CASH CROP

In the quiet countryside just outside Vancouver, B.C. an ambitious young
entrepreneur surveys a blindingly bright room filled with lovely
plants--dozens of stalks of high-power marijuana. Almost ready for harvest,
they hold threadlike, resin-frosted pot flowers, rust-and-white "buds"
thickening in a base of green-and-purple leaves. The room reeks of citrus
and menthol, a drug-rich musk lingering on fingertips and clothes.

"There's no way I won't make a million dollars," says the entrepreneur,
David (one-name sources throughout this story are pseudonymous). He runs
several other sites like this one, reaping upwards of $80,000 in a ten-week
cycle. Says he: "Even if they bust me for one, I'm covered."

So, it seems, is much of Canada--covered with thousands of small, high-tech
marijuana "grows," as the indoor farms are known. Small-time marijuana
growing is already a big business in Canada. It is likely to get bigger,
despite all the efforts of the antidrug crowd in Washington, D.C. On Oct. 14
the U.S. Supreme Court, by refusing to disturb an appeals court ruling, gave
its stamp of approval to doctors who want to recommend weed to ease their
patients' pain or nausea. In the U.S. nine states have enacted laws
permitting marijuana use by people with cancer, AIDS and other wasting
diseases. The Canadians are even more cannabis-tolerant; although they have
not legalized the drug, they are loath to stomp out the growers. This
illicit industry has emerged as Canada's most valuable agricultural
product--bigger than wheat, cattle or timber.

Canadian dope, boosted by custom nutrients, high-intensity metal halide
lights and 20 years of breeding, is five times as potent as what America
smoked in the 1970s. With prices reaching $2,700 a pound wholesale, the
trade takes in somewhere between $4 billion (in U.S. dollars) nationwide and
$7 billion just in the province of British Columbia, depending on which side
of the law you believe.

In the U.S. the never-ending war on drugs endures, to modest discernible
effect. In a largely symbolic act the U.S. Justice Department has just
imprisoned an icon of the pot-happy 1970s--Tommy Chong of the old Cheech &
Chong comedy team--for selling bongs on the Internet (see box, p. 154). But
in Canada the trade in pot, or cannabis (as many Canadians call it), is an
almost welcome offset at a time when British Columbia's economy is in the
doldrums.

Tourism here is down, and thousands of jobs got axed when the U.S. slapped
tariffs on exports of softwood and then banned Canadian beef after an
outbreak of mad cow disease. The marijuana business, by contrast, is
thriving, not least because Canada shares a thinly guarded 5,000-mile border
with the U.S., a big market. Ultimately much of the revenue flows into the
coffers of hundreds of legitimate businesses selling supplies, electricity
and everything else to the growers and smugglers.

And who are these growers? Not a small coterie of drug lords who could be
decimated with a few well-targeted prosecutions, but an army of ordinary
folks. "I know at least a hundred [of them], 20 years old to 70," says
Robert Smith, who isn't part of the trade but indirectly profits from it at
the furniture store he owns in Grand Forks, B.C., 110 miles north of
Spokane, Wash. "Of the money coming through my door, 15% to 20% comes from
cannabis--we'd be on welfare without it."

Mexico remains the biggest supplier of foreign pot for U.S. consumers,
growing valleys of lower-grade grass and sending it north; some 500 tons of
pot were seized at the Mexican border in 2001, more than 100 times the
volume confiscated at the Canadian boundary. California is a prodigious
supplier, as well. But Canada's industry is notable for its dispersion. The
scattered and all but undetectable production may well herald a modus
operandi for other regions.

Small growers like David bring in $900 a pound at the low end, with net
margins of 55% to 90%, depending on quality, depreciation and labor costs.
They produce half a pound to 30 pounds every ten weeks, selling their
product to local users or peddling it to "accumulators," who then smuggle it
over the border or sell it up the chain to larger brokers. Accumulators and
brokers typically add $80 a pound to the cost, as do the high-volume
smugglers who buy from them. Smugglers returning money to Canada for other
dealers skim a 2% laundering fee.

