POT FARMS BRANCH OUT IN LOS ANGELES

Indoor Crops Thrive Thanks to Favorable Law.

Despite L.A.'s recent and well-publicized crackdown on pot shops,
another side of the industry is thriving: the growers.

With state law encouraging shops to grow their own marijuana rather
than get supplies on the black market - often from Northern
California - demand is rising for pot grown in small indoor
facilities across Los Angeles County.

There are no official statistics on the number of pot growers in the
region, but dispensary operators estimate the number to be in the
thousands - and rising. Hundreds have signed up for classes teaching
growing techniques.

What's more, overall pot demand has remained strong as customers of
the closed shops have migrated to home delivery services or to the
remaining dispensaries.

One local grower, Matthew Cohen, who owns the Natural Way dispensary
on Pico Boulevard east of Fairfax Avenue, said he's been paid as a
consultant to help about 140 people set up small-scale pot farms in
their homes, most of them in the last two years.

"You could go to the roof of my store with a nice baseball and start
hitting apartments around us where people are growing marijuana,"
Cohen said. "They're doing it because they want to pay their
mortgages, or they want to pay for their kids' school."

Indeed, there is good money to be made.

A skilled grower with as few as six plants can harvest about a pound
of marijuana a month. Collectives pay roughly $2,000 to $4,000 per
pound, allowing even small growers to make a healthy side income of
$25,000 to nearly $50,000 annually. Large growers, of course, can
make much more.

The rise of the growing industry has mirrored the rapid establishment
of pot shops and delivery services in Los Angeles. It also presents
similar obstacles to regulation while operating under comparably murky laws.

The initiative that legalized medical marijuana in 1996 did not
address cultivation. But in 2003, the Medical Marijuana Program Act
passed by the state Legislature allowed a patient to possess six
mature plants and allowed "collective, cooperative cultivation projects."

Under one interpretation of the guidelines, one person supplying 10
collective members would be able to grow up to 60 plants. However, in
January, the state Supreme Court struck down the six-plant limit as
unconstitutional, creating a gray area in regard to cultivation.

Most collectives simply suggest growing no more than 99 plants, to
avoid a federally mandated five-year minimum prison sentence for
people caught with more than that amount. But some collectives have
stretched the law.

Last October, the City Attorney's Office of Los Angeles sued the
Eagle Rock collective Hemp Factory V for unlawful marijuana sales.
During a deposition, the dispensary operator said that he and six
other growers were responsible for growing for as many as 500 to 600
members, which authorities charged was illegal.

But Assistant City Attorney Asha Greenberg said her office, swamped
with illegal pot shop cases, has not directly prosecuted collectives
for growing violations. Instead, unlawful sales have been the primary
focus, with violations for cultivation a secondary issue once a case
is filed. That was how the Hemp Factory V case proceeded.

"At so many of these places, the members are not collectively
cultivating marijuana," Greenberg said. "They're either getting it
from outside sources or there are a few people growing for hundreds
other people."

Expertise

When Cohen opened Natural Way in 2006, he got his marijuana trucked
down from Northern California's Emerald Triangle - the nickname given
to the state's hub of marijuana production in Mendocino, Humboldt and
Trinity counties - despite the questionable legality of it.

But two years ago, spurred by the recession and guidelines issued by
the California attorney general in 2008 that clarified that patients
could grow their own marijuana, members began coming into his shop
wanting to sell home-grown pot.

In 2009, the dispensary began growing its own plants. Today, the
collective's 2,300 members are supplied by a combination of 75
on-site plants and about 60 patient growers, who are paid roughly
$3,000 per pound, depending on the quality.

"Two years ago, I bet you 80 percent of it came from NorCal; today,
almost none of it," said Cohen, standing next to several dozen small
plants bathed in grow lights.

Cohen said the local growing industry gradually expanded because when
the first pot shops opened in 2005 there wasn't a base of members
skilled in growing pot.

"It takes time. A lot of shops didn't have growers at first," he said,

Sunny Chan, co-founder of the medical marijuana delivery service Good
Leaf Collective, grows about three dozen plants in commercial
warehouse space rented from a family member.

He declined to identify the exact location, how much he produces or
the price received from the collective. But he said he is one of
about 40 members of the 80-member service who grow their own
marijuana and sell back extra.

"Most of the people I know that do grow medicine have their own jobs
and just grow a little for themselves. And anything extra they share
with the collective for some compensation," said Chan, adding that no
one's quit their day job yet but "you definitely could."

Chan has spread his knowledge, teaching a cannabis cultivation class
at Pasadena's Medical Cannabis Caregivers Directory, which offers
training programs for aspiring growers and collective operators.

A former air-conditioning and heating contractor, Chan has expertise
in setting up electrical wiring for automated hydroponic systems, in
which marijuana plants are grown in water rather than soil. More than
150 people have taken Chan's class in the eight months it's been offered.

