industry is flourishing and many businesses
are hungrily devouring pieces of the marijuana cultivation pie,
including hardware stores, electricians, real-estate agents and
retailers selling generators, solar panels and other grow-op equipment.

One example is Abbotsford-based Advanced Nutrients, a company that
specializes in manufacturing nutrients for soil to optimize growth.
Co-owner Michael Straumietis - who is no longer based at the B.C.
head office - has acknowledged in the past that the company's
products are used for marijuana cultivation. He has also claimed the
company distributes to more than 700 hydroponics stores across Canada
and the U.S., and generated gross sales of $20 million in 2003 (more
recent revenue figures were not available).

Advanced Nutrients'owners - Straumietis, Robert Higgins and Eugene
Yordanov - were charged in 2001 with serious drug offences, but after
two years the charges were stayed. In 2003, they teamed up with
another company to build a research facility and medical marijuana
cultivation site. When contacted for an interview, Advanced
Nutrients officials did not return calls.

It isn't easy to quantify the business generated by B.C.'s pot
industry, says SFU economist Stephen Easton, a senior fellow at the
Fraser Institute who authored the 2004-report "Marijuana Growth in
British Columbia". The only way to measure the size of the industry
accurately would be to legalize the drug, says Easton, as all sales
would be reported. It is a measure he opposes. Such a move would be
up to the federal government, and Easton says he thinks it is
"completely at sea" on how to deal with the matter. "They're
frustrated and don't know how to react. Police are giving them
advice, saying it's got to be stamped out, and others are saying that
it shouldn't be stamped out."

Indeed, numerous calls to politicians to get their opinion on the
matter were met with silence. Prime Minister Stephen Harper declined
to comment. A request for an interview with Premier Gordon
Campbell's office was swiftly forwarded on to the solicitor
general. And despitenumerous attempts to reach Solicitor General
John Les, calls were not returned.

The only politician who agreed to answer questions for this story was
Vancouver Mayor Sam Sullivan, who says drug matters can't be handled
by city bylaws because they are a federal issue. "We are hampered
right now in the city,"says Sullivan. "The federal government has
taken it completely out of our hands."

The mayor adds, "I think we should do what every
government-commissioned report in the U.S., Canada and Europe has
recommended and move toward decriminalization or some sort of
regulated environment."

South of the border, U.S. government officials are becoming
increasingly frustrated with he way drug laws and enforcement are
being handled in Canada. Doug Whalley,. assistant U.S. attorney in
Seattle, who heads up the Criminal Enterprises Unit (the organized
crime unit of the U.S. Attorney's Office), says the "flood of
marijuana coming south" is a major problem and Canada's lax laws on
pot production are putting a burden on the U.S. "Canada's somewhat
tolerant view of marijuana tends to backfire," he says. "Trafficking
results in cocaine going north."

Local cops are used to such criticism. Inspector David Nelmes, the
former had of the VPD's vice/drug section who is now in charge of
communications, says his officers are often running four to five
files at a time in an effort to keep up. Due to time constraints,
their priority isn't about chucking small-time users in jail - it's
to close down organized crime groups.

The number of grow ops the VPD busts has actually been dropping, but
their average size is on the rise. In 2003, police investigated 203
grow ops. That number hit an all-time high in 2001 of 455, but
dropped by 2005 to just 180. "The numbers are decreasing," Nelmes
concedes, "but what we are noticing is that the grow ops are getting
larger. There used to be an average of 300 plants per grow, and now
we're seeing the numbers going up. Last week, we found 600 plants in
an apartment." Police sources say it's not unusual today to find
sites with more than 1,000 plants.

As the VPD keeps their focus on the bigtime pot growers with
thousands of plants worth millions of dollars, Pete and Sadie, with
their seemingly innocuous collection of 100 plants, at most, maintain
a cheerful nonchalance about running a criminal
operation. Surrounded by her cash crop, Sadie remains serene. "It's
my little herb garden," she says with a grin.