"The first time somebody gives you a bag of money so heavy that you can't
lift it, it's surreal. Pretty soon, it's just dirty paper," says Jeff, who
recently retired from smuggling up to a ton of weed a week.

Jeff started out a few years ago by growing just 8 pounds of pot with his
friends. Within a year they were brokering hundreds of pounds from other
small growers to someone with connections to large U.S. distributors. When
that person's buyer retired, Jeff paid him $250,000 for the buyer's client
list. "Sounds astronomical," he says, "but at the time it looked free."

Once in the U.S. the bud usually stays on the West Coast. In Seattle a pound
of top-quality pot sells for $4,000, and by the time it hits Los Angeles it
runs up to $6,000. High-grade cannabis then sells at smaller weights,
eventually burning up at $600 to $800 an ounce.

Back in British Columbia the business of pot encompasses wholesaling
different strains of seeds for 95 cents to $1.90 apiece, the prices
depending, among other things, on how well a strain's buds rank at annual
(and very public) "breeders' cup" competitions in Amsterdam and Vancouver.
Plants can also be propagated from cuttings, sold for $3 to $10 each,
wholesale.

This is a job-creating industry. Trimming the dried flowers to maximize look
and taste of the top product pays about $15 an hour for a skilled laborer;
it takes ten hours for an experienced trimmer to turn out a pound of buds.
Consultants get $40 an hour for helping junior growers.

Marijuana underwrites other businesses, too. Vancouver tour guides brag of
quality "B.C. bud," and "smokeasies" near the Canadian border cater to
Canadian and U.S. customers. Local authorities wink at the offense. The
owners of these smokeshops resemble camp followers of a particularly tough
Grateful Dead tour. Customers include clean-cut men in golf shirts, grannies
and women cradling babies.

Advice magazines offer tips on growing; lighting shops are spread across the
country to serve novice farmers; and fertilizer companies target their
marketing to pot growers. In the wake of a federal crackdown on makers of
marijuana pipes in the U.S., those businesses are relocating north of the
border.

In the Kootenay mountains of B.C., Gary Bergvall sold lights from a
15-by-15-foot space in 1996. Now he employs 28 people and runs a factory
that ships, each week, lighting systems as well as two tractor-trailers full
of air filters. Could the activated charcoal filters be useful for absorbing
the telltale odor of certain plants? Maybe. The lights? Bergvall is
circumspect. They are used "for a special purpose, whatever that may be," he
says.

Marc Emery started a mail-order marijuana-seed business in Vancouver in
1994, moving 100,000 seeds a year at an average $3.75 each. Today the
tax-paying entrepreneur sells 350,000 seeds a year, even though he has more
than 20 Canadian competitors (plus rivals in Holland, Spain and the U.K.).
Selling seeds in Canada is illegal, but just about no one is busted for it.

Web sites from Vancouver to Montreal sell pot to medical patients in Canada;
one site requires only a doctor's letter testifying you have one of 192
afflictions (including writer's cramp and hiccups). Barbara St. Jean, a
financial planner, got a pot prescription to treat pain associated with
lupus. She and her husband, Brian Taylor, a former mayor of Grand Forks who
later ran for national office on the Canadian Marijuana Party ticket, have
taught college courses on how to grow cannabis indoors. St. Jean once gave a
speech to some 40 city planners from across B.C., extolling the potential
benefits of cannabis to their local economies.

All of this action owes much to the U.S. and an inflow of draft-dodging pot
smokers during the Vietnam War. The marijuana growers among them introduced
sinsemilla (Spanish for "without seeds"), the unpollinated female plant,
which is far more potent than its male counterpart. In the 1980s refugees
from a northern California war on pot also headed to B.C., just as
1,000-watt lights made possible year-round production of top-grade strains.
Locals learned to grow for their climate.

