WILDLY LUCRATIVE CLINICS ARE FEDS' TARGETS

Federal agents trailed Sparky Rose as he drove a Porsche Carrera
convertible to his medical marijuana clinic.

For the U.S. Drug Enforcement Administration, the sports car was a
sign Rose might be pocketing big money from the purportedly nonprofit
clinic, New Remedies Cooperative.

An investigation turned up records showing $2.3 million was deposited
in a New Remedies bank account in eight months starting in December
2005. Rose also wrote himself weekly checks of $9,600, according to
court papers.

When Rose was arrested in October and accused of illegal drug
trafficking - charges he denies - authorities seized $125,000 in cash,
thousands of pot plants and the Porsche from his San Francisco-area
clinic.

Under California law, clinics are supposed to dispense marijuana just
to seriously ill people and owners are to get only "reasonable
compensation" for their services. But oversight is lax and there are
few specific guidelines for buyers and sellers of a drug still illegal
under federal law.

a surge in new clinics. Oakland, Santa Rosa and even famously
permissive West Hollywood are among cities that have imposed
moratoriums on new clinics amid concerns that owners and buyers are
abusing the law.

The DEA also has taken notice, embarking on a stepped-up effort
targeting clinics run by people like Rose who appear to flout the
reasonable-compensation provision.

Federal officials raided 11 Los Angeles-area dispensaries in one day
in January, the largest-ever such crackdown. They returned to one of
the clinics in West Hollywood on Wednesday, breaking down a door and
seizing additional records.

DEA spokeswoman Sarah Pullen said authorities chose clinics that were
making big money, had become hot spots for crime or were part of large
franchises. The raided clinics, on average, raked in $20,000 in
profits each day, she said.

Many clinics were buying pot wholesale from street dealers and
reselling it for twice the roughly $100-an-ounce black-market rate,
Pullen said. "It's become something we can't ignore," she said.

The investigation is ongoing and has yet to produce any arrests or
charges. Some clinics have remained closed while others reopened.

West Hollywood City Councilman Jeff Prang said the federal government
should leave it to local governments to monitor and regulate marijuana
dispensaries that provide relief for those suffering from cancer,
Parkinson's, AIDS and other debilitating diseases.

"It's a real sad day for the DEA if these type of facilities are that
high on the list of priorities," he said.

California was the first of 12 states to allow the sale of marijuana
for medicinal purposes, mainly pain control, and is regarded as having
the loosest regulations.

Since the law was passed in 1996, the statewide number of clinics has
grown to about 400. Customers can order from a menu of marijuana
varieties, such as Green Crack and Hindu Kush. Some clinics even offer
packaged marijuana-laced lollypops, candy bars and pastries.

In Los Angeles alone, there are about 100 dispensaries, up from just
four in 2005, according to Police Chief William Bratton, who has
called for a moratorium on new clinics in the state's largest city.

Bratton is among those who believe the murkiness of the
reasonable-compensation provision added in 2003 has stoked a
proliferation of outlets run by people more interested in earning big
money than providing a service.

Police, clinic owners, activists and legislators - even the author of
the law - can't say for sure how much money clinic owners can legally
earn.

"A profit is in the eye of the beholder," said Joseph David Elford, a
lawyer for Americans for Safe Access, a medicinal marijuana advocacy
group.

Elford said a hands-off government approach to the clinics should
boost competition, keeping marijuana prices affordable for those who
need it and forcing owners to limit profits. But Pullen said that
hasn't happened - the number of clinics has swelled while pot prices
remain high and some owners are pocketing big money.

Former state Sen. John Vasconcellos, the San Jose-area lawmaker who
authored the 2003 law, has no problem with clinic owners earning hefty
salaries as long as they provide help for ill people. He said the
federal government should mellow out.

"We're helping people who are sick and they have this fascist
mentality against good health and pleasure," Vasconcellos said.

The bill's co-author, state Assemblyman Mark Leno of San Francisco,
sees no need to clarify the law and there is no serious effort from
state politicians to further regulate the industry.

"Micromanaging how private businesses operate is not something the
state should be involved in," Leno said.

Law enforcement officials like Bratton, however, believe some enhanced
state or local regulations are needed to keep drug dealers from
operating behind a veneer of legitimacy.

They cite recent DEA targets, such as 26-year-old Luke Scarmazzo,
co-owner of a Modesto clinic. A video for his rap song "Business Man,"
shown at his bond hearing, features him counting wads of $100 bills,
puffing what appears to be pot smoke into the camera and cursing
federal authorities.

Records at Scarmazzo's clinic, co-owned by Ricardo Ruiz Montes, 26,
showed the pair made more than $4.5 million in marijuana sales from
October 2004 to June 2006, according to the DEA.