COUNCIL AND CANNABIS COLLECTIVES BRACE FOR SHOWDOWN IN SAN JOSE

When the San Jose City Council takes up a thorny proposal Tuesday to
regulate the city's burgeoning crop of cannabis clubs, the
mind-altering effect that drug has on politics will likely be evident
even to the most sober local legislators. And with a statewide
referendum on legalizing marijuana coming in November, whether
council members like it or not, they may be planting the seeds for a
day when weed shops are a leading municipal cash crop.

The world of medical cannabis collectives was rocked last week when
the initiative that would allow personal use of the drug qualified
for the ballot. That vote came just as local dispensaries are
battling to prove that their members are respectable, taxpaying,
law-abiding businesses, of which the city and its neighborhoods need not fear.

In fact, following a recent dust-up with the city's code enforcement
division - which sent threatening letters to the landlords of 20
dispensaries - the collectives formed a kind of super-collective to
lobby the council. Since then, it has:

* Urged the City Council to impose a special tax on them.

* Begged for an ordinance strictly regulating their operation.

* Informed its 16-club membership that "pot" and "marijuana" are
deemed "incorrect terms," while the more politically correct
"cannabis" is favored.

With the council facing a complex set of legal issues and a
potentially controversial vote, Councilman Pierluigi Oliverio said
that regulating medical marijuana could help the city's budget
shortfall through the liberal application of "sin taxes."

Many of the nearly 50 cannabis collectives that have sprouted in the
city over the past eight months are located in Oliverio's district.
He called the proposal to legalize recreational use "a gift to the
cities" because of the potential financial windfall.

Former prosecutor Sam Liccardo, who represents downtown's District 3,
is equally insistent that no restriction be placed on the number of
cannabis collectives. But Liccardo doesn't think the city can make
the problems that accompany marijuana use disappear in a cloud of
taxes. His view of how to deal with the dispensaries is "... complicated.

"I have no problem with taxing those that are legally operating
here," Liccardo said. Then he struck a slightly more ambivalent note.
"But, you know, we don't tax hit men. I don't mean to compare a
cannabis club to homicide or anything. But you don't tax undesirable
activities; you tax activities that you think are lawful and should
be supported."

Liccardo says the council's options range from doing nothing to
imposing a moratorium on new collectives, but he prefers a middle
way: regulation that keeps them out of residential neighborhoods.

The vast divide between the city's current posture on cannabis clubs
and the real world is highlighted in a memo prepared for the council
by City Attorney Rick Doyle. In it, Doyle proposes that San Jose
continue to follow federal law - under which marijuana is still
illegal - while ignoring the state law permitting the sale and use of
medicinal cannabis. He suggests that glaucoma and cancer patients who
use cannabis grow their own, as they would "tomatoes and roses."

"It's true that the citizens of San Jose can grow roses and tomatoes,
and that the medical cannabis patients can grow cannabis," harrumphed
James Anthony, attorney for a group of the city's cannabis
dispensaries. "But that doesn't obviate the need for grocery stores,
produce markets and flower shops. Nor does it obviate the need for
access to medical cannabis through nonprofit storefront collectives."

Brand Names

It hasn't helped the credibility of the cannabis collectives that
some of the most popular strains of their "medicine" have names such
as Maui Wowie, Afghan Diesel and the sinister-sounding Green Crack.

"Whoever came up with 'Green Crack' should be shot," said James
Suner, a director of San Jose Patients Group on The Alameda.

At the spacious Harborside Health Center in North San Jose, which
opened seven weeks ago and was promptly served with a
cease-and-desist order from the city, operator Steve DeAngelo rails
against an "uncontrolled explosion of inappropriate and unsafe
medical cannabis dispensaries." Harborside bristles with security -
including a metal detector and biometric locks on every door - but
maintains a sunny feel.

"You go in that place," said a startled Oliverio following his visit
to DeAngelo's Oakland operation, "it looks like a junior college."

DeAngelo, 51, more nearly resembles the popular image of a
middle-aged pothead, with braided gray pigtails emerging from his
black fedora, and a voice made husky by huffing too many seeds and
stems. He said he "met" cannabis when he was 13. "And on my first
encounter," DeAngelo said, "I knew that it was a good plant, not an
evil plant."

That meeting aside, when DeAngelo speaks as leader of the Medicinal
Cannabis Collectives Coalition, he sounds more like a member of the
local Rotary Club than a character from a Cheech & Chong movie. And
despite his belief in the benefits of marijuana and California's 1996
doobie-blazing legislation, Proposition 215 - the so-called
Compassionate Use Act, upon which this year's ballot initiative seeks
to build - DeAngelo opposes the bongful of happy smoke in the
direction of recreational cannabis consumers.

Trouble Spots

"It's put me in an uncomfortable position," he said. "After a
lifetime of proposing radical social change, I'm now a moderate."

One reason many medicinal cannabis dispensaries have so eagerly
embraced regulation is to distinguish themselves from "lemonade
stands" such as the Purple Elephant at 14th and Santa Clara streets,
where neighbors have reported to Liccardo's office that the vast
percentage of "patients" are young adult males.

"The club is duping people," said Julie Engelbrecht, who lives next
door to the dispensary's parking lot, where a security guard stands
watch day and night. "There's a lot of activity going on that's more
like organized crime than dispensing marijuana to people in need,"
she said. "It just doesn't feel right."

Engelbrecht said the building used to house a massage parlor, about
whose actual business purpose she and her husband were dubious. But
the Purple Elephant has made them almost miss the place. "She didn't
have as many clients, they didn't make as much noise, and we weren't
as nervous," Engelbrecht said.

One way to avoid further problems in residential areas if
recreational pot is legalized, DeAngelo said, would be to turn
already regulated medical dispensaries like his into multiuse
distribution centers.

"If the city saw fit to instruct us to serve all adult Californians,
then we could do that," DeAngelo said. "A lot of what we're hearing
is, 'The initiative is coming, let's just wait until we see what
happens.' But if they do that, the threat of uncontrolled
proliferation becomes greater if absolutely no regulation is in place."