It's relatively easy and inexpensive for first-time growers to get
started. A home-grow operation can be set up for as little as $1,000,
though the system Chan teaches costs about $3,000, and can include
bells and whistles such as automated fire extinguishers. Clones, or
young plants, can be bought for $10 to $30 each, with seeds going for
less. Recurring costs also are low, relative to the pot's selling
price. Electricity and nutrients can amount to only $150 per month
for six plants.

The growing industry is even attracting outsiders. Oaksterdam
University, an Oakland-based school founded in 2008 that trains
dispensary operators and growers, currently enrolls about 180
students per semester in its L.A. branch, said campus manager Carrie Harger.

"Some people are interested in growing for themselves, some just in
learning more about cannabis and doing it legally because they don't
want to get into trouble," Harger said. "A lot of mom-and-pop
cultivators are growing for themselves and maybe one or two other people."

Great Indoors

Local growers such as Chan champion indoor cultivation, which they
claim allows for more consistent results.

With names like Blueberry Kush or Thai Skunk, today's indoor strains
promise exotic flavors and specific highs. It's a long way from the
pot that was smoked in college dorms just a few decades ago. Today's
strains have many times the level of THC, the active ingredient that
produces the high and is said to have medical uses, such as relieving
nausea from chemotherapy.

In fact, the demand for marijuana grown indoors has contributed to a
drop in prices for some of the pot grown in the Emerald Triangle,
much of which is grown outdoors.

"There's a feeling that the quality of indoor pot is better, and
certainly they come up with more reproducible and reliable strains
which seem to have more of a brand cache to it," said Dale Gieringer,
California director of the National Organization for the Reform of
Marijuana Laws (NORML), a group that advocates marijuana legalization.

"A lot of the outdoor growers from Northern California are talking
about how difficult it is to unload pot in the medical market.
They're selling less of the total pot sold in Los Angeles," Gieringer said.

Nobody knows how many collectives are growing their own marijuana
locally rather than obtaining it from up north or off the streets.
Estimates by the collectives themselves range from as high as 95
percent being home-grown to less than half. But most agree that the
trend is pointing toward more local growers.

Michael Backes, a board member of the Cornerstone Research
Collective, said the Eagle Rock collective has about 20 patient
growers for more than 1,000 registered members, although only about
300 are active members.

"When we first opened up we had people roll in with big bags from
Northern California trying to sell us meds, and honestly we would get
four to five calls a week from people," he said. "We get maybe one or
two a month, tops, now."

Cornerstone's operators plan to move its offices elsewhere in the
next year, and to begin growing on-site at that point.

Murky Law?

Meanwhile, the growers continue to operate under the threat of
possible seizure, though these days that seems unlikely given the
murkiness of the law.

Greenberg maintains that the buying and selling of marijuana between
growers and collectives is illegal, saying, "If you have a seller or
buyer, I don't think that's collective cultivation. I think the whole
concept of a collective or cooperative is everything has to be pooled."

But she also acknowledged that there is "no hard and fast law as far
as how a collective would operate." Indeed, much of her stance has
not been tested in court.

Growers have not been explicitly barred by the courts from belonging
to and selling to multiple collectives, or from belonging to
collectives in more than one county (though the city's June 7 medical
marijuana ordinance prevents membership in more than one collective).
State law also allows growers to be reimbursed for their costs, and
courts have not ruled whether this applies to their labor or how much
that labor is worth.

Another issue is that law enforcement has bigger concerns, including
large growing operations in California's national forests. It's
believed the majority of marijuana produced there are for street sales.

"Most of the raids that we do have to do with large marijuana
groves," said Steve Whitmore, spokesman for the Los Angeles County
Sheriff's Department. "What the state law allows for is infinitesimal."

Indeed, authorities have their hands full. In 2009, total marijuana
seizures in the county hit 340,187 plants, more than four times the
level of 2008. At least 150,000 were found in large plots in the
Angeles National Forest that in some cases may have been operated by
Mexican drug cartels.

However, Roger Morgan, executive director of the Coalition for a Drug
Free California, said the vast number of small-scale growers is
becoming a problem in itself.

A study by NORML in November estimated there are 100,000 to 200,000
medical marijuana patients in the county, buying $400 million to $800
million worth of pot annually.

"The proliferation of grow sites has really gotten out of hand," he
said. "Let's say you're growing 10 plants. That's the equivalent of
12,000 joints. What are you going to do with the excess? This doesn't
limit a black market, it actually creates one. There's just too much."

Bill Leahy, general manager of the Farmacy, which has storefronts in
Westwood, Venice and West Hollywood, disputed the idea that
collective growers are mostly out to make money. He said hundreds of
the collective's roughly 5,000 members are growers.

"It's a lot of work. You have to go around daily to each plant and
care for it and look for bugs, look for what's happening," he said.
"I talked to one grower and when it's all said and done he makes
about $18 an hour."

Whether growers are making big or small money, dispensary owner Cohen
said the reality for law enforcement is that the industry has spread
throughout Los Angeles.

"Let's be quite honest: Nobody wants to roust somebody who's owned a
home for 15 years in the neighborhood that's growing 15 or 20 plants
of pot," he said. "There's just so many of them now."