FUMING OVER THE POT CLUBS

Has Medical Marijuana Burned Out?

The Ouster Of A Popular Medical Marijuana Dispensary By Its San
Francisco Neighbors Signals Growing Disillusionment With The Medical
Marijuana Initiative.

The unmistakable scent of burning marijuana lingered on the front
steps of San Francisco's City Hall one cool night last September.
Inside, more than 75 citizens murmured and jostled their way into the
Board of Appeals chambers, there to decide the fate of the most
popular medical marijuana dispensary in the city. At issue was the
Green Cross-by all accounts a model pot club-which had operated for a
little more than a year at the outer edge of the liberal,
dog-and-stroller neighborhood of Noe Valley. Now, it appeared that
the dispensary on 22nd Street had worn out its welcome.

Although in 1996 the neighbors voted overwhelmingly in favor of
Proposition 215, the statewide initiative that legalized medical
marijuana, the Green Cross-like the city's other 30-plus pot
clubs-wasn't exactly the result they had envisioned. (Known as the
Compassionate Use Act, Prop. 215 allows patients and their caregivers
to possess and cultivate marijuana for personal medical treatment
upon a physician's recommendation. It also protects such doctors from
professional and legal sanctions.)

As the meeting got under way, the owner of the club, a nattily
dressed young man named Kevin Reed, sat quietly in the back of the
room-far from the woman wearing a plastic pot-leaf tiara in the
second row and the man in sunglasses with a guide dog that growled
once, softly, when a stranger leaned over to pet it. Scattered
throughout the crowd were a nun, several gray-haired teachers, and a
bevy of young parents-most members of Noe Valley's Fair Oaks
neighborhood association. One by one, the neighbors stood up at the
microphone, said that they voted for Prop. 215 in 1996-and then
complained of increased traffic, noise, and crime. "Have you ever sat
outside and watched a beehive on a nice summer day?" asked one
neighbor, a retired nurse. "And watched the bees go in and out, in
and out, all day? Well, that's what happens down there." A mother of
three concurred. "It is an unfortunate fact that a percentage of
Green Cross patrons are criminals whose only intention is to resell marijuana.

It is also an unfortunate fact that criminals carry weapons," she
said. A third resident urged, "Although I voted for Prop. 215 like
all my friends and neighbors, I request that you either revoke the
Green Cross permit or move it out of the neighborhood."

They were followed by patients speaking on behalf of the Green Cross,
some of whom were also neighbors. "The Green Cross gives me the
safest place to go," said a former police officer and mother of two.
Added a middle-aged Montessori teacher: "It's not like we can go to
Walgreens and say, 'Hey, we want generic.' "

For four hours it went back and forth. Should San Francisco's Board
of Appeals, which handles permit disputes, force a legally permitted,
state taxpaying, nonprofit dispensary to move? "You have a tough job
in front of you," Lawrence Badiner, zoning administrator for the San
Francisco Planning Department, told the board. "Kevin Reed is either
the devil incarnate or an angel sent from above." The board's vice
president, Randall Knox, also weighed in. "Prop. 215 was supposed to
be the entree to how we allow this herb to be used as a medicine," he
said. "But I think it would be disingenuous if I were to say that
most of the marijuana used in this city and in this nation is used
for medicinal purposes." Through it all Reed said little, except to
add wearily, "I think most of the neighbors know I really have given
a good faith effort."

In the end, the board members voted to impose 33 new conditions to
the permit and gave the Green Cross six months to find another home.
t wasn't supposed to turn out this way, with neighborhood warfare
over medical pot. When Prop. 215 came before the voters ten years
ago, its stated purpose was to allow seriously ill Californians with
cancer, AIDS, glaucoma, chronic pain, migraines, or "any other
illness for which marijuana provides relief" to legally grow or
possess marijuana if a doctor recommended it, primarily for the
treatment of nausea or pain. (How a patient might come to possess
marijuana was left largely unspecified, though the Act did encourage
federal and state governments to provide "safe and affordable
distribution.") In a city whose large gay population had been
decimated by AIDS, it wasn't surprising that 78 percent of the voters
(compared with 56 percent statewide) focused more on how they hoped
the measure would help the terminally ill than on its fuzzy legal
parameters. "I think we can be a model for the whole state," San
Francisco District Attorney Terence Hallinan told the Los Angeles
Times a month after Prop. 215 passed.

