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How marijuana became legal

Medical marijuana is giving activists a chance to show
how a legitimized pot business can work. Is the end of prohibition upon us?

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By Roger
Parloff, senior editor

Last Updated: September 14, 2009: 1:30 PM ET

Irv Rosenfeld is one
of four U.S. citizens who get their medical marijuana from the federal
government.

Stephen DeAngelo
founded Harborside to show that a marijuana dispensary could make a
positive contribution to a community.

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(Fortune Magazine) -- When Irvin Rosenfeld, 56, picks me up at the Fort
Lauderdale airport, his SUV reeks of marijuana. The vice president for sales at
a local brokerage firm, Rosenfeld has been smoking 10 to 12 marijuana cigarettes
a day for 38 years, he says.

That's probably unusual in itself, but what makes Rosenfeld exceptional is
that for the past 27 years, he has been copping his weed directly from the
United States government.

Every 25 days Rosenfeld goes to a pharmacy and picks up a tin of 300
federally grown and rolled cigarettes that have been sent there for him by the
National Institute of Drug Abuse (NIDA), acting with approval from the U.S. Food
and Drug Administration.

Rosenfeld smokes the marijuana to relieve chronic pain and muscle spasms
caused by a rare bone disease. When he was 10, doctors discovered that his
skeleton was riddled with more than 200 tumors, due to a condition known as
multiple congenital cartilaginous exostosis. Despite seven operations, he still
lives with scores of tumors in his bones.

Rosenfeld is one of four people in the United States whom the federal
government supplies with medical marijuana. Each is a living anomaly because,
officially, the U.S. Drug Enforcement Administration, NIDA, and the FDA all take
the position that marijuana has "no currently accepted medical use."

That's the only way federal law can continue to classify marijuana, like
heroin, as a "Schedule I controlled substance," forbidden from being prescribed
by doctors. (Numerous dangerous, psychoactive, and addictive opium derivatives,
by contrast, are more leniently classified as Schedule II drugs, allowing
prescription use.)

Over the years the government's position has become progressively more
embattled, if not untenable.

Thirteen states now have laws that let residents use marijuana medicinally,
typically to alleviate chronic pain (particularly nerve pain caused by diabetes,
AIDS, and hepatitis); manage movement disorders and muscle spasticity
(especially for multiple sclerosis patients); as an anti-nausea and
anti-vomiting agent (for those, say, undergoing chemotherapy); and as an
appetite stimulant (yes, as in "the munchies") for those with wasting diseases
like AIDS and cancer.

Another 15 states are weighing legislation or ballot initiatives that could
turn them into medical marijuana states by next year.

The acceptance of medical marijuana has implications that extend far beyond
helping those suffering from life-threatening diseases. It is one of several
factors -- including demographic changes, the financial crisis, and the widely
perceived failure of the war on drugs -- reopening the country's 40-year-old
on-again, off-again shouting match over whether marijuana should be legalized.

This article is not another polemic about why it should or shouldn't be.
Today, in any case, the pertinent question is whether it already has been -- at
least on a local-option basis. We're referring to a cultural phenomenon that has
been evolving for the past 15 years, topped off by a crucial policy reversal
that was quietly instituted by President Barack Obama in February.

First, some necessary background. Under President George W. Bush (and under
President Bill Clinton before him, for that matter), the U.S. Justice Department
treated state medical marijuana laws as nullities. Such laws were contradicted
and therefore preempted by federal drug laws, the Justice Department reasoned,
and the U.S. Supreme Court upheld that position in 2005.

0:00 /5:02The legitimization of selling pot

Accordingly, the federal government has periodically raided and prosecuted
defendants who at least claimed to be complying with state medical marijuana
laws, and when it did, defendants were forbidden from telling juries about the
existence of those laws.

In late February, President Obama signaled a new approach. His attorney
general, Eric Holder, confirmed at a press conference that he would no longer
subject individuals who were complying with state medical marijuana laws to
federal drug raids and prosecutions.

This understated act -- a simple pledge not to act, really -- could have
enormous consequences. It potentially leads to exactly the same endpoint as the
Twenty-First Amendment, which repealed the federal prohibition on alcoholic
beverage sales.

Here's how. When states make a legal loophole allowing medical use of
marijuana, they must grapple with the messy question of what precisely
constitutes medical use. After all, doctors regularly prescribe powerful drugs
like Valium, Viagra, Prozac, and -- give us a break -- Botox to patients who are
hardly at death's door.

If a state doesn't tightly limit what "medical use" means, the camel can get
its nose under the tent.

That's what happened in California. Like most medical marijuana states,
California permits doctors to "recommend" marijuana use for patients who suffer
from specific serious diseases. (Drafters of the law avoided the word
"prescribe" in an attempt to sidestep conflict with federal law.)

California's law then adds a catchall provision that lets doctors also
approve marijuana use for "any other illness for which marijuana provides
relief." In practice, doctors -- largely protected from second-guessing by
confidentiality privileges -- have been free to make the final call as to which
conditions those might be.

This is, after all, the norm vis-à-vis medicines. Once a pharmaceutical has
been FDA-approved for one use, doctors can lawfully prescribe it for other,
so-called off-label purposes, even though the drug has not yet been certified as
safe or effective for them.