The market is now mature enough for precise segmentation. Dealers grade buds
like bonds, starting at BB, worth just $800 a pound because of its chemical
taste and black ash when burnt. A-quality cannabis tends to be well-grown
outdoor product, at $1,300 because of its somewhat loose buds. AAA, the type
David grows and Jeff smuggled, is characterized by tight clusters of
flowers, a pleasant smell of eucalyptus and enough drug-rich resin to coat
the sides of a plastic bag. Even on a carefully grown plant only 50% of the
buds are the right size and shape for AAA. The best stuff has odd varietal
names--Mango and Blueberry for the fruity-smelling strains, and F---ing
Incredible and Romulan (a nod to the warriors with dented heads on Star
Trek), a testimony to the euphoric, incapacitating effects.

Producing the seeds of such strains is up to guys like Daniel, a third-year
apprentice breeder along western B.C.'s coast. He helps produce about 60
varieties, starting with a dark green bud called "Mighty Mite," a plant for
urban window boxes that grows to the size and shape of a corn dog At the
other end are 14-foot-high monsters that reflect their origins in the
Brazilian jungle.

Daniel's newest creation is a straight-stemmed plant that stands 8 feet high
and has thick, well-spaced clumps of flowers. "This is a good prairie
strain," says the Alberta native. "You could harvest it with a combine or a
sunflower cutter. I'd like to produce seeds in 50-pound bags." Like many
people in the Canadian cannabis trade, he expects marijuana cultivation will
be fully legal before long.

For Daniel, thieves, not the police, are the big worry. And with good
reason: The Royal Canadian Mounted Police, which opposes many of Canada's
pro-pot steps, concedes that in B.C. only one-fifth of marijuana busts
result in incarceration and the average sentence is only four months. "Maybe
the police can take these plants," Daniel says, nodding to a packed
greenhouse. "Maybe they'll even take me downtown, maybe arrest me. Maybe.
But we have clones and copies of every one of our plants in three more
locations."

With seeds or clones an indoor grower can spend just $1,600 to set up a
9-square-foot indoor plot capable of hosting 72 small plants that produce
31/2 pounds of mixed-quality buds in seven weeks. A well-wired operation
with 20 lights costs $20,000 to set up. Most growers stop at 10 lights lest
they attract attention with a steep electricity bill.

A good rule of thumb in figuring yield is 1 to 11/2 pounds of bud per light.
By using cuttings and closely regulating how much light the plants get,
indoor gardeners crush a normal five-month growing cycle into ten weeks.
Like high-end winemakers, these producers obsess about methods, singing the
virtues of organic gardening, hydroponics (soilless agriculture), even
aeroponics (with nutrient misted on the plants). Some pot farmers pump
carbon dioxide into the room. Growing AAA is labor intensive: The plants
need daily watering, spraying and cutting back, producing a trash bag full
of unwanted leaves each week for a small grow.

David, the western B.C. grower who dreams of making a million, has hired
caretakers to oversee three additional rooms of 20 lights each; the
employees include a retired mining executive and a middle-aged American
fugitive, he says. They get 25% of the crop, and David splits the rest with
his financier, a retired grower/smuggler. His landlords get an extra $1,500
a month on top of the rent, and he pays for repairs from any water or soil
damage when production ceases. He lives in a neat house on a quiet
cul-de-sac, rigged with radio-controlled motion detectors. Full of kids,
dogs and golf clubs, it is prosperous and unremarkable, except for details
like the beat-up cracker box brimming with the household pot stash and the
note on the fridge that reads: "Gretchen called: Probation!" It seems almost
like a game, until Anne, his wife, voices the underlying stress.

"When someone goes down, we all feel really bad, but you can't get too close
to someone who's involved with the law," she says as she prepares the kids'
breakfast. "You try to keep them away from it as much as possible." A
helicopter cuts through the morning fog, and she tenses momentarily. "You do
a lot of yoga; you try to pretend it isn't real."

Prepared product is packed in half-pound lots. Forty bags fit into a typical
carry-on suitcase. Small-scale marijuana smugglers, or "rabbits," run dope
to the U.S in car rides, marathon jogs, three-hour kayak trips or floating
hollowed-out logs on the tide. The Mounties, with a patrol fleet of just
four boats, are not a big worry on the water.

"You can get 80 pounds into a backpack, and you get big legs running over
the mountain," says Paul de Felice, co-owner of the Holy Smoke smokeasy in
the eastern B.C. town of Nelson. "I've seen them so nervous they vomit
before they take off--but I never see them stop."

