First published 2010 by Paradigm Publishers
Published 2016 by Routledge
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Copyright 2010 by John Geluardi
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Book design: BookMatters
Cover design: Nicole Hayward
Cover art created from RX bottle Roel Smart;
Cannabis bud Scott Cramer; Cannabis leaf
Shaun Lombard
Library of Congress Cataloging-in-Publication Data
Geluardi, John.
Cannabiz: the explosive rise of the medical marijuana industry /John Geluardi.
p. cm.
Includes bibliographical references and index.
ISBN (a lk. paper)
1. MarijuanaTherapeutic useUnited StatesHistory. 2. Pharmaceutical industryUnited StatesHistory. I. Title.
RM666.C266G45 2010
338.4'761532345dc22 2010023956
ISBN 13: 978-0-9824171-9-5 (pbk)
Cannabiz: The Explosive Rise of the Medical Marijuana Industry
The seed for this book was planted in 2000, when I was a newspaper reporter in Berkeley, California. At that time, Berkeleys city council was struggling to regulate some of the nations first medical marijuana dispensaries. Proposition 215, the California initiative that had legalized medical marijuana four years earlier, had proven to be awkward and incomplete. For example, state law allowed dispensaries to sell marijuana, but growing or transporting it remained illegal. Under federal law, of course, marijuana was still completely illegal, and federal officials had increased their enforcement efforts after the passage of Proposition 215.
My initial idea was to write a magazine story about the life of a marijuana plant from the time its seed was planted in the wilds of northern California through its harvest, shipping, and finally its sale in a Bay Area dispensary. I wanted the story to include colorful rebels and misfits living on the margins of society. But I soon discovered growers were reluctant to show me their crops, much less permit me to follow them through an entire season. Eventually the idea took a backseat to other stories and deadlines.
When I revisited the story idea nine years later, the business of marijuana had changed dramatically. The tenacious weed had grown like Jacks gold-laden beanstalk, but the gold was no fairy tale. The cannabis industry as a whole, both legal and illegal, was generating by some estimates $115 billion annually. Cottage industries were flourishing: hydroponics supply stores, construction companies specializing in grow rooms, cannabis-friendly travel agencies, and a trade school with four campuses dedicated to training cannabis industry workers and entrepreneurs. By that time, the dispensaries had developed a support network that included elected officials, attorneys, public relations firms, unions, media, and nonprofit advocacy groups, all energetically promoting the public acceptance of medical marijuana.
And popular culture reflected that new acceptance. Weeds, a cable television show, featured a suburban housewife selling marijuana to make ends meet. Another cable program, Cannabis Planet TV, presented marijuana-based news as well as cooking and cultivation tips. Dozens of magazines, newspapers, Web sites, and blogs were focusing almost entirely on marijuana. In many states, billboards and radio broadcasts advertised medical marijuana services. Harvest festivals, THC expos, and marijuana seminars were being attended by thousands of people year round, even in states that hadnt legalized medical marijuana.
Public attitudes had shifted dramatically. According to the 2009 World Drug Report, 31 million Americans had used marijuana the previous year. The corresponding number at the end of the 1960sa few years before President Nixon launched the seemingly endless war on drugswas 6 million. The U.S. Department of Health and Human Services reported that more than 100 million Americans had tried marijuana at least once at some point in their lifetime. Two national polls taken in 2010 showed that nearly 80 percent of Americans supported medical marijuana, and roughly 44 percent would vote for full legalization.
Despite this widespread support, the industry had its critics. Many argued that dispensaries eagerly catered to perfectly healthy people. In fact, some dispensaries were running promotions that blatantly suggested adult recreation. Their advertisements featured glossy images of glistening marijuana buds and underdressed women enveloped in tendrils of wafting smokemore Bob Mar-ley than Blue Cross. Also, many dispensaries marketed strains of marijuana using names like Trainwreck, Big Fatty, and Cat Piss, which did not sound remotely medicinal. And though medical marijuana laws required a doctors written recommendation (federal law prohibited prescriptions) to purchase pot, obtaining one was embarrassingly easy. In California, all it took was a few minutes, a couple hundred bucks, and a little imagination. Casual observation at a typical dispensary indicated a high percentage of patients were American males between the ages of 18 and 35one of the healthiest demographic groups on the planet.
The bar was so low for obtaining a medical marijuana recommendation that it had become something of a joke. In a comedic scene of the HBO series Entourage, Kevin Dillon, who plays a television character actor, visits an evaluation clinic for a recommendation. But worried that whatever illness he claims might damage his virile public image, he and the doctor bandy possible ailments until they settle on a suitable anxiety disorder.
But criticism hadnt slowed the industrys growth, which the business community has begun to track. A September 2009 feature in Fortune magazine entitled How Marijuana Became Legal compared the growth of the medical marijuana industry to that of gambling. Initially gambling was legal only in Nevada. After New Jersey legalized it, other states followed; now almost every state in the union allows gaming. The article described the professionalism that some California dispensaries were practicing and attempted to estimate the size of the states medical marijuana market. The actual numbers are frustratingly elusive because the California Board of Equalization, which oversees state sales taxes, does not keep separate tax information on medical marijuana dispensaries. However, the article assigned an average revenue of $3 million to $4 million to each of the states estimated 700 dispensariesthe actual number of dispensaries is probably much higherand reasoned that medical marijuana was generating roughly $220 million in sales tax. That figure did not include federal employee-payroll taxes paid by dispensary employees.
Harvard economist Jeffrey Miron calculated potential tax revenue if marijuana were legalized throughout the United States. According to his 2010 study, state and federal governments would save $13.7 billion in law enforcement costs. Assuming legalization would hurt value, Miron put the national market at $14 billion. On the basis of that figure, Miron estimated federal and state revenues, including various excise and sin taxes, would be $6.7 billion.