Accordingly, California doctors are authorizing patients to take marijuana to
relieve such ailments as anxiety, headache, premenstrual syndrome, and trouble
sleeping. "You could get it for writer's block," comments Allen St. Pierre, the
executive director of the National Organization for the Reform of Marijuana
Laws.

Some California doctors voluntarily report the breakdown of patient medical
conditions for which they have approved marijuana use in the Alameda, Calif.,
medical newsletter O'Shaughnessy's.

They commonly report that more than a quarter of their marijuana
authorizations have been prompted by patients suffering from conditions like
"anxiety" or "insomnia." (The most common complaint is "chronic pain.")

As a result, in most of California's coastal metropolitan areas, marijuana is
effectively legal today. Any resident older than 18 who gets a note from a
doctor can lawfully buy the stuff, and doctors seemingly eager to write such
notes, typically in exchange for a $200 consultation fee, advertise in
newspapers and on websites.

There are an estimated 300,000 to 400,000 medical marijuana patients in the
state now, and the figure is rapidly growing.

More astonishingly, there are about 700 medical marijuana dispensaries now
operating in California openly distributing the drug.

These dispensaries -- called "compassionate-care clinics" by the solemn and
"pot shops" by the skeptical -- are decidedly outpatient facilities, with not a
few patients arriving on bicycles, roller skates, or skateboards. (They often
get discounts for doing so, because it's greener than using a
fossil-fuel-powered car.)

The dispensaries sell marijuana and its concentrated resin forms, hashish and
kif, sometimes alongside a range of enticing, non-inhaled alternatives,
including marijuana-imbued brownies, cookies, gelati, honeys, butters, cooking
oils ("Not So Virgin" olive oil), bottled cold drinks ("enhanced" lemonade is
the most popular), capsules, lozenges, spray-under-the-tongue tinctures, and
even topically applied salves.

In Los Angeles a high-end three-store chain called the Farmacy employs a
pastry chef to oversee production of all its baked goods. Most dispensaries also
sell potted plants and seeds for patients who are either thrifty or
entrepreneurial.

All these establishments are engaged in what federal penal statutes still
humorlessly define as narcotics trafficking. The dispensaries' affiliated
marijuana farms and plant nurseries are sometimes of sufficient size to subject
operators to mandatory-minimum five-year federal prison terms.

And this, mind you, is a situation that evolved almost entirely during the
Bush administration, when the U.S. Drug Enforcement Administration was still
routinely threatening dispensary landlords with forfeiture of their premises,
periodically raiding clinics and seizing inventories, and criminally prosecuting
the most brazenly abusive operators.

Luke Scarmazzo, who aired a rap video on YouTube two years ago boasting of
all the money and great sex he was getting from running the California
Healthcare Collective in Modesto, Calif. -- "Fuck the feds!" was one ill-advised
lyric -- was sentenced in federal court this past December to almost 22 years of
imprisonment on a continuing criminal enterprise conviction. (He has appealed.)

While the situation in California is unusual, it's becoming less so. There
are now 15 dispensaries in Colorado, according to weedmaps.com, one of many
online marijuana dispensary and physician ("pot-doc") locator services. In
Oregon nearly one in four active physicians has authorized at least one of his
patients to grow marijuana for medical use.

New Mexico hopes to have the nation's first state-licensed medical marijuana
farm and distributorship up and running by the time this article is published.
New Mexico's law was enacted two years ago, but state officials hadn't dared
implement it until Attorney General Holder blew the all clear in February.

This is the sense in which President Obama's understated pledge not to
interfere with state medical marijuana laws potentially achieves for that
intoxicant what the Twenty-First Amendment accomplished for beer, wine, and
booze during the Great Depression.

Repeal, remember, simply returned to the states the right to decide whether
to permit alcoholic beverage sales, and, if so, when and how. If a state
permitted sales, it could also enforce minimum- age requirements, limit store
hours, set zoning restrictions, and levy taxes. If it prohibited sales, it could
bask in righteousness but exercise no control over the traffic that would occur
anyway.

Over time nearly every state fell in line behind the tax-and-regulate model.
(During Prohibition, federal law did contain an exception allowing alcoholic
beverage sales for medical purposes. Nevertheless the case for medical booze was
never compelling, and after repeal no state chose to condition the legality of
alcohol sales upon a showing of medical need.)

"I think we're going to have exactly that kind of local option with marijuana
[that we now have with alcohol]," says Keith Stroup, 65, NORML's founder,
two-time past executive director, and current legal counsel. "Once that happens
it will be like gambling."

Initially only Nevada permitted gambling, and then it was just Nevada and New
Jersey. "But over a period of time," Stroup says, "the morality part of the
issue kind of dissipated, and there were more and more needs for new revenue,
and today almost every state in the country allows legalized gambling."

Marijuana activists thought they were close to legalization once before. From
1973 to 1978 activists won decriminalization in 11 states. ("Decriminalization"
is a grab-bag term but usually refers to schemes under which first-time
possession of small quantities of marijuana becomes a noncriminal violation,
akin to a parking ticket. Decriminalization falls short of legalization, in that
sale and distribution remain serious felonies.)

In 1977, President Jimmy Carter endorsed a federal decriminalization bill.
But the bill went nowhere, and soon the movement was all but obliterated by the
return swing of the cultural pendulum, now known as the Reagan Revolution. There
would be no new state or federal marijuana reforms for the next 16 years.

"Here's what's different now," asserts Ethan Nadelmann, the head of the Drug
Policy Alliance, which favors marijuana legalization on a tax-and-regulate
model. "First, in the late 1970s no more than 30% of the American public
supported making marijuana legal. Now it's breaking 40%."

That jump reflects an important demographic change, Nadelmann notes. "Back
then there was a whole older generation of Americans who didn't know the
difference between marijuana and heroin," he says. "Now that generation is
mostly gone. The people in power are baby boomers, a majority of whom actually
smoked marijuana."

The past three Presidents have all more or less admitted trying the drug,
Nadelmann continues, and the current one, when asked if he inhaled, famously
retorted, "I thought that was the point."

Beyond the demographic change, there is a perception that after 40 years of
blood, sweat, and tears, the war on drugs -- formally declared by President
Richard Nixon in 1969, a month before the Woodstock festival -- has failed to
reduce the availability of illegal drugs, has enriched and empowered
organized-crime gangs, and has subjected millions of people to arrest who pose
little threat to anyone but themselves.

On top of that, we're now mired in the worst economic environment since the
Great Depression, which makes the prospect of collecting taxes on marijuana
sales as alluring to contemporary politicians as beer, wine, and liquor taxes
looked to President Franklin Delano Roosevelt and his party when they took
office in 1933, the year Prohibition was repealed.

Assuming a national consumer market for marijuana of about $13 billion
annually, Harvard economist Jeffrey Miron has estimated that legalization could
be expected to bring state and federal governments about $7 billion annually in
additional tax revenue, while saving them $13.5 billion in prohibition-related
law enforcement costs.

In California, where the fiscal crisis is so grave that the state has had to
issue vendors more than $1 billion in IOUs, a Field Poll published in April
showed that 56% of the state's population favored legalizing marijuana,
prompting Gov. Arnold Schwarzenegger to call for an "open debate" on the
question. A legalization bill has been introduced in the state legislature, and
the state board of equalization has estimated that if passed, it would bring in
$1.4 billion in new revenue, a seemingly conservative estimate.

It's even possible that legalization would reduce national health-care costs,
by easing demand for costly pharmaceuticals.

In the most recent issue of O'Shaughnessy's, one doctor reported that
his cannabis patients had either stopped or cut back their use of "analgesics of
all kinds [including] Tylenol, aspirin, and opioids; psychotherapeutic agents
including anti-anxiety medications, anti-depressants, anti-panic,
obsessive-compulsive, anti-psychotic, and bipolar agents; gastrointestiminal
agents including anti-spasmodics and anti-inflammatory medications; migraine
preparations; anticonvulsants; appetite stimulants; immuno-modulators and
immunosuppressives; muscle relaxants; multiple sclerosis management medications;
ophthalmic preparations; sedative and hypnotic agents; and Tourette's syndrome
agents."

"Medical marijuana is God's little joke on the [marijuana] prohibitionists,"
says Richard Cowan, 69, a longtime legalization activist who claims he's smoked
almost every day since 1967. "There is clearly a medical need, and it ranges
from minor to life-saving.... From my perspective, the dividing line between
medical and nonmedical should not be decided by the police."

Medical marijuana is clearly the crowning factor making things different this
time. Not only is it changing perceptions of the drug, but it has also given
legalization advocates in California a first-ever opportunity to devise and
showcase a business prototype.

They've been afforded the chance to show a skeptical public that a safe,
seemly, and responsible system for distributing marijuana is possible. If they
succeed, they'll convince the fence sitters and lead the way to a nationwide
metamorphosis.

If they fail, the backlash will be savage. If communities cannot adequately
regulate the dispensaries, they'll descend into unsightly, youth-seducing,
crime-ridden playgrounds for gang-bangers, and this flirtation with legalization
will conclude the way the last one did: with a swift and merciless swing of the
pendulum.

Pot's medical history

Marijuana, whose botanical name is cannabis, has been used medicinally -- and
as an intoxicant, of course -- for thousands of years in Eastern cultures. It is
believed to have been introduced to Western medicine in the early 19th century
by a British doctor, W.B. O'Shaughnessy, who learned about it while stationed in
India (and for whom the medical cannabis newsletter is named).

Several well-known pharmaceutical companies, including Eli Lilly (LLY,
Fortune
500), sold cannabis in powdered or tincture forms in the early 20th century
as a painkiller, antispasmodic, sedative, and "exhilarant." (For this article
Fortune asked Eli Lilly for historical details on its cannabis sales, but a
spokeswoman responded, "Due to competing priorities, we ... are unable to
facilitate your query.")

Though cannabis remained listed in the U.S. Pharmacopeia -- a standard desk
reference for drugs -- until 1942, its use in Western medicine began declining
in the late 1800s, according to a history of cannabis written by Harvard
psychiatrist Lester Grinspoon titled "Marijuana: The Forbidden Medicine."

The decline, Grinspoon writes, was due in part to the rise of more stable and
effective pharmaceuticals -- though many of them later proved to have grave
potential side effects -- and because modern hypodermic syringes could deliver
faster pain relief using opiates. (Opiates were soluble; cannabis wasn't.)

