OAKLAND TO LIMIT MARIJUANA OUTLETS

City Plans to Reduce Seven Medical Pot Vendors to Four

Sunday, April 18, 2004 - OAKLAND -- United by the risk of a federal
bust and a zealous conviction that they are helping ill people,
medical marijuana purveyors always have maintained a certain level of
community, watching each other's back.

Now, new city rules are forcing Oakland's cannabis clubs to compete
with each other for survival.

Beginning in June, the city will limit the number of marijuana outlets
to four. This week, operators of seven existing dispensaries, and one
newcomer called Canna Bilistic RX, will make their cases to the City
Manager's Office to stay in operation.

The city will issue business permits to up to four that make the cut,
while the others will be shut down.

Larry Carroll of the City Manager's Office has scheduled hearings on
Monday, Wednesday and Thursday. Decisions will not be made for several
weeks, he said, pending results of the full building, plumbing,
electrical, mechanical, fire and health inspections, which still are
being scheduled.

Dispensary operators say they are on edge. They congregated in Oakland
because of its liberal policy toward medical pot, but now they are
fearful the businesses they have invested in will be forced to shut
down.

Mark Belote of the Lemon Drop Cafe, a cozy coffee shop with a
dispensary downstairs, said he is nervous. The 2-year-old cafe was
hoping to expand to add a cabaret space.

"We put our hearts and souls into this place," he said. "I want to
play by the rules, so we've been up front about everything. I'm hoping
for the best."

To a certain extent, medical marijuana advocates welcome Oakland's new
process as a further step on the road to legitimacy. Though California
voters legalized medical cannabis in 1996, the federal government
considers it an illegal drug and continues to prosecute those who
distribute it.

Medical cannabis advocates have won some important legal victories
recently, and a new state law adds regulations to the broadly worded
Proposition 215.

Neighboring cities have taken varying approaches to their
dispensaries. Hayward gave permission for three existing cannabis
clubs to operate -- though one is being shut down following the
owner's arrest -- and Berkeley has four clubs that police each other.

But neither city has issued business permits or regulated the clubs to
the same extent that Oakland is doing now.

"The city of Oakland is now our co-conspirator. They (the federal
government) can't bust us without busting the city of Oakland," said
Richard Lee of the Bulldog Cafe, which also has a coffee shop up front
and a dispensary in the back.

"I'm not as worried about the legal issues anymore, but I think
limiting it to four is a very bad idea."

Oakland has been at the forefront in its support of medical marijuana,
deputizing the Oakland Cannabis Buyers' Cooperative (OCBC) as its
official agent in 1998 to protect it from prosecution. That didn't
stop the government from shutting the coop's pot operations down, however.

The OCBC is still fighting that legal battle, but the city's action
sent a signal to the medical cannabis community that Oakland was
friendly territory. Some estimates put the number of clubs in the city
at 10, though some may be small membership cooperatives, and only
seven applied for permits.

Most have set up in the triangle between 17th and 19th streets and
Telegraph Avenue and Broadway, breathing new life to the downtrodden
area. It's become known as Oaksterdam -- to the chagrin of those who
believe the nickname hurts the image that they are strictly selling
medicine.

The clubs sell cannabis in all its forms, from buds to hashish to
"keif" -- a concentrate of THC chrystals -- as well as brownies,
candies, oils and tinctures. Most accept only patients with
identification cards issued by the OCBC, though some issue their own
cards.

Most, if not all, allow smoking and other consumption of pot on site,
but that too will change under the new city rules which prohibit it.

The operators argue the marketplace should determine the number of
dispensaries in town. They also worry that whittling down the number,
and making those that have tried to keep a low profile go through a
public process, will make them targets for robberies.

Some clubs already have security cameras and at least one has
bulletproof glass. One club was recently hit by an armed robbery.

In their business permit applications, the dispensaries had to lay out
their operating plans, products, prices and number of patients. They
paid a $644 fee that includes the building inspections. Those who
receive permits will have to pay hefty annual fees of $5,000 to
$20,000 to pay for the cost of city monitoring.

The hearings will take place at City Hall from 10 a.m. to 1 p.m.
Monday in Hearing Room 3; 10 a.m. to 1 p.m. Wednesday in Hearing Room
4; and 10 a.m. to noon Thursday in Hearing Room 3.