MEDICAL POT BUSINESS GOES MOBILE

A flourishing and unregulated industry of pot delivery services is
circumventing bans on storefront dispensaries and bringing medical
marijuana directly to people's homes, offices and other locations
across the state, records and interviews show.

The unfettered delivery of marijuana through hundreds of these
services highlights how quickly California's pot industry is moving
from the shadows and into uncharted legal territory.

In newspapers and on the Internet, "mobile dispensaries" advertise a
wide range of marijuana strains and other products, such as brownies
and cookies laced with THC, the drug's active ingredient. One service
delivers organic vegetables along with medical marijuana, as part of
a "farm-direct" service.

Some operate in multiple counties, including jurisdictions where
storefront dispensaries are banned, or make local deliveries to
drop-off points, such as Starbucks parking lots or gas stations. At
least three ship to clients around the state using prescription-drug couriers.

Although delivery of medical marijuana is not new, advocates say the
growth of these services could be a game-changer in the state's pot
war, which pits law enforcement, elected officials and community
groups against dispensary owners and patients.

And these businesses could increase in popularity if voters approve
an initiative on the November ballot that would legalize pot possession.

"They're delivering the product better, cheaper, more discretely and
probably at a higher profit rate than dispensaries," said Allen St.
Pierre, director of the National Organization for the Reform of
Marijuana Laws. "These delivery services are starting to grab more ..
market share."

A question remains about whether the delivery services are legal.
Some local and federal officials say they violate the 1996
Compassionate Use Act that legalized medical marijuana in California
for qualified patients, as well as other laws. The services seem to
sidestep local regulations banning dispensaries.

"They're transporting drugs," said Tommy LaNeir, director of the
National Marijuana Initiative, which is funded through the White
House's drug policy office. "It's a transshipment operation that's
trying to bypass the ordinances that have been set up by cities and
counties. It's as simple as that."

Delivery service explosion

The exact number of delivery services operating in California is
unclear, since the state does not keep a registry of medical
marijuana distributors. In April, 758 services advertised direct
delivery of marijuana to patients on Weedmaps.com.

Those numbers have nearly tripled in the past 18 months and grown by
39 percent since February, as more counties and cities began
regulating storefront dispensaries or banning them outright,
according to Justin Hartfield, owner of the commercial listing service.

More than half the couriers who advertised in April said they were in
the Los Angeles area. Other services clustered around metropolitan
regions, such as San Francisco, San Diego and Sacramento.

In all, 129 cities and nine counties in California have banned
medical marijuana dispensaries. An additional 96 cities and 13
counties have moratoriums, according to Americans for Safe Access.
Yet, in many of these "dry" communities, pot delivery services appear
to be flourishing.

The trend has caught state officials flat-footed and unable to
pinpoint any legal guidelines that directly address the delivery of
medical marijuana by courier or mail. Sending drugs via the Postal
Service and cultivating pot for sale does violates federal law, but
marijuana growers know federal prosecutions are rare.

"Delivery services are a relatively new creature, one that has not
been directly addressed by the courts or in legislation," said Peter
Krause, a California deputy attorney general who helped write the
state's landmark guidelines on medical marijuana in 2008.

Ambiguity over legality

The state's 1996 initiative and a companion law approved by the
Legislature in 2003 granted cities and counties most of the authority
over implementing the Compassionate Use Act. But no city council or
board of supervisors has explicitly addressed delivery services,
according to Americans for Safe Access.

Senate Bill 420 signed into law by former Gov. Gray Davis during
his final weeks in office appears to protect patients from
prosecution for "possession, transportation, delivery, or cultivation
of medical marijuana" under legal limits. The law also allows
patients and their caregivers to "associate" with each other to
"collectively or cooperatively" cultivate pot for medical purposes.

To some law enforcement officials, the law is unambiguous. John Hall,
a spokesman for the Riverside County District Attorney's Office, said
his county has banned storefront dispensaries and that delivery
services are prohibited, although he could not cite a specific law or
regulation.

"It is the position of this office that based on current law, all
mobile medical marijuana operations are illegal," Hall said. Even so,
the number of couriers advertising in Riverside County has increased
from 76 to 105 since February.

In March, authorities in San Diego lost a high-profile case involving
a marijuana activist who provided deliveries to medical users.

An undercover police officer, posing as a patient with a doctor's
recommendation, took delivery of marijuana from Eugene Davidovich in
a videotaped sting operation. The jury rejected charges of illegal
possession, sales and transportation after the defense argued
Davidovich acted legally under the state's medical marijuana law. An
organic farm model

The boom in pot delivery services is particularly evident in Southern
California. Until recently, Los Angeles was ground zero in the rapid
growth of medical pot outlets, with dispensaries outnumbering
Starbucks locations along some commercial strips.

That era may be ending. In January, the Los Angeles City Council
approved an ordinance that led city attorneys to order 439
dispensaries to close. An estimated 135 will be allowed to remain if
they follow new regulations.

In the face of the crackdown, some dispensaries already have
shuttered their storefronts and rebranded themselves as delivery
services. "They tell us, 'We still want to be listed on your Web
site. We're just turning into a delivery service,' " said Hartfield
of Weedmaps.com.

In Northern California, there are fewer delivery services but some
cover large areas, spanning several counties and cities.

One new company, Mediharvest, promises to deliver marijuana to
qualified patients anywhere in the state via commercial carriers.
Mediharvest promotes its service to people who "don't want to be seen
at the store," who want high-quality pot, who don't want to support
illegal drug cartels, and who "want to change the attitude of medical
marijuana use in America."

Another new online dispensary, C420, says it will ship pot overnight
to qualified medical marijuana users at "almost any legal address in
California" and has signed up 1,000 users since its April launch.

Matthew Lawrence, a Bay Area real estate developer who created the
online service, said he will ship up to 8 ounces of marijuana per
recipient, using a network of pharmaceutical couriers.

Elsewhere, some operations are modeling themselves on organic farms
that deliver boxes of fruits and vegetables directly to homes.
Matthew Cohen, owner of Northstone Organics, pioneered what he calls
"farm-direct medical marijuana." The Ukiah-based cooperative grows
and delivers marijuana to a network of about 500 patients in nine
Northern California counties, including Sacramento.

Northstone's business has grown briskly. Six months ago, Cohen was
driving into the Bay Area twice a week to make deliveries himself.
Now he's hired workers to deliver five times a week.

"This industry is moving at lightning speed," Cohen said. "I think
more growers understand what's happening and patients are also
realizing they can get cannabis straight from the source and at a lower price."