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Tests for California's 'pot economy'

Medical marijuana booms in cities such as L.A., with some eyeing its revenue potential. But there's pushback, too.

By Daniel B. WoodStaff writer of The Christian Science Monitor / July 28, 2009

San Francisco: Darren Estoque (r.) delivers medical marijuana to David Goldman on behalf of The Green Cross, a licensed dispensary. More states are expected to legalize the drug for medical use.

Maria J. Avila/ San Jose Mercury News/ MCT/ Newscom

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Sitting on a sofa in the gymnasium-sized Quonset hut of the New Liberty Bell Temple, Daniel Reynolds puts his lips to a plastic cone and breathes in marijuana vapor.

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The vapor contains the active substance in cannabis that Mr. Reynolds, a cancer patient, says "eases his pain."

The vast room also hosts a pool table, ping-pong table, video-game monitor, and a stage for live music. In the back, a cubicle displays Mason jars filled with green, leafy clumps. Customers pay between $25 and $55 per one-eighth of an ounce for different strains of marijuana, marked "Humboldt Gold," "Black Africa," "Banana OG," and "NY Diesel."

Los Angeles's pot economy is booming. The number of medical-marijuana dispensaries here has skyrocketed from 183 in 2007 to about 800 now. In this period, pot shops have morphed from what Reynolds calls "hidden, remote places with no signs or addresses" into listed and public outlets. Many sport 10-foot signboards in the shape of a marijuana leaf.

But as dispensaries have sprouted across this and other California cities, they face pushback from local residents unhappy with their new neighbors and officials concerned about inadequate oversight of a novel business. Sacramento and Santa Cruz are considering moratoriums on new dispensaries as they review regulation. In L.A., complaints about robberies and drug abuse at the clinics prompted the city council to shut down several hundred dispensaries over the past few months.

Many of them had opened in spite of a moratorium on new dispensaries because of a legal loophole that allowed them to operate pending an application for exemption. On June 16, the city council enacted a measure to eliminate this exemption.

"This is about the health and safety of those who need marijuana dispensaries to treat conditions including HIV, glaucoma, and cancer," said Councilman Ed Reyes, who sponsored the measure. "This is also about the health and safety of our communities to protect them from nuisance operations."

Medical marijuana was legalized in California with a 1996 state ballot initiative that made marijuana available by prescription to relieve pain or nausea.

Federal law prohibits the use and sale of marijuana even for medical purposes, and that seems unlikely to change soon. Nationwide, about 775,000 people were arrested for marijuana possession in 2007. However, the Obama administration ended raids in states that have legalized medical marijuana – one reason for the recent growth in dispensaries in California.

In 2007, the Los Angeles Police Department (LAPD) expressed concern about the rising number of medical pot sellers and called for a moratorium pending new regulation. The absence of specific zoning rules, officials pointed out, had resulted in a dozen dispensaries opening within 1,000 feet of schools. One dispensary had slipped fliers on the windshields of cars parked outside a high school, the LAPD said.