Tables Inserted into Article:

B.C.'s economic drivers

B.C. GDP by Industry (2005)

Forestry = $10 billion Construction = $7.9 billion Marijuana = $7.5
billion* Hotels, restaurants = $3.8 billion Mining, oil and gas = $3.5 billion

Source: Statistics Canada * Annual sales (source: RCMP)

PRICE OF B.C. BUD

These are wholesale prices per pound. When pot is divided into
smaller portions to sell on the street, the price will be $10 -
$12/gram. Triple-A is considered gourmet bud because it has the
highest THC content and takes only the finest parts of the plants.

Low-end weed: $1,200 - $1,500

Indoor: $1,500 - $2,400

Ordinary: $1,500 - $1,700

Triple-A: $2,00 - $2,400

Source: Growers, Marc Emery, VPD and RCMP

HOW TO SPOT A GROW OP

Covered windows: black plastic, heavy curtains or blinds may cover
the windows in order to prevent any light from escaping.

Condensation: humidity inside a grow room is approximately 65 per
cent; coupled with warm temperatures, this causes condensation on windows.

Marijuana smell: the smell can best be described as the scent of
skunk or rotting cabbage, mixed with a sweet vegetable odour.

Industrial sounds: electrical humming, fans or trickling water.

Bright lights: high-intensity 1,000-watt lamps are normally used for
indoor grows and are sometimes not completely disguised.

Localized power surges: neighbourhood residences may experience
unexplained power surges or power "browning" (decrease of power which
dims lights and slows down appliances) with the return of normal
power flow approximately 12 hours later.

Discarded equipment: growers sometimes leave equipment lying around
the yard, such as nutrient containers, pots, wiring, soil root balls,
aluminum shrouds, PVC piping, etc. On garbage day in the
neighbourhood, the residence does not put out garbage.

"Beware of Dog" signs or guard dogs: these are used to deter
trespassers, to protect against theft, "rip-offs" and detection by police.

Rental accommodations: almost all marijuana growers will use rental
homes to avoid damage to their own properties. Tenants may insist on
paying rent in cash.

Unusual visitor behaviour: when compared to the average homes in the
area, you might notice inconsistencies in visitors to and from
residence, ranging from no visitors, giving the appearance of
seclusion, to frequent visitors for short time periods.

Other signs: lights or TV operating 24 hours a day, flyers left in
the mailbox, children's toys outside with no kids seen living at the
residence (props used by growers to deflect attention).

Source: RCMP

GROW OPS IN B.C.

Just how many grow ops there are in the province is a matter of
debate, with estimates ranging from 20,000 to 200,000. According to
Statistics Canada, there are 79 grow ops for every 100,000 people in
B.C. - nearly three times the national average of 27. BC Hydro
recently estimated there are about 18,000 locations across the
province that use extremely high levels of electricity, a sure signal
that they could be harvesting an indoor plot - and that doesn't
include growers who are stealing hydro or whose operations are
powered by generators and make use of solar panels.

Marc Emery, the self-styled Prince of Pot, says there are at least
100,000 growers or grow ops in B.C., about 20,000 in the lower
Mainland and at least the same number on Vancouver Island, The Fraser
Valley, Kootenays and Okanagan are also prime locations, he adds.
(Emery says a lot of people on the island use generators to avoid
being detected by BC Hydro.) He estimates that of all the growers
across B.C., up to 40,000 are relatively small operations, using just
one or two lights. He estimates 10 per cent have 20 lights or more,
and most of the largest crops are powered by generators.

Exploring the economics of the business, Emery estimates an average
of two and a half people working on each crop, and up to 70,000
"brokers"(distributors who buy weed from growers, earning about $200
a pound) moving the pot throughout b.C., meaning the industry is
employing an underground labour force of around 250,000. Emery is
facing drug charges in the U.S. for selling pot seeds online. He no
longer sells online, but a number of B.C. companies still operate
businesses over the Internet with prices ranging from $30 to $120 for
bags of 10 to 12 seeds. They can be certain that police both in
Canada and the U.S. are monitoring their operations closely.

"The winds are changing," hints Inspector Nelmes.