A decade later, San Francisco contains more pot clubs within its 46.7
square miles than any other city in California.

Figures vary widely (no state agency tracks the numbers), but there
may be as many as 200 in the state. "Now either San Francisco has a
lot of sick people," says Martin Halloran, a sergeant with the
narcotics division of the San Francisco Police Department, "or this
has gotten out of hand." More than 8,000 people have medical
marijuana cards in San Francisco alone; doctors who specialize in
medical marijuana recommendations take out ads in the back of
alternative weeklies (one with the memorable phone number
1-888-POTDOCS). Meanwhile, 20 cities have banned dispensaries
altogether. Cities that haven't addressed regulation issues are
seeing an influx of clubs, and many of the same people who voted for
the ballot initiative are growing disillusioned with its consequences.

Part of the problem is nomenclature: Pot club just isn't a term that
evokes white coats and pharmacies. And even though state law requires
California dispensaries to operate as nonprofits, their proprietors
often refer to them as "companies" and use phrases such as "moving
product" that can make even their supporters uneasy. But many of the
objections stem from the mistaken expectation that medical marijuana
would be dispensed, like Vicodin, by licensed pharmacists in retail
stores. "I thought it would be in Walgreens," is a common statement
among the disillusioned, although drug policy experts say this view
is hopelessly naive.

After all, under the federal Controlled Substances Act of 1970 (21
U.S.C. ?UKP801-971), marijuana, like heroin, is a Schedule I drug
with no accepted medical use-illegal in every state.

Until that changes, no national pharmacy is likely to get into the
marijuana business; California's patchwork quilt of local regulations
is a response to that basic fact. "Would I vote for it again,
[knowing what I know now]?" ponders Green Cross neighbor Marvin
Edwards. "If it turns out like I'm seeing it, I don't think so."

When the Green Cross first opened its doors almost two years ago,
just two blocks from my house, it generated little controversy. But
like local views about medical marijuana itself, a lot has changed at
the dispensary since then. I've followed the fortunes of the Green
Cross since its beginning, and though I live nearby, I never joined
the neighborhood association in calling for its ouster.

In fact, I actually enjoyed pointing the club out to people as
evidence that my tree-lined, Victorian-studded patch of San Francisco
was less staid than it seemed.

When the store appeared in July 2004, at a corner known for its
biannually reincarnated restaurants and shortlived clothing
boutiques, no one really noticed.

With no sign and little else to indicate what it was, the Green Cross
quietly operated under the radar for about six months.

In January 2005 I described it in San Francisco magazine as the first
upscale medical marijuana dispensary in the city. Kevin Reed, the
owner, had as his lofty goal changing the image of medical marijuana
outlets from one of seedy clubs to safe, inviting boutiques anyone
would be comfortable having around.

Considering that my neighborhood is even more overwhelmingly
pro-medical marijuana than the rest of San Francisco (in 1996, Prop.
215 received a "yes" vote from 88 percent of Noe Valley voters), it
should have been a comfortable fit. Then came the sign above the
door-a neon green cross-and the pot plant growing in the window.

Customers began showing up in droves, not all of whom looked like the
young professionals going into the restaurants nearby.

That's when the complaints of noise, smells, and "unsavory"
characters began. Of course, if you are a patient, none of that
matters; what was inside the store was worth it all.

I made an early March visit.