As in all business, it is important to manage risk. Jeff would first try a
smuggling method with 50 pounds; if it worked, he would try 100, then 300.
He moved pot in the fiberglass hulls of yachts and in the false floors of
long horse trailers. "No border agent wants to unload all those horses,
shovel out that manure," he says.

One method: Drag a shipment underwater behind a fishing boat. A zinc strip
fastens a buoy and a length of line to the package. If the boat is stopped,
the crew cuts loose the shipment, which sinks, buoy and all. The zinc
dissolves in the seawater within 12 to 18 hours, and the buoy surfaces with
its line tied to the pot, letting Jeff recover the dope. Another method
involves bisecting a propane truck, inserting 500 pounds of bud below a
false floor and setting the gas pressure in the truck to read as if it were
full.

Eventually "you use a lot of planes," he says. "They're faster, they give
you more control and you get better prices if you can deliver 40 miles over
the border, past the hot zone." Pilots fly low, hugging mountains on the lee
side of fire towers.

Jeff has retired in the face of exhaustion, a fear of snitches in the
network and rumors that the U.S. government has planted an agent in the
system, who over time is rising high enough to decapitate a big smuggling
operation. When asked how many people in the big operations really leave,
however, he says, "Maybe 5%. I've got pilots I made millionaires, and they
still fly." Jeff's fear of a mole may be well grounded, for the Mounties
hope to strike a blow to Canada's cannabis business with a string of big,
high-profile busts over the next several years. But the pot business, with a
structure less like typical crime rings and closer to that of the
Internet--lots of little nodes (in this case, producers) feeding a loosely
organized hierarchy--will be difficult to shut down.

The Mounties are not happy about legal marijuana for medical patients--they
say the drug needs more study before it is dispensed--but they worry more
about the effect of the marijuana-rich gangs on the Canadian economy. It is
not just the possible violence (U.S. guns have been traded for Canadian
pot), but the business considerations. "There are many millions of dollars
here, wrecking the legitimate business," says Rafik Souccar, director
general of drugs and organized crime enforcement for the Mounties. The
contraband dealers launder money through unprofitable concerns, which then
charge artificially low prices for legit goods.

Police also worry about the hazards of poor electrical wiring, hazardous
molds and excessive chemical use at grow houses--and a public too blase
about the dangers of drug use. "Part of the problem is a laissez-faire
attitude on the part of the public," says Charlie Doucette, a Mountie in
charge of drug enforcement in Vancouver. "We don't have an appetite in
Canada to say 'This isn't right.'"

Some police think the battle may well be over. Rollie Woods, head of vice
and narcotics enforcement for the Vancouver police department, noticed
indoor growers throwing out unwanted leaves and dirt at a site the city uses
for refuse collection. He told the staff there to note the license plate
numbers of every such farmer but called off his plan a few months later.
"There were hundreds [of cars]. No way we could track them all." At this
point he supports legalization, if only so he can concentrate on Vancouver's
growing crack problem.

"If it wasn't for pressure from the U.S., we'd just regulate this," says
Woods, who has all of six agents pursuing the pot trade. Investing millions
more in a crackdown may be of little consequence, he adds. "You could give
me a hundred people, and it wouldn't make a difference."

Building The Perfect Bud

Want dope? Plant seeds. Want high-end dope? Pay attention.

LIGHTS: With 1,000-watt metal halide lights first blasting clones for 24
hours a day, followed by 12-hour intervals of dark to force budding, a
half-year grow cycle is cut to ten weeks.

GENETICS: Breeding stock is critical to top-quality pot. Branches of the
best female plants are cut and potted. The genetically identical offspring
are also cloned.

AIR: Temperatures in the 70s. Added carbon dioxide boosts production,
quality.

DIRT: Or hydroponics or aeroponics. Nitrogen for growth, phosphorous and
potassium for resinous flowers. Beneficial fungi and bacteria to boost THC.

Sources: Ed Rosenthal; Advanced Nutrients.