IN CALIFORNIA, A DIFFERENT DRUG WAR IS BREWING

Issue Is Whether To Curb, Legitimize Shops That Sell Medical Marijuana

SAN FRANCISCO - Kevin Reed has a broad smile as he watches a stream of
customers - as many as 300 a day - examine the neatly displayed
merchandise at his Green Cross medical-marijuana dispensary.

Several dozen large glass jars, stuffed with green buds and labeled
with names such as "Juicy Fruit" and "Wonder Woman," sit on the
counter in the narrow San Francisco shop that shares the block with a
hair salon and Irish bar. An extensive price list on a large white
board starts at $40 for an eighth of an ounce.

Mr. Reed and the city's 40 other pot-club operators are at the center
of a raging debate over who, if anyone, should regulate them - a
subject that grew hazier in June when the U.S. Supreme Court ruled
that medicinal-marijuana laws in a dozen states including California
do not protect users or suppliers from federal prosecution.

On one side of the regulation debate are critics who say strict rules
are needed to prevent further proliferation of clubs in a city where
they already outnumber Burger Kings and McDonald's combined. Law
enforcement officials have called the unregulated operations "a great
lie" and earlier this summer raided three clubs, alleging illegal
drug-dealing and money-laundering. On the other side are advocates
suspicious of any oversight, fearing it will aid federal
prosecutors.

Other advocates in the Bay Area and beyond are closely watching the
outcome, hoping new regulations will serve as a model for protecting
patients' access and deflecting federal interference with
medicinal-marijuana laws.

Not surprisingly, the debate is especially vigorous in the city where
the medicinal-marijuana movement got its start more than a decade ago.

"This is where it was born, and we have to protect it," said San
Francisco Supervisor Ross Mirkarimi, a longtime proponent of marijuana
decriminalization who has written 60 pages of proposed new rules aimed
at driving unscrupulous operators out of town.

Seeking to legitimize the clubs as businesses, Mr. Mirkarimi is
proposing that the clubs hold a business license, do background checks
on employees, and keep accurate accounting to prove to health
officials that they are not generating "excessive profits."

Mr. Reed, a 31-year-old former mobile-home salesman from Alabama,
would seem an unlikely supporter of such rules. He uses marijuana to
treat back pain from a car accident and decided last year to open his
own dispensary - after being convicted of a misdemeanor for growing
marijuana in his San Francisco apartment. His parole papers explicitly
say he may work at such a dispensary.

His customers on a midweek afternoon include an ill woman and her son
from Marin County, Calif., a San Francisco Mission District artist
with HIV/AIDS and a 25-year-old who says smoking dope relieves back
pain and stress after his day on the job cleaning carpets. (Mr. Reed's
security crew won't let anyone in the door unless they have a San
Francisco health department card that indicates marijuana use has been
recommended by a doctor, but he admitted to much looser rules in the
past.)

And, as might be expected in San Francisco, neighborhood complaints
also are a major factor behind the new rule proposals, including
controlling traffic, litter and the wafting of odors.

A surge in business has made for unhappy neighbors of the Green Cross,
which is fighting attempts to shut it down. Mr. Reed has hired a
security crew that doubles as parking attendants, installed
ventilation systems, banned use of marijuana on the premises (except
by the staff), and got a land-use permit.

"I want to be treated like any other business," said Mr. Reed, who
pays sales tax to the state and provides health insurance for his
employees. He says he runs the Green Cross as a non-profit and pays
himself about $65,000 a year.

After an embarrassing incident last spring, San Francisco Mayor Gavin
Newsom is on board for new regulations, too.

In March, a dispensary was about to open in a city-backed residential
hotel for recovering addicts. When the mayor got wind of it, he asked
to see the city's rules for establishing clubs, and found virtually
none. The board of supervisors has called a moratorium on new clubs,
pending adoption of new regulations, which could come this fall.

Mr. Newsom, who supports medicinal marijuana, recently told a
gathering of club operators and advocates that he fears the city's
current lawless approach will hurt the movement: "We can't screw this
up."

With about 40 pot clubs, up from about a half-dozen in 1999, San
Francisco has the most of any city in the nation. An advocate Web site
lists about 160 clubs statewide. The number of cards issued by the
city's health department to pot patients has quadrupled to about 8,000
in four years.

San Francisco clubs have mushroomed in recent years because other Bay
Area counties and cities have banned them or made rules so onerous few
can operate. Oakland has limited the number of clubs citywide to four,
Berkeley to three.

Most eyes, however, are on San Francisco. Devising rules for selling
pot, even in a liberal-minded city, is complicated. Critics range from
other supervisors, who are calling for stricter location controls and
business hours, to Terence Hallinan, the former district attorney of
San Francisco and well-known supporter of medicinal marijuana who is
defending one of the men charged in the June raids.

"I don't think some regulation is a bad idea," he said, "but it can be
dangerous to keep written records of dates and sales. As a defense
attorney, I tell my clients it's not a good idea. The feds could
subpoena all of it."

Distributed by Knight Ridder/Tribune Information Services.