Then, in the early 1900s, states began outlawing cannabis, which had become
associated in legislators' minds with violent crime and psychosis. The drug was
then being used in the U.S. mainly by Mexican migrant workers in the West and
African Americans in the South, so apprehensions about it may have been
intertwined with racial and ethnic fears. In 1937 the federal government, over
the objections of the American Medical Association, effectively outlawed
cannabis.

Modern-day medical assessments of marijuana's properties have not
corroborated the outsize dangers that lawmakers had attributed to the plant.
While it is a "powerful drug," concluded an Institute of Medicine report
conducted in 1997 at the behest of the White House Office of National Drug
Control Policy, its "adverse effects ... are within the range of effects
tolerated for other medications."

Yes, someone who is high on marijuana shouldn't drive -- his motor skills and
mental powers are impaired -- but that's true of alcohol and many prescription
drugs too.

The long-term risks to chronic users appear to center mainly on the generic
dangers of smoking (respiratory disease and possibly lung cancer) and upon the
"mild and short-lived" withdrawal symptoms that a minority of marijuana users
experience, according to the IOM experts. They considered marijuana less
addictive than tobacco, codeine, or Valium.

Still, many doctors are squeamish about recommending marijuana to patients --
putting aside issues of legal liability. To begin with, most pharmaceuticals
consist of a single, purified chemical compound. Such drugs are susceptible to
double-blind, placebo-controlled testing, and once they are approved, doctors
can prescribe known dosages.

Marijuana, in contrast, consists of the dried, ground-up flowers of a highly
variable plant. It is made up of at least 400 compounds, including more than 60
that are unique to cannabis, known as cannabinoids, several of which are
believed to have therapeutic effects. The proportions of these compounds vary
greatly from plant to plant. A plant may attract harmful molds.

Lighting a match to the mix then introduces a whole new set of variables.
Finally, smoking -- even putting aside its health risks -- is an idiosyncratic
delivery system. Everyone smokes differently, so one never knows how much of
which compounds the patient is receiving. These factors all make marijuana hard
for researchers to test meaningfully and hard for doctors to prescribe
confidently.

Accordingly, even those doctors who recognize the therapeutic powers of
marijuana often prefer the notion of looking for one or two key active
ingredients in it, isolating them, and then devising a delivery system that
would not involve smoking.

And that's been done. In 1986 the FDA approved a synthetic version of what
has long been recognized to be the main psychoactive ingredient of marijuana --
delta-9-tetrahydrocannabinol, or THC. After rigorous testing, the FDA found THC
to be safe and effective for the treatment of nausea, vomiting, and wasting
diseases. This lawful, Schedule II drug, trade-named Marinol, is taken orally,
by capsule.

The trouble is, for many patients Marinol turns out to be inferior to good
old-fashioned pot. Smoked marijuana is much faster acting and, as a consequence,
easier for patients to control in terms of dosage. The patient inhales as much
as he needs and then stops. In contrast, with a THC pill the patient can easily
ingest more than he can handle.

"Oral THC is slow in onset of action but produces more pronounced, and often
unfavorable, psychoactive effects that last much longer than those experienced
with smoking," according to a 2008 report published by the American College of
Physicians. (Incidentally, the FDA-approved warnings for Marinol -- pure THC --
do not flatly forbid patients from driving under its influence. Rather, they
simply caution patients not to do so "until it is established that they are able
to tolerate the drug and to perform such tasks safely.")

Still, despite the disappointing performance of oral THC, many doctors want
to continue exploring faster-acting THC delivery systems, including a skin patch
or a suppository.

Meanwhile we're still awaiting hard proof that smoking marijuana can actually
cause lung cancer. That evidence has proved surprisingly elusive, maybe in part
because typical marijuana users smoke so much less than typical tobacco smokers.

In any case, marijuana users are increasingly turning to a means of
inhalation that does not involve smoking known as vaporization. With a vaporizer
-- the Volcano brand is the best known -- users heat marijuana to a temperature
sufficient to vaporize the cannabinoids but insufficient to spark combustion and
most of its associated noxious gases. The vapors are captured in a balloon and
then inhaled.

The government's compassionate-use program

As a teenager Irv Rosenfeld was a strong opponent of marijuana use. He would
sometimes give talks against marijuana at local schools. "I'd hold up bags of my
prescription drugs and say, 'Be thankful you're healthy,'" he recounts. He was
then taking prescription muscle relaxants, sleeping pills, anti-inflammatories,
and a range of addictive, debilitating, opioid painkillers, including codeine,
Demerol, and Darvon.

Shortly after Rosenfeld started college at the University of Miami, he caved
in to peer pressure and tried pot. "Nothing happened," he says. (To this day
Rosenfeld maintains that he never has been able to get high from marijuana. In
my six or so hours with him, during which he drove me from Fort Lauderdale to
Miami and back, all the while chain-smoking joints, I never noticed any apparent
impact on him, other than an occasional cough.)

Rosenfeld continued smoking socially when others did. "About the 10th time,"
he continues, "I was playing chess when I realized that I'd been sitting still
for 30 minutes." Normally he couldn't do that because his muscles would begin to
ache and he'd have to change position. "I hadn't taken a pill in six hours. Just
then someone handed me the joint, and it hit me. The only thing I'd done
different was smoke pot."

Rosenfeld ran repeated experiments, and both he and his surgeon became
convinced that marijuana helped him more than his prescription drugs, with fewer
side effects. In 1971, with the blessing of his doctors and the indulgence of
sympathetic police officials, he began smoking marijuana to treat his pain.

Then, in 1976, Rosenfeld learned of the extraordinary case of Bob Randall
(now deceased). Randall, who had severe glaucoma, had been prosecuted that year
for marijuana possession in the District of Columbia but won acquittal after
advancing a "medical necessity" defense. Randall's doctors had testified that he
risked going blind without marijuana to relieve the pressure within his
eyeballs.

Randall then brought a civil suit against the government. In 1978 a
mind-boggling settlement was reached: The government agreed to supply Randall
with marijuana for the rest of his life.

The government had the capacity to strike such a deal because since 1968,
NIDA had been growing a small quantity of marijuana for research purposes under
contract with the University of Mississippi's pharmacy school. FDA and NIDA
officials theorized that the U.S. government could lawfully become Randall's
supplier if they observed the pretense that he was part of a clinical study to
investigate a potential new drug. A research "protocol" was drawn up, though the
study design called for just one patient: Randall.

Rosenfeld drew up a similar protocol for a clinical study of himself. With
the help of supportive doctors and threatening lawyers, Rosenfeld became the
second patient to pry his way into what became known as the compassionate-use
investigative new drug program.

By 1991 the compassionate-use program had grown to include 13 patients. That
year, after Randall counseled AIDS advocacy groups on how to seek admission to
the program, it suddenly found itself deluged with 40 new applications. In early
1992, seeing the unworkable direction in which matters were headed, the
government shut the program down, though the 13 existing patients were
grandfathered in. Today just four are left, including Rosenfeld.

For them, federal marijuana grown at the University of Mississippi is sent to
a contractor in Research Triangle Park, N.C., where it is rolled into cigarettes
on an old machine obtained from the local tobacco industry. About every five
months the contractor sends six tins of the cigarettes to the pharmacy where
Rosenfeld picks them up.

Rosenfeld's weed is hardly connoisseur quality by contemporary California
dispensary standards. The government grows its crops only sporadically, so it
dries the harvested flowers and places them in cold storage. When I visited him
in June, Rosenfeld was smoking marijuana harvested nine years earlier. Because
Rosenfeld finds the government's cigarettes too dry, he unwraps them, rehydrates
the marijuana by placing it in a container with lettuce, and then re-rolls his
own joints, he says.

Rosenfeld's cigarettes are also not very potent by contemporary standards.
They contain around 3.5% THC, which was about the average strength of dope
seized in domestic street busts in 1996, according to NIDA data.

By contrast, marijuana seized from such busts in 2007 had an average potency
of about 4.8%, while the fresh "manicured bud" available at today's best
California dispensaries boast THC content ranging from about 6% to 22%.

It's as if Rosenfeld were receiving vanilla ice cream joylessly made in the
Soviet Union and stored for decades, when there's fresh Ben & Jerry's
Chocolate Chip Cookie Dough for sale just around the corner.

Still, Rosenfeld's not complaining. The government charges him nothing, so
his only costs are medical consultations and pharmacists' fees -- about $50 a
month. Subpar or not, the 8.3 ounces he receives every 25 days would cost him
more than $2,000 on the street.

The battle to legalize marijuana

After the compassionate-use program was shut down, medical marijuana
activists had one last hope for changing federal policies. Back in 1972, NORML
and other groups had sued the predecessor of the DEA to force the rescheduling
of marijuana as a prescribable drug, and incredibly, two decades later, the
litigation was still raging.

During 14 days of hearings in 1986 the plaintiffs had presented many
anecdotal accounts of nearly miraculous experiences patients had had with
marijuana. Rosenfeld testified, as did the psychiatrist and medical historian
Grinspoon, who related not only the evidence his research had unearthed but also
a personal anecdote.

In 1972, Grinspoon's own teenage son, who had leukemia, began undergoing
chemotherapy. "He would start to vomit shortly after treatment and continue
retching for up to eight hours," as Grinspoon later described the ordeal in his
book. "He vomited in the car as we drove home, and on arriving he would lie in
bed with his head over a bucket on the floor."

Having heard that marijuana could help, Grinspoon's wife proposed that the
couple let their son try it, but Grinspoon refused because it was illegal. His
wife then defied him, secretly smoking marijuana with the teenager before one of
his treatments. This time there was no vomiting, and in fact, on the way home
the child asked to stop for a submarine sandwich. "From then on he used
marijuana before every treatment, and we were all much more comfortable during
the remaining year of his life," according to Grinspoon's account.

In 1988 the administrative law judge hearing the case ruled in NORML's favor.
"Marijuana, in its natural form, is one of the safest therapeutically active
substances known to man," Judge Francis Young concluded. Young was referring to
the fact that it is almost impossible to overdose fatally on marijuana, a
circumstance that distinguishes it from virtually any other drug. "By any
measure of rational analysis," Young concluded, "marijuana can be safely used
within a supervised routine of medical care."

In one of those maddening circularities of federal administrative law,
however, the DEA's appeal from Judge Young's ruling was heard by John C. Lawn,
then administrator of the DEA itself. Not surprisingly, in 1989, Lawn overturned
all of Young's findings.

Lawn gave short shrift to anecdotes like Grinspoon's and Rosenfeld's. "These
stories of individuals who treat themselves with a mind-altering drug ... must
be viewed with great skepticism," he wrote. "Many of these individuals had been
recreational users of marijuana prior to becoming ill. These individuals' desire
for the drug to relieve their symptoms, as well as a desire to rationalize their
marijuana use, removes any scientific value from their accounts."

Lawn also stressed the absence of any controlled clinical studies proving
marijuana's safety or efficacy. He was right; such studies didn't exist (at that
time), both because of the inherent difficulties of performing them on a whole
plant and the unique difficulties of performing them on an illegal plant. To
even obtain marijuana for such tests, researchers would have had to first win
approval from three federal bureaucracies - the DEA, the FDA, and NIDA -- a
daunting task even assuming the best of good will on everyone's part.

As for the controlled studies showing that marijuana's chief psychoactive
ingredient -- THC, in the form of Marinol -- was safe and effective for treating
certain medical conditions, Lawn saw them as simply proving conclusively that
there could be no conceivable excuse for smoking marijuana. To whatever extent
THC might be helpful, patients could use Marinol.

In 1994 the federal court of appeals for the District of Columbia upheld
Lawn's decision, and the activists' last hope for achieving reform at the
federal level died.

So they turned to state government. In 1996 a group of marijuana activists in
California got enough signatures to put a legislative initiative on the ballot
known as Proposition 215. It called for permitting medical marijuana patients or
their "primary caregivers" to possess marijuana on the "recommendation or
approval" of a physician.

The measure passed with a 56% majority, and California became the first
medical marijuana state. Precisely what that meant, though, remained totally
unclear. Prop. 215 did not specify how much pot patients could possess, and it
said nothing about the way patients would obtain it. Nothing in the initiative
explicitly legalized sales or distribution of any kind.

Nevertheless, a few intrepid souls opened dispensaries.

Dispensaries - A legal gray area

"In the immediate wake of passage of Prop. 215 in 1996," recalls Stephen
DeAngelo, who would later open what is now Oakland's largest dispensary, "local
governments tended to take a hands-off attitude toward medical cannabis." They
wouldn't explicitly license dispensaries to open, he says, but they also didn't
instruct the police to go shut them down. "Dispensaries were tolerated but not
sanctioned."

Even those local politicians who supported the goals of Prop. 215 were
reluctant to regulate in the area, because any such effort would have had to
begin with dispensary operators filling out forms providing incriminating
information about themselves. Any such documents could then have been subpoenaed
by federal prosecutors and used to shut the operators down or put them in
prison.

DeAngelo, now 51, was then a longtime marijuana activist but also a
businessman. From 1990 to 2000 he founded and headed the industrial hemp company
known as Ecolution. (Hemp, from which rope and other products are made, is a
non-psychoactive strain of cannabis. Hemp products are legal in this country,
but growing hemp is not.) Excited by the medical cannabis phenomenon in
California, DeAngelo moved there in 2001, when the legal environment was still
extremely gray.

He found two main types of dispensary managers operating at that time, he
recalls. "The best of them were the well-motivated activists who brought really
good intentions ... but had, for the most part, no business experience
whatsoever and no capital to invest. Despite that, they managed to thrive,
simply because they were the only game in town.

"This engendered a second wave of operators, who were attracted by the money,
as opposed to the cause," DeAngelo continues. "A whole new wave of dispensaries
got thrown up, which I refer to as 'thug dispensaries.' These were operations
run by people who had a background in illicit activities, whether it was selling
cannabis or other drugs on the street, or trading in illegal firearms, or in the
porn industry or gambling industry -- people comfortable operating in the gray
zone. Very rapidly you began to see some big problems. Several armed robberies.
You had a spate of stories about operators being arrested.

"As a patient," says DeAngelo -- he uses marijuana to relieve pain from a
degenerative disk disease -- "I was profoundly unhappy about it. As an activist
I became concerned because these types were really hurting the public image of
medical cannabis."

In an effort to improve the Wild West atmosphere, the California legislature
then passed Senate Bill 420 ("420" is a slang term for pot), which took effect
in 2004. This law fleshed out a bit more about the way Prop. 215 would work,
requiring counties to issue identification cards to patients who sought them (to
help them in their interactions with the police) and setting up minimum
guidelines for how much marijuana patients could possess: eight ounces of dried
marijuana plus either six mature plants or 12 immature plants. (Counties could
allow higher amounts.)

Though SB 420 was still silent on the issue of dispensaries, it did contain a
provision that protected patients or caregivers who "associate ... in order
collectively or cooperatively to cultivate marijuana for medical purposes."
Accordingly, nearly all the dispensaries in California now claim to be patient
"collectives" or "cooperatives," protected under this provision.

At the same time another provision of SB 420 seemed to cut against the idea
that dispensaries were legal -- at least as many of them were (and still are)
being run. It said that nothing in the law should be construed to "authorize any
individual or group to cultivate or distribute marijuana for profit."

"In my opinion," says Bill Panzer, a criminal-defense lawyer and marijuana
legalization advocate who helped draft Prop. 215, "the vast, overwhelming
majority [of dispensaries] are not legal, because they're not collectives or
cooperatives. If somebody owns the store, sells marijuana, and at end of day
takes the extra money and puts it in his pocket and goes home, that's not a
collective."

The proof-of-concept challenge

DeAngelo opened the Harborside Health Center dispensary in Oakland in October
2006 as a proof-of-concept that might show the rest of the nation how such an
establishment could provide top-flight patient services, adhere to the letter of
the law, and interact with the surrounding community beneficially.

His clinic, across from a scenic stretch of Oakland harbor, is identified
only by its address -- a large, block-letter "1840" painted on the façade of an
inconspicuous, gray-blue one-story building on Embarcadero Drive.

On the inside it's a spacious, wood-trimmed, tastefully appointed room that
blends clean, contemporary lines with sparingly employed Eastern medicinal
themes: a laughing Buddha here, a dancing goddess statuette there.

The mood is broken only by the metal detector at the door and the multiple
casino-style cameras embedded in the ceiling. Oakland has a high crime rate, and
precautions must be taken. There are at least three security guards inside the
facility at all times, as well as two more outside, patrolling Harborside's
100-car parking lot.

"Whenever a patient comes into the clinic for the first time," explains
DeAngelo, "they sign a collective cultivation agreement. They authorize all the
other patients in the collective to grow medical cannabis on their behalf. That
sets up a 100% closed-loop distribution system that isolates my patients from
any contact with the illicit market."

But that doesn't mean that every member of the collective actually knows what
a hoe looks like. "For a variety of very valid reasons," DeAngelo continues,
"most patients are unable to grow their own medicine. We act as a clearinghouse
between patients who are able to grow and patients who aren't able to grow."

Harborside now has 30,000 patients registered in its database, and their
purchases of medicine bring in about $20 million annually in revenue, according
to DeAngelo. "I'd rather not discuss my specific salary," he says. "I can tell
you if I was working in any other industry and showed the kind of financial
returns that this business has shown, I'd be paid three or four times as much as
I'm making at Harborside."

First-time patients, upon stepping through the metal detector at Harborside,
immediately undergo a thorough paperwork check. The patient produces his doctor
recommendation, the clinic verifies its authenticity with the doctor, and then
the clinic also verifies the doctor's credentials with the state medical board.

About 600 patients come to Harborside each day, according to DeAngelo, most
to buy marijuana, a few to supply it. Suppliers can bring in as much as three
pounds at a time. (Bay Area police generally allow patients to transport this
much, DeAngelo says.) The patient-grown marijuana is inspected for quality,
examined for molds and fungi, and tested with a gas chromatograph mass
spectrometer to determine its THC content.

At Harborside, there are eight selling stations along a long counter, each
near a glass case displaying the wide array of medicines available, labeled as
to strain and THC content. "Our most popular strains are our purple strains,"
says DeAngelo, "like Purple Urkle or Granddaddy Purple. The purples tend to be
heavy indicas" -- one of the two main varieties of psychoactive cannabis --
"with a very strong, relaxing effect. They have a characteristically sweet,
almost candy-like flavor.

"Another popular family of strains is the Kush family," he continues. "That
would include OG Kush, Baba Kush, and Pure Kush. The Kushes tend to be more
sativa-dominant," referring to the other main variety of cannabis, which is said
to produce a more cerebral, "daytime appropriate" high, with less body impact.
"They have a pungent flavor as opposed to a sweet flavor."

At Harborside, I experienced a mild personal epiphany: I realized that I
never really knew before what fresh marijuana smelled like. Though I had easily
recognized, from East Coast college days 30 years back, the smell of smoked
marijuana inside Rosenfeld's SUV, I had never before smelled the sweet, herbal
fragrance suffusing Harborside. At first I incorrectly assumed it was some sort
of incense being artificially introduced to mask the odor I was familiar with.

As I further inspected Harborside's medicines, I also realized that I had
never really known before what fresh, high-quality marijuana looked like. I
remembered baggies half-filled with crushed brown twigs, leaves, stems, and even
seeds. But the dispensaries sell only fresh "bud," which looks like cute, plump,
fuzzy caterpillars curled in a ball.

After my education at Harborside I went on to explore some of the other
approaches that marijuana entrepreneurs and activists are experimenting with as
they try to rise to the proof-of-concept challenge.

Pioneering canna-businessman Richard Lee, also in Oakland, has opened his
Blue Sky Café dispensary as a coffee shop, taking his cue from Amsterdam. Lee
acknowledges that he runs the Blue Sky as a for-profit business, a situation
that the City of Oakland authorities have at least tacitly endorsed,
notwithstanding SB 420's apparent prohibition of "for profit" distribution.

In 2004 the city, seeking to avoid being overrun by dispensaries, passed
municipal regulations limiting the permissible number to four. Those regs
required that dispensary operators not earn "excessive" profits, which has been
understood to imply that some profit must be permissible. Lee was granted one of
the city's four permits.

Lee has also opened an array of affiliated businesses in the immediate
neighborhood of the Blue Sky, several of the few bustling businesses in
Oakland's otherwise depressed downtown. The best-known is Oaksterdam University,
which trains medical cannabis entrepreneurs to navigate the business and legal
challenges.

It also teaches trades to those who seek jobs as, say, a medical cannabis
cultivator or "bud-tender," i.e., the quasi-pharmacist sales clerk who helps
customers choose their medicine. Oaksterdam has now opened branches in Los
Angeles and Sebastopol, Calif., about an hour north of Oakland, and stages
conferences in Ann Arbor.

The most open dispensaries I saw were two branches of the Farmacy chain in
Los Angeles. They are full-service herbal medicine stores under the management
of registered pharmacist JoAnna LaForce, with marijuana being sold
inconspicuously alongside scores of uncontroversial, legal plant products with
putative healing powers. At these stores all members of the public, of any age,
are welcome to enter, and only those who ask about marijuana are required to
produce paperwork. "That way, a young mother with children can come into a store
and not feel like a criminal," LaForce explains.

For my aesthetic taste, the most inviting dispensary I toured was the
immaculate Peace in Medicine facility in Sebastopol. Here, patients enter a
handsome, freshly painted house -- the former sales office for a Ford dealership
-- and come to what looks like a cheery doctor's waiting room.

After taking care of the paperwork, patients are summoned into the
dispensary. There, I mention to Robert Jacobs, 32, Peace in Medicine's
idealistic young executive director, how enticing the fresh medicine smells. "If
it smells good, the body probably wants it," he responds, smiling a bit and
sounding like Eve in the Garden of Eden.

I then notice a journalistic hole opening up in my reporting. Until now I had
assumed that my haphazard, stale, youthful experiences with marijuana would need
no refreshing in order for me to write a thorough article about medical
cannabis. Now I'm not so sure.

Unfortunately, most dispensaries are intransigent about serving only
California residents, and I am not one. I explain my quandary to Jacobs.
Listening back upon my words as they hang in the air, I realize that it sounds
as if I've just asked him to break the law. He very politely declines.

Taxing and regulating dispensaries

In the early days of dispensaries the California Board of Equalization, which
collects state and local sales tax, refused to issue seller's permits to
dispensaries that sought them -- the necessary prelude to paying sales tax in
the state. The board viewed such establishments as certainly illegal under
federal law, and possibly illegal under state law.

In October 2005 the board changed tack and began allowing dispensaries to pay
sales taxes if they wanted, and in 2007 it completed the reversal by requiring
them to pay sales taxes and demanding that they do so retroactively to October
2005.

The board assured the dispensaries in a February 2007 letter that it would
now issue seller's permits even if the dispensary refused to answer portions of
the standard application -- identifying the product sold, for instance, or
listing suppliers -- due to "concerns about confidentiality or
self-incrimination."

Since sellers' permits do not require establishments to identify themselves
as medical marijuana dispensaries, the board has no hard records on sales taxes
collected from them. Unless there is extremely poor compliance by dispensaries,
however, the numbers should be robust.

Harborside alone reported about $15 million in sales in 2008, for instance,
and DeAngelo estimates that the average revenue for each of California's 700
dispensaries probably ranges from $3 million to $4 million annually. If so,
gross statewide medical cannabis sales are approaching $2.5 billion, generating
taxes of around $220 million. That does not include the state and federal income
taxes that dispensaries and their employees also pay, and employee payroll
taxes.

In addition some localities, like Oakland, have begun imposing their own
taxes. Each of Oakland's four dispensaries pays the city $30,000 annually for
its license, plus a business tax on gross sales (over and above state or local
sales tax).

This past July, Oakland increased that business tax 15 times over, from $1.20
to $18 for every $1,000 in sales. Tellingly, the increase had been sought by the
dispensary owners themselves, who well understand the importance of being seen
as good citizens and becoming indispensable to the city's revenue supply.

Has medical cannabis been a good thing for Oakland? "I think so," says
Ignacio De La Fuente, Oakland's current deputy mayor and, from 1998 to 2008,
president of its city council. "I was not one of the initial supporters," he
concedes, and he still doesn't favor legalizing marijuana for recreational
purposes. "But I became educated about the medicinal value of cannabis" over the
years of debate, De La Fuente explains. "You kind of make a decision of, Is this
measure worth the risk to help the people that really need it?"

On balance he believes it was, though he urges other localities considering
legalizing medical marijuana to "do their homework about how they want to
regulate establishments, so they don't become a problem or a nuisance."

"It's not working," says Councilman Dennis Zine of Los Angeles, a city that
began regulating its dispensaries late, and is now overrun. "Too many of these
places have become distribution places for recreational purposes under the guise
of medical," he says.

In 2007 the city set a deadline after which no new dispensaries would be
permitted. A staggering 186 establishments met the cutoff, yet another 736 filed
late applications, citing a "hardship" exception, and many of those opened too.
Zine estimates that there are about 600 dispensaries in his city. He seeks
tougher regulations, plus assistance from city, state, and federal authorities
to help shut down any operator whose intent is "profit-making" as opposed to
"compassionate" distribution for "medical purposes."

"I think the next five or six years are going to be incredibly exciting for
this issue," says Stroup, who founded the National Organization to Reform
Marijuana Laws 39 years ago. "I honestly believe we'll stop arresting individual
smokers in almost all states and start to see the first one or two states
experiment with a legalization bill."

Although Stroup originally wanted the "R" in NORML to stand for "Repeal," he
was later talked into softening it to "Reform" by cooler, more politically savvy
advisers. Now he thinks society might finally be closing in on his original
goal.

Could be. Just watch out for those swinging pendulums.

First Published: September 11, 2009: 4:20 PM ET

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