OAKLAND DISTRICT EVOLVES INTO CANNABIS COMMUNITY

The blocky bouncer stands guard outside the Oakland cafe, complete with a
copper espresso machine, fancy chocolates, elegant glass lights and a
European air.

Pedestrians may unknowingly wander in and order coffee, but the tip-off
comes when, sorry, the food options are limited or access to the downstairs
lounge is politely denied. The main thing on the menu here is medical
marijuana.

Suddenly, the bouncer's T-shirt makes more sense: The word stretched across
his broad chest reads "Oaksterdam."

The name "Oaksterdam" is arrived at by mixing the names of
cannabis-tolerant Amsterdam and Oakland, and the downtown district near the
19th Street BART station is now home to eight medical marijuana clubs. One
such club is a new three-story dispensary on Telegraph Avenue that owner
Ken Estes says will eventually house an organic food cafe, along with an
on-site chiropractor, acupuncturist and a doctor.

Apparently the first of its kind in the United States, this cannabis
community offers a range of services. Patients can pick up city-sanctioned
patient identification cards, purchase $550 lung-friendly inhalers that
allow the medicine to be vaporized rather than smoked, get
marijuana-growing equipment or buy cannabis in any form, from green buds to
lollipops.

"San Francisco and Oakland have Chinatown and Japantown. Now we're going to
have pot town. Better yet, hemp town," said Randy Csongor, the manager of
Best Collateral pawn shop, which sits in the middle of medical marijuana row.

Club owners are circumspect about where they get their product, which they
sell to patients at prices ranging from $50 an ounce to more than $400 an
ounce for the highest grade.

The dispensary owners -- who acquire the usual business licenses but no
other official permits for cannabis distribution -- are caught in an
uncomfortable legal position. The city and state says they are legal under
Proposition 215, the medical marijuana compassionate use initiative that
California voters passed in 1996.

But the federal government says the clubs are operating illegally. Federal
agents have staged pot club raids and pursued high-profile activists such
as Oakland resident Ed Rosenthal, who was convicted in a controversial
trial earlier this year for cultivating marijuana.

The jury, however, was not allowed to hear evidence related to Rosenthal's
assertion that the city of Oakland had "deputized" him as part of its
medical marijuana program. U.S. District Judge Charles Breyer sentenced him
to one day in jail, which Rosenthal had already served. But in July,
federal prosecutors signaled they would ask an appeals court to increase
Rosenthal's sentence. The government did not explain on what grounds they
intended to appeal.

Greg Underwood, a special agent at the Drug Enforcement Administration,
said, "If we are investigating them, I can't comment on any open
investigations . . . . The only thing I can say is that marijuana is what
we consider a Schedule I drug, which means it's illegal to use and the
federal government does not make any distinction for medical marijuana."

Estes, whose front-room eatery at the 420 cafe so far consists of an empty
room, a fan and an "Open" sign, says: "Unfortunately, we have one foot in
the illegal world and one foot in the legal world. We're trying to get both
in legal world."

Some of the Oaksterdam clubs do not have phone numbers or even signage; one
is jokingly called "Parking in Rear," a reference to the only sign posted
on the storefront. Others have the appearance of a sterile nurse's office
- -- with a few extra television monitors -- and still others seem like
ordinary cafes with umbrellas and dainty tables out front.

The clubs' shadowy status is also apparent on paper: One proprietor's
business card lists his job title as "coffeeshopkeeper;" another
dispensary's glossy, postcard-size advertisement reads "a different kind of
chocolateria." And though owners are eager to speak about their concern for
patients and show how professional their businesses are, of those
approached, only Estes would speak on the record, an indication of just how
tenuous their situation is.

"I see the people running those clubs as modern-day heroes," said Keith
Stroup, founder and executive director of the National Organization for the
Reform of Marijuana Laws, a public interest lobby in Washington, D.C. He's
visited the neighborhood and even has his own Oaksterdam T-shirt.

"It does remind me of Amsterdam. It's certainly the closest thing we have
in this country to what they have in Amsterdam," he said. "I think there's
nothing quite like that in the United States."

The difference here is that only people with doctor's recommendations and
official IDs can get through the door, he said, adding that the
proliferation of the clubs is an expression of the public will and attitude.

Indeed, the pot district has been cultivated with the help of reasonable
rents, access to public transit and a relatively low-key attitude of the
city government and the Police Department. And mellow seems to be the
reigning mood among shopkeepers and pedestrians here.

To be sure, a couple of people had concerns about the clubs' customers
hogging parking spots or certain clubs getting too loose and easy with
identification cards.