Once past the security guard checking medical cannabis cards at the
door, the Green Cross seemed like a hip place to be ill. Upbeat
electronica bounced off lipstick-red walls, a plasma-screen TV showed
music videos, and a clock above the display counter read "424ever"-a
reference to 420, old-school pot lingo for "time to smoke" and a
generic code word for pot. A whiteboard on the wall listed the prices
for cannabis by weight: 1.75 g = 1/16 = $20, 3.5 g = 1/8 = $40, 28.5
g = 1 oz = $300. (One ounce was the limit a patient could purchase
per visit; customers could pay by Visa or MasterCard if they liked.)
Four stylish "budtenders," three of them women, offered advice from
behind a long glass counter to patients choosing among
loose-tea-style jars of pot with names like "Papa Smurf" and "Silver
Haze," or Ghirardelli pot brownies and gluten-free cookies bearing
the cheerful label "Incredible Edibles." Tiny lamps with violet
shades hung in the gloom over the display case; on the back wall, the
dispensary's cross logo was outlined in green lights. But for all the
dim lighting and hipster bar music, both patients and staff were
brisk and professional in their exchanges.

Jason, a 22-year-old with cancer and guarded brown eyes, said he came
in once every two weeks to buy a type of cannabis called sativa, a
strain said to relieve depression. Leticia, a 27-year-old neighbor
and dental-office employee with severe insomnia, came in twice a week
for an eighth ounce of the same. A third patient, a 60-year-old
neighbor who declined to give his name, came once a month for an
ounce of a different strain, indica, to treat a seizure disorder.
Patrons had a five-minute limit in the store; there was no smoking,
and not a lot of socializing. They were in and out with their
purchases, and with up to 300 people a day visiting the club, the
entryway resembled a revolving door.

With a membership of 4,200 people (on their best day, the budtenders
sold $45,000 worth of pot products), the Green Cross was exactly what
many patients wanted-a clean, safe place to buy marijuana that wasn't
hidden away in a bad neighborhood. Were all the patients really ill?
The range of illnesses for which doctors can legally recommend pot is
expansive, including not just diseases but any persistent medical
symptom that a physician believes is disabling to a patient. If a
number of the city's card-carrying medical-marijuana patients
happened to be young men who, as Central District police station
Captain James Dudley put it, "look like they could beat me in just
about any sport," it's not the fault of the pot clubs.

There's nothing about oversight of physicians in Prop. 215 or the
subsequent Senate Bill 420 (Health and Safety Code ? 11362.7-8),
which in 2003 authorized collective and cooperative cultivation
projects but never mentioned dispensaries.

I was curious whether the Green Cross patients really fit Dudley's
stereotype, and whether their skin tones lent credence to charges
that racism might underlie some of the neighbors' complaints. So one
Saturday afternoon in March I sat in the coffeehouse diagonally
across the street from the Green Cross and watched. (Because of
restrictions imposed by the Board of Appeals on the club-short hours
on Saturday (noon to 5 p.m.) and none on Sunday-Saturdays are
particularly busy.) By my count, 43 people entered in one hour. They
were, in fact, mostly young men in hooded sweatshirts or ball caps
who looked to be under age 35. About 40 percent also appeared to be
nonwhite-definitely a higher percentage than among the clientele
entering, say, the Irish pub next door. Wherever they were parking,
it wasn't in front of the dispensary-everyone I saw approached on
foot. Although the corner is zoned a neighborhood commercial cluster
(NC-1) district, meaning that establishments there exist primarily
for the use of the neighborhood, sheer numbers seemed to suggest the
club's customers were coming from far and wide, as critics
maintained. Still, I had to wonder whether the extra foot traffic
would have drawn complaints if instead of pot buyers the pedestrians
were gourmands converging on a rare chocolatier.

By early March, none of the ostensible concerns the Fair Oaks
neighbors had complained of-increased crime, doubleparked cars, and
smokers' fumes-seemed relevant anymore.

