CALIFORNIA SPROUTS A MARIJUANA 'GREEN RUSH'

SAN FRANCISCO -- A drug deal plays out, California-style:

A conservatively dressed courier drives a company-leased Smart Car to an
apartment on a weekday afternoon. Erick Alvaro hands over a white paper
bag to his 58-year-old customer, who inspects the bag to ensure that
everything he ordered over the phone is there.

An eighth-ounce of organic marijuana buds for treating his seasonal
allergies? Check. An eighth of a different strain for insomnia?
Check. THC-infused lozenges and tea bags? Check and check, with a free
herb-laced cookie thrown in as a thank-you gift.

It's a $102 credit-card transaction carried out with the practiced
efficiency of a home-delivered pizza -- and with just about as much legal
scrutiny.

More and more, having premium pot delivered to your door in California is
not a crime. It is a legitimate business.

Since the state became the first to legalize the drug for medicinal use,
the weed the federal government puts in the same category as heroin and
cocaine has become a major economic force.

Based on the quantity of marijuana that authorities seized last year, the
crop alone was worth an estimated $17 billion or more, dwarfing any other
sector of the state's agricultural economy.

And pot also props up local economies, mints millionaires and feeds a
thriving industry of startups -- stores that sell high-tech
marijuana-growing equipment, pot clubs that pay rent and hire workers,
chains of for-profit clinics that specialize in medical-marijuana
recommendations.

The plant's prominence does not come without costs, some critics say.

Marijuana plantations in remote forests cause severe environmental
damage. Authorities link the drug to violent crime in otherwise quiet
small towns.

Still, some lawmakers are pushing for broader legalization as a way to
shore up the finances of a state that has teetered on the edge of
bankruptcy. The state's top tax collector estimates that taxing marijuana
like liquor could bring in more than $1.3 billion annually.

On Tuesday, Oakland will consider a measure to tax the city's four
marijuana dispensaries, which the city auditor projects will ring up $17.5
million in sales in 2010. The city faces an $83 million budget shortfall,
and it expects the marijuana tax to raise $315,000.

With a recent poll showing more than half of Californians supporting
legalization, pot advocates believe they will prevail. And they say other
states will follow.

Tim Blake is the proprietor of a 145-acre spiritual-retreat center that
holds an annual marijuana bud-growing contest in the heart of Northern
California's pot-growing country.

Politicians, he says, are "going to see the economic benefits, they're
going to see the health benefits and they're going to jump on the bandwagon."

Where It's Grown

On a property flanked by vineyards, Mendocino County farmer Jim Hill grows
marijuana for up to 20 patients, including himself and his wife.

Hill's plants enjoy careful nurturing in a temperature-controlled
greenhouse. On a recent spring day, his college-age son spread bat guano
to fertilize two dozen 6-foot-tall plants.

Hill, 45, says he spent $10,000 to set up the garden. Patients receive
their drugs free in exchange for helping with his crop.

"It's kind of like living on an apple orchard," Hill said. "You don't pay
for an apple."

though marijuana is cultivated throughout California, the most prized crops
come from the forested mountains and hidden valleys of Mendocino, Humboldt
and Trinity counties -- the Emerald Triangle.

The economic impact is difficult to gauge. Authorities say the largest
grows are run by Mexican drug cartels that simply funnel money from
forest-raised crops into their bank accounts.

Still, marijuana money from outdoor and indoor plots inevitably flows into
local coffers. Marijuana increases residents' retail buying power by about
$58 million countywide, according to a Mendocino County report. The county
ranks 48th out of 58 counties in median income but, by counting pot
proceeds, could jump as high as 18th.

In Ukiah, the county's largest city at 11,000 residents, business owners
say the extra cash is crucial. "I really don't think we would exist
without it," said Nicole Martensen, 37, whose wine and garden shop is
stocked with bottles from county vintners.

Mendocino County Sheriff Tom Allman says medical-marijuana operations that
follow state and county laws will face no hassles from his department. His
deputies left intact 154 marijuana grows they visited last year, he said.

"If you're living in the boundaries," Allman said, "I'm not going to mess
with you."

Which is not to say there is no legal risk to growing, selling or buying
marijuana. Federal laws still apply, and pot dealings not deemed medicinal
are considered criminal by the state, where police made about 74,000
pot-related arrests in 2007.

Sparky Rose sits in the federal prison in Lompoc, serving a 37-month term.
Law enforcement officcials insist he is one of many who have used the
medical marijuana law as a guise for old-time drug dealing. Rose does not
disagree, although he would like to think he helped some legitimate pot
patients in the process.

A one-time Web designer, he started out in 2001making $15 an hour working
the counter at an Oakland pot club. Four years later, he was overseeing a
dispensary chain with stores in seven cities, 283 employees and sales
reaching $5 million a month.

Rose says he was making $500,000 a year before his 2006 arrest, a sum he
considers fair given the risk he assumed as the company's public face.

"While I was still in business, a lot people would ask me, 'I'm thinking
about starting a club, what advice do you have?'" he says. "And I'd say,
'The biggest warning is sooner or later, you willstart to think it's legal.'"

Even people accustomed to buying marijuana over the counter are impressed
when they visit the Farmacy, a dispensary-cum-New-Age apothecary with three
locations in Los Angeles. Decorated in soft beige and staffed by workers
in lab coats, the Venice store sells organic toiletries, essential oils and
incense along with 25 types of marijuana stored in glass jars.

During a two-hour span, the dozen or so customers who made a purchase all
bought pot products and paid the 9.25 percent state sales tax on top of
their purchases. The clubs, which are not supposed to turn a profit, call
their transactions "donations."

Allen Siegel is 74; he is dying of cancer and wants to try smoking
marijuana to ease his pain without knocking him out like prescription drugs
do. So his wife, Ina, brought him to the Farmacy for his first visit as a
legal pot patient.

"You go in there, and they have so many choices," she said.

California's "green rush" was spurred by a voter-approved law 13 years ago
that authorized patients with a doctor's recommendation to possess and
cultivate marijuana for personal use.

Although a dozen other states, including Washington, have adopted similar
laws, California is the only one where privately owned pot shops have
flourished. Los Angeles County alone has at least 400 dispensaries and
delivery services, nearly twice as many outlets as Amsterdam, the
Netherlands capital whose coffee shops have for decades been synonymous
with free-market marijuana.

California's pot dispensaries now have more in common with a corner grocery
than a speak-easy. They advertise freely, offering discount coupons and
daily specials.

Justin Hartfield, a 25-year-old Web designer and business student, founded
WeedMaps.com, where pot clubs and doctors who write "medi-pot"
recommendations list their services and users post reviews. Hartfield says
the year-old site brought in $20,000 this month, an amount he expects to
double in August.

Like just about everyone else connected to the cannabis trade, Hartfield
has a letter from a doctor that entitles him to buy medical marijuana. But
he sees no point in pretending he is treating anything more than his taste
for smoking weed.

"It is a joke," he said. "It's a legal way for me to get what I used to
get on the street."