PHILLYDEALS: N.J. DRUG BIZ SHRINKS; WILL ANOTHER SPROUT?

New Jersey's pharmaceutical industry, its scientists and technicians
and sales reps in the bright office parks and steaming lab complexes
that sprawl across the state and down Route 202 into Pennsylvania, is
folding in on itself.

Merck, based in Whitehouse Station, outside Newark, said yesterday
that it had agreed to absorb Schering-Plough, based in Kenilworth,
about 25 miles west on I-78.

To make the deal pay, Merck plans to shave about $3.5 billion from
yearly expenses, equal to about a third of its operating costs. And
Pfizer, of New York, is planning to buy Wyeth, based in suburban
Madison. The likely local result of each deal: a few thousand jobs
lost. See news story, A1.

Industrial policy?

Meanwhile, Gov. Corzine and a majority of the New Jersey Senate are
on record backing plans to, in effect, create a new drug industry,
joining California and other states that have legalized marijuana for
home use on doctors' recommendations.

In California, marijuana is a significant, integrated business,
though numbers are tough to nail down. Growers, concentrated in
mountain counties, supply state-sanctioned clinics in the San
Francisco and Los Angeles areas at the request of doctors who
sometimes have broad ideas about what the drug can do, and for whom.

But even out on the Left Coast, there's a mom-and-pop, small-batch,
carry-a-gun quality to the business. That's because marijuana
production and distribution is still a federal crime.

The Drug Enforcement Agency "seems to intervene when there's more
than 100 plants on one property," Roseanne Scotti, New Jersey's Drug
Policy Alliance director, told me. As in other states, the New Jersey
bill would allow state-registered smokers, and their caregivers,
limited possession: 1 ounce and up to six plants at a time, as The
Inquirer's Adrienne Lu wrote yesterday.

The Democratic takeover of Washington seems to be giving pot a nudge.
U.S. Attorney General Eric Holder said last month that he'd back off
on raiding California distributors that were legal under state law.
That has marijuana lobbyists in Sacramento hoping larger-scale
production might also be on the way. One group is even suggesting a
tax of around a dollar a joint to make drugs more welcome for the
cash-strapped state government.

Back at the Shore, State Sen. Jim Whelan (D., Atlantic) told me that
he and State Sen. Nicholas P. Scutari (D., Union) were sponsoring the
Compassionate Use Medical Marijuana Act, which the Senate passed last
month, to help sick and dying people, not create a new business.

"Obviously, someone would have to be able to grow marijuana and bring
it to market," Whelan told me. "I don't think that would be a huge
economic generator. That aspect of it has never come up." The
sponsors can't say how much marijuana that registered smokers would need.

The state's county agricultural boards are starting to show interest
in those questions, said Ed Wengryn, field rep for the 14,000-member
New Jersey Farm Bureau.

"New Jersey would be suitable, temperature-wise," for growing the
plants, he said. "How many prescriptions for medical marijuana would
there be? Would they limit prescriptions to only marijuana grown in
the state? Can we be competitive with growers in other parts of the country?

"I think it would be intriguing" for some farmers, Wengryn added.
"But because it would be regulated, you'd be inviting the government
on your farm. Farmers don't like that."

The Farm Bureau hasn't taken a medical-marijuana position, but it's
on record supporting legal restoration of the industrial-hemp business.

Hemp, once grown for its use in rope and other fiber products, was
made illegal because it's so close to the marijuana that is smoked.
Common hemp and specialized strains of marijuana "look alike," said
Wengryn. "It's why the police don't support our position. You have to
test a plant, a lot, to see which it is."

Marijuana legalization has been tried in Trenton in the past, but it
"hasn't been quite this far before," Wengryn added. "Usually law
enforcement steps in and says, 'This is just a nightmare.' Maybe they
were caught off guard this time."