Robert Williams, the deputy director of the Sexual Minority Alliance of
Alameda County (SMAAC), complained that smoke was seeping into their
office, which is wedged between two clubs. Staff members have been
approached by people on the street about buying marijuana, he said. They're
particularly concerned because, "some of our young people are at risk for
substance use."

Joe DeVries, field director to Alameda County Supervisor Nate Miley, said
he found SMAAC's complaints disingenuous. "Nancy Nadel's office was trying
to mediate problems between his program and the clubs," he said. Matters
seemed to be resolved when, he said, "all of the sudden, you're going to
the media."

In fact, the neighborhood reaction to Oaksterdam, by and large, fell
somewhere on a spectrum from indifference (and ignorance) to downright
enthusiasm.

"We love them, we love them!" said Mario Paceppi, the owner of the Fat Cat
Cafe who has a medical marijuana recommendation for acid reflux and
gastrointestinal problems. With the new crop of clubs joining long-existing
ones -- including the flagship Oakland Cannabis Buyers' Cooperative, which
sells cannabis-related wares and distributes ID cards but no longer sells
marijuana -- the area has been revitalized and is cleaner and safer, he said.

"Because there are more eyes out. When it was more desolate, there were all
sorts of horrible stuff going on." Plus -- jokes about marijuana-induced
munchies aside -- patients and club employees regularly stop in for lunch.

"That's the only thing pushing the economy down there," he said.

"Any kind of business is business," Csongor said at the pawn shop, dryly
noting that "there are more people going in there than McDonald's.

"It hasn't caused any problems. No fights, no riots, no outbreaks. Nothing
like that. It could be dressmakers over there, it wouldn't be any
different," Csongor said.

"These things have just grown up without any great public fanfare, so
obviously, this has to be looked at carefully," said Mayor Jerry Brown.
"Californians are strongly in support of medicinal marijuana; compassionate
aide to people who are truly sick. But the big question is, what is the
proper method of distribution and how should it be regulated?" One of his
inspectors is working on a report for the City Council, he said.

But other city officials have known about and supported the cannabis clubs.

Joel Tena, a constituent liaison for Councilwoman Nancy Nadel, whose
district includes Oaksterdam, said: "We see the medical marijuana
dispensaries as enhancing the neighborhood. We know here in city of Oakland
that medical marijuana is literally something that keeps people alive. We
want to make sure it's available if they need it."

If the Oakland Police Department isn't quite so gung-ho, officers
nonetheless have stuck firmly to a laissez-faire policy.

Lt. Edward Poulson, the commander overseeing the Oaksterdam area -- he
laughed when he heard the term for the first time from a reporter -- said
he's received some complaints about littering, loitering, smoking in
public, parking and people who buy the medicine legally, then sell it
secondhand on the street.

Also, in a few cases, customers have been robbed leaving the premises, he
said. But he pointed out that leaving a bank with cash is arguably a
similar risk and most of the complaints have centered around a particular
club, which he did not want to name.

"It's like a nightclub or the bar scene," he said. "It's not how many you
have, but how they operate."

Police Chief Richard Word said: "I'm not opposed to medicinal marijuana,
but there needs to be some structure to this . . . . There has to be some
rhyme or reason about where these things are so the city can say this is OK
or this is not OK. That's clear this has to happen."

But club owners say -- and patients confirm -- that clustering is helpful
to customers because it means they have more choice in quality and price.
Those who don't care to (or can't) inhale, for example, can shop around to
find pot teas or cooking butter; if one dispensary's wares aren't helping
with chronic pain, maybe they'll have better luck next door.

"It's not like plastic toys, it's fresh produce," said one cannabis club
employee.

Kristen Baumgartner, 22, who just completed chemotherapy treatment for bone
cancer and said cannabis helped reduce nausea and stimulate her appetite,
strolled out of a club on a recent afternoon with a $405 ounce.

"It's great for it to be in one area . . . . It's a community." said Curtis
Thomas, 32, who got a prescription for marijuana because of a work-related
wrist injury. "If it continues this way, it's going to be a boon for Oakland."

Thomas said he picks his dispensary of the day largely based on cost, but
"I do sometimes go according to my mood." For an in-and-out job, he'll head
to one spot, but "if I want to go to a nice lounge with tile floors" and a
"speakeasy" atmosphere, he'll head somewhere else.

Some might argue that clubs are spelling their own doom by opening so close
together, but one club employee said it's good for business, comparing it
to Las Vegas and the clump of casinos there. Inevitably, trash-talking goes
on, he said, but mostly the competition is friendly.

"We're all fighting for same cause," Estes said, "and we all would like to
see each other make it."