After the Board of Appeals hearing last fall, the Green Cross limited
its hours, ramped up security (deploying 17 cameras and at least two
security guards during business hours), and offered incentives to
patients who came by public transit and didn't linger.

A lieutenant in the Mission District police station said she hadn't
heard any complaints from neighbors about nuisance crimes in many
months, and a look at the crime data for the preceding three months
showed that the closer you were to the Green Cross and its expensive
security cameras, the less likely you were to be a victim of any
serious crime-drug related or not. That left no problems but the
clientele and the nature of the place itself.

Owner Reed had fought to run a model dispensary, but in the end the
Green Cross found itself ensnared by tensions intrinsic to the business.

Unlike many of the medical marijuana advocates at public rallies,
Reed looks less like a pothead than like the young office manager for
an architecture firm that he once was. Years before that he owned the
Pit Stop Cafe in Eight Mile, Alabama, a diner specializing in
Southern comfort food and successful enough that in 1997 the Mobile
Register's food columnist wrote: "The plucky 23-year-old has an
entrepreneurial spirit as fresh as his biscuits." Today Reed still
carries a faint Alabama drawl, and on most days he wears a crisp
dress shirt of muted tones.

On some days he also wears stylish prescription glasses with brushed
aluminum frames.

As an advocate with a stake in the outcome of medicalpot policy, he
keeps an eye on appearances, and says he doesn't believe smoking weed
on the front steps of City Hall is "anything but counterproductive."

With his thin build, habitual smile, and slight limp (from a car
accident that left him in pain and a medical marijuana user when he
was 18), Reed exudes a gentleness at odds with the controversies that
often surround him. "I thought I was doing it right," he says with a
sad smile. "I thought I would be the last one standing." At the Green
Cross he offered health insurance to his employees, kept current on
permit applications and sales-tax payments to the state, and followed
the rules for nonprofits-in short, he ran his dispensary as
legitimately as possible and exactly the way the city asked him to.
"I spent way too much of my time and energy just to open the door and
sell weed," he says. "That sounds so illegal, doesn't it? Who the
hell wants to tell somebody, when they ask you what you do, 'I sell weed'?"

Instead, Reed had plans: He would start a Walgreensstyle chain of
dispensaries, making medical marijuana respectable by bringing it to
safe neighborhoods around the city and state.

No banks were willing to provide loans for pot clubs, so in July of
2004 he used a friend's capital to buy two candy jars' worth of pot
from another dispensary and started selling small quantities of the
stuff more cheaply in the Noe Valley locale. "It was the only way I
knew to start a business from the ground up when you're in
competition with 40 other stores," he says. After a few months,
growers began bringing in backpacks full of weed (one medium-size
backpack can hold about four pounds, or $16,000 worth of pot) from
their own gardens.

Over time the number of jars in the shop grew to 50. Reed started
keeping an Excel spreadsheet listing growers (by first names only) to
whom he owed money-amounts that could range from $12,000 to $49,000
per batch, which he preferred to pay by check rather than cash.
Nothing got stale; his experience in the food industry came in handy
for moving the product along before it grew mold. "Just like a
grocery store, it has to have expiration dates," he says.

In fact, aside from the two black storage lockers full of pungent
weed and an excellent security team, the nuts and bolts of running
the Green Cross weren't that different from running any other small business.

Reed used Quick- Books accounting software, held power meetings in
the mornings next to an employee schedule color-coded by name, and
kept an inspirational calendar on the office wall with such phrases
as "Have great dreams and dare to live them" written in cursive above
a rocky coastline.

He maintained liability insurance and paid himself modestly ($35,000
in 2005); he even kept the sidewalk swept on his corner. At the
height of the Green Cross's success he employed 20 people, including
five security personnel.

Last year, he paid almost $200,000 in sales and payroll taxes to the
state. Although he continually feared a raid and arrest by federal
authorities (neither happened), as far as local matters were
concerned he believed he was operating by the book. "I mean, almost a
fifth of a million dollars went back into the system out of my
store," he says. Still, he understood his risks: "I don't by any
means fool myself into believing that local support could help me on
a federal case."

Reed just hadn't counted on grief from the neighbors: "Of course they
all voted for Prop. 215, and they all believe [medical marijuana]
should be legal-but only for them!" he says, his drawl growing
stronger. "They see a young guy who don't look sick, but there's
nothing I did to give that boy a card. There's nothing I can do to
take that boy's card away from him. And that's none of their business anyway.

Who knows whether that boy is a caregiver, or a pothead, or a
recreational user-who knows what that boy is. He could have AIDS and
look like the healthiest boy walking around in the world.

I don't get to see his doctor's note!" As the Green Cross's six-month
move-out deadline approached this spring, it was clear it would take
more than Reed's vaunted pluck (and the real estate agent personally
referred by San Francisco Supervisor Bevan Dufty) to get the business
installed in a new home.

At the end of 2005, San Francisco enacted zoning regulations for
dispensaries so strict that pro-medical marijuana activists such as
Rebecca Saltzman of Americans for Safe Access consider them a de
facto cap on new pot clubs. She expects a number of existing clubs to
close within a year if they can't meet the stringent new planning and
public health standards, such as wheelchair accessibility. Though
Saltzman says that the number of dispensaries across the state is at
an all-time high-estimates range from 127 to more than 200-so is the
number of moratoria and outright bans on such outlets by cities
including Fresno and San Rafael. (In January, the San Diego County
Board of Supervisors even went so far as to sue the state, arguing
that Prop. 215 is preempted by the federal Supremacy Clause, though
that theory has gained little traction.)

Perhaps most telling about San Francisco's new regulations are the
areas they place off-limits to new dispensaries-neighborhoods similar
to mine. "Ultimately," says Reed, "when you close down the
GreenCross, you're sending several thousand people back onto the
streets to get medical marijuana-and the only way I believe marijuana
is a gateway drug to other drugs is if you send them to Crackville,
USA, to buy it-or you're sending them back to [clubs] where it feels
more like a criminal element."

Still, Reed admits that dispensaries aren't the ideal solution.

For one thing, they keep getting raided by the federal Drug
Enforcement Administration-19 in California in the latter half of 2005 alone.

In its Tips for Would-be Cannabis Providers, the pro-legalization
group California NORML notes that neither Prop. 215 nor SB 420
"provides a green light for sales of cannabis. Those dispensaries
that are selling marijuana over the counter accordingly do so at the
tolerance of local authorities."

At a time when the tolerance of local authorities even in pro-pot San
Francisco seems to be wearing thin, many patients would appreciate
new delivery options. "Maybe in ten years we won't even need to
smoke, we'll be able to get everything we need out of our little
[marijuana] tincture sprays," says Reed. Indeed, the FDA has approved
one synthetic THC medication, Marinol. But not everyone believes
Marinol works, and for those who don't, dispensaries are one of the
only quasi-legal ways to obtain the dried herb. A decade ago
California became the first state to legalize the possession of
medical marijuana (ten other states have followed), and since then an
estimated 200,000 Californians have become medical marijuana users.

But last summer the U.S. Supreme Court decided Gonzales v. Raich (125
U.S. 2195 (2005)), holding that the federal government can regulate-
and prohibit-the private growth of marijuana for personal use even if
it's authorized by state law. (On March 27, Randy Barnett, attorney
for Angel Raich, one of the original respondents in the case,
appeared before a threejudge panel of the Ninth Circuit, raising
constitutional challenges to the federal government's complete
prohibition of her medical cannabis use.)

"The remaining controversy, if there's really any controversy," says
University of Southern California criminal law professor Charles H.
Whitebread, "is about whether any federal agents will in fact take
out after sick people." And if potsmoking patients aren't protected,
dispensaries are positively an invitation for federal raids.

"Pot clubs are illegal from beginning to end," says Marsha N. Cohen,
a professor at the University of California Hastings College of the
Law. "They're in total violation of federal law. You cannot possess,
buy, or sell marijuana, period. The last time I looked, we were still
in the United States."

Mark A. R. Kleiman, a professor of public policy and director of the
Drug Policy Analysis Program at UCLA, agrees. "Prop. 215 didn't
provide for dispensaries. It didn't provide for Walgreens either.

If you read the law, what it says is that if you're a patient who is
helped by marijuana and your doctor has recommended it, you can grow
it and possess it, or your primary caregiver can do it on your behalf.

And the notion that these dispensaries are somehow the primary
caregiver for hundreds of people at a time is like a bad joke."

Still, that doesn't mean Prop. 215 failed. "Prop. 215 worked just the
way Prop. 13 worked-it got passed, which is what it was designed to
do," says Kleiman. "Has it given us a sensible system? No. Could we
have a sensible system, given that the drug is illegal nationally?
Probably not." As for the next ten years, any break in the
state-federal impasse will have to come at the federal level. "The
right thing to happen," says Kleiman, "would be to get the clinical
research done and get cannabis rescheduled, which it probably would
be if the research were done." In fact, a 1999 report by the
Institute of Medicine, part of the National Academy of Sciences, has
already indicated some legitimate medical uses for marijuana-which
suggests that the "lack of research" argument is a red herring.

What's really holding up the rescheduling process is politics. "The
feds have their heads in the sand," says Cohen. "They seem to think
that if they California Lawyer June 2006 61 Pot Clubs,continued from
page 30 just don't look, this will go away. Instead, what they have
is an endless battle with the states that have some kind of medical
marijuana law."

But until the political battles at all levels play out, patients like
those who went to the Green Cross are on their own. "It was just
politics that closed me down," says Reed, after losing his campaign
to keep the store open on 22nd Street. "And politics will be the only
thing that stops me from opening the next one. Because, by the book,
everybody says that I'm the best." ays after the Green Cross closed,
Reed, on edge, picks through the empty dispensary. He's ready to
leave. Echoes ricochet off the bare walls, and with no drapes over
the windows the sunlight filters in, exposing the peeling paint, the
dust on the hanging lamps, and just how small the space really is-350
square feet. The sidewalk outside the dispensary is as bare as its
interior; one woman slowly pushes a stroller past the "FOR LEASE"
sign taped inside the window.

The adjacent dispensary office has already been rented out to a
clothing boutique.

But there may be life for the Green Cross after all, in another
location, in a few months.

Reed recently found a landlord in the former beatnik sanctuary of
North Beach willing to rent to him, and angel investors ready to loan
him money to renovate the new place, which he describes alternately
as a "shell" and a "disaster." The landlord, like the investors, has
medical marijuana patients in his family. But although Reed hurriedly
signed a lease, nothing is set in stone-now he has to navigate an
entirely different set of neighbors, and there's no guarantee he'll
be issued a permit.

Today, locking up, he's optimistic but nervous. "Who's to say there's
not a federal judge who lives behind the place?" he wonders aloud.
"Who's to say there's not a DA living there who won't like it?" His
worst fear is that pro-medical marijuana neighbors from the Fair Oaks
association will follow him across town to complain at the public
hearing on permits for the new locale. "But that would just be evil,"
he concedes. If all goes well, he hopes to move into the North Beach
site over the summer-making the Green Cross the first dispensary to
open in a new location under San Francisco's new, stringent
regulations. But after almost two years of strife in Noe Valley, Reed
shrugs, laughs nervously, and steps out into the windy San Francisco
day, locking the door to the former Green Cross behind him. "This has
all been a huge gamble for me ever since I started, just to try to help people.

And here we go again," he says. He sighs. "Look, here it is ten years
later [after Prop. 215 passed], and there was actually somebody doing
it right and by the book. If I can't open my doors again, then I have
to think America's not quite ready for medical marijuana."