Saturday, July 24, 2010

Small Marijuana growers oppose corporate Hydrophonic farms.

A proposal to create four large-scale marijuana factories in Oakland has touched off a turf war in the lucrative market for medicinal marijuana. Established local merchants are trying to hold their ground against entrepreneurs who are seeking to gain a foothold in the rapidly evolving industry.

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Under the proposal, which will be debated by the City Council on Tuesday, Oakland would issue four permits to operate the factories, which are currently not limited in size or scale. One would-be applicant is planning a 7.4-acre complex that could produce over 21,000 pounds of marijuana a year.

Based on current prices, such a factory would generate about $60 million in annual revenue, more than twice the gross receipts for Oakland’s four medical marijuana dispensaries last year.

Taxes on cannabis cultivation and sales could generate millions of dollars for Oakland, once the program is up and running, and create hundreds of jobs, according to supporters. The ordinance — written by Councilwoman Rebecca Kaplan, who is also a mayoral candidate, and Councilman Larry Reid — would also require the factories to pay a $211,000 “regulatory fee.”

“I think it’s a total win-win for everyone,” Ms. Kaplan said last week, after the Public Safety Committee voted 3 to 1 on Tuesday to send the cultivation ordinance to the full City Council.

The proposal is creating discord between businesses seeking to preserve the status quo and others who are trying to carve out new businesses in advance of Proposition 19, a November ballot measure that would legalize marijuana for adult recreational use in California.

“It’s big business; you’re talking about manufacturing gold,” said Jeff Jones, a longtime marijuana activist working with the legalization effort. “There’s going to be stakeholders, different opinions and different approaches, which lead to bickering like in any other marketplace.”

One of the most vocal critics of the cultivation proposal is Stephen DeAngelo, executive director of Harborside Health Center, the largest medical marijuana dispensary in the world. With outlets in Oakland and San Jose, Harborside has 58,000 members, or patients, who can buy dozens of strains of marijuana packaged in vacuum-sealed bags or in edible forms ranging from cookies to gelato.

The dispensary receives its marijuana from about 400 member/suppliers who deliver one or two pounds of cannabis at a time. Allowing large-scale production in Oakland would crowd out those small growers, according to Harborside officials and the dispensary’s lawyer.

“Why does this whole new system have to be created?” Mr. DeAngelo asked in an interview. “Let’s bring these citizen farmers out of the shadows and into the light and give them a role in this new industry.”

Jeff Wilcox, a Bay Area businessman, is an outspoken proponent of the industrial pot permits as well as a leading advocate for the Proposition 19 initiative. Mr. Wilcox is hoping to obtain one of the four permits to build AgraMed, a marijuana production complex on 7.4 acres beside Interstate 880 near Oakland International Airport.

AgraMed would include a bakery to create edible forms of marijuana, a lab to test for potency and contaminants and 100,000 square feet of cultivation space. If he obtains a permit, Mr. Wilcox said, he will offer to lease space to smaller growers.

James Anthony, a lawyer for Harborside, said Mr. Wilcox was a “Johnny-come-lately” motivated by profit, not by the desire to help patients who use marijuana for medical reasons.

Mr. Wilcox responded that Harborside and its supporters had been “sitting in the back just waiting.”

“They started this campaign of lies to kill the cultivation permits,” he said.

Mr. DeAngelo said he was not opposed to the Oakland plan, but wanted to see a permit process that would benefit smaller growers, an opinion that was echoed by many Tuesday at the meeting of the Public Safety Committee.

Oakland is known as a marijuana-friendly city, but friendliness was sometimes in short supply last week as Council members heard hours of contentious public comment on the proposed ordinance.

The Council chambers were filled with members of the Bay Area cannabis industry: dispensary owners, lawyers specializing in medical-marijuana law, would-be permit applicants, subcontractors who see the proposed factories as a means to expand their businesses and growers of all stripes.

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“I think this ordinance is nothing more than a municipally sanctioned monopoly on medical cannabis,” one grower told the committee.

In a compromise effort, Vice Mayor Jean Quan and Councilwoman Patricia Kernighan suggested that Ms. Kaplan and Mr. Reid devise a similar permit process for medium-sized facilities. Those new rules will be up for discussion in September, but in the meantime, some growers worry that they are being run out of business.

“It’s politics,” said Dan Grace, who runs a 3,000-square-foot nursery for young pot plants called clones. “All you can count on is what we have now, and what we have now is not a process that allows for medium-sized growers.”

Councilwoman Nancy Nadel drew some applause from the audience when she raised concerns that the cultivation ordinance was not legal under state or federal law. “I don’t see any rush to do this until we know what happens in November,” Ms. Nadel said, referring to the ballot initiative.

Ms. Quan warned, however, that if Oakland did not act quickly, other cities could seize the opportunity to become a hub for the expanding medical-marijuana industry. “I want Oakland to be in place, so I want to move this out,” she said.

The debate was heated in part because the proposed ordinance has gone through several revisions, and rumors have swirled about the regulations. City Council members said they received a flood of calls amid concerns that all dispensaries would be required to buy marijuana from the industrial facilities. But that is not a requirement.

Until recently, cultivation of medical marijuana has not been closely regulated in any California cities.

“Our real goal is to eliminate a lot of the public problems stemming from illegal and unregulated cultivation,” said Dhar Mann, an Oakland businessman who plans to apply for one of the permits if the proposal passes.

A report attached to the proposal said residential electrical fires in Oakland rose from 133 in 2006 to 290 in 2009, a spike, it said, “likely attributable to cannabis cultivation.” There were also eight robberies, seven burglaries and two homicides linked to marijuana growing, the report said.

Mr. Mann, 26, owns a 15,000-square-foot hydroponic supply store called iGrow, which will soon open franchises in eight states. He recently scouted another large-scale warehouse with an architect and security contractor in the hope of growing marijuana there.

If he receives a permit, Mr. Mann said, he will outfit the building with solar panels, a grass roof and a state-of-the-art security system.

New Jersy to become 15th State recognizing Medical Marijuana...yet the Feds STILL list it as Schedule 1 Narcotis as having "no medical use."

Five months before its new medical marijuana law is set to take effect, New Jersey this week moved further away from having answers to basic questions about how the law will work — specifically, who will grow the marijuana and who will dispense it.

Chris Christie’s administration had been pursuing a plan to make Rutgers University the only approved cultivator of cannabis, and to make teaching hospitals the only places where patients could get it.

But on Thursday, Rutgers announced that it would not participate for fear of losing grants from the federal government. State officials said the hospitals had the same concern.

State laws legalizing medical marijuana are at odds with federal law. The Obama administration has stopped the practice of raiding marijuana dispensaries in those states, but the Drug Enforcement Administration remains reluctant to grant permission to grow the plants, even for medical research.

“This is genuinely something we were interested in doing,” said Robert M. Goodman, the executive dean of agriculture and natural resources at Rutgers. “We have agricultural stations; we have programs in medicinally reactive plants, in chemical biology, in pharmacy. It’s a potential new crop for the state, and we’re interested in promoting the state’s economy.”

But, he added, “it just puts too much at risk,” jeopardizing research grants, contracts, student aid or other funds from Washington.

Fourteen states have passed laws allowing medical use of marijuana, but New Jersey’s, signed in January, is in some ways the strictest. The law was written to prevent the proliferation of growers and dispensaries seen in states like California and Colorado, at first limiting the state to six dispensaries run by nonprofits, and it prohibits patients from growing the plants themselves.

New Jersey allows doctors to prescribe marijuana only for patients with terminal illness or a fairly limited set of specific, chronic conditions, and limits each person to two ounces per month, compared with as much as 24 ounces in other states.

Governor Christie, a Republican who took office days after the law was enacted, has sought to make it still more restrictive in the way it is carried out. The administration is supposed to put regulations in place for carrying out the law by Oct. 1, and the law is scheduled to go into effect on Jan. 1.

Michael Drewniak, the governor’s chief spokesman, said Friday that the administration still expected to have dispensaries ready to open in 2011.

“As we’ve said all along, we’ve been considering other options beyond the Rutgers plan,” Mr. Drewniak said, “and we will continue working diligently to implement a high-quality and secure program.” He declined to elaborate.

The governor is angry about the university’s decision, according to officials who were granted anonymity to comment on private discussions, and so are some legislators. Assemblyman Reed Gusciora, a Democrat from Mercer County who was one of the primary sponsors of the legalization bill, said “the university is chickening out” by not testing federal authorities’ willingness to grant a waiver.

State Senator Nicholas P. Scutari, a Democrat from Linden who was the other main sponsor, said that Mr. Christie wanted too much control over the program and that the state would have no choice but to approve private growers.

“We’ve known this was going to be a concern for Rutgers from the get-go, but the administration indicated no, it’s not going to be a problem,” Mr. Scutari said. And the hospitals, he said, “have got the same exact issue.”

The New Jersey Council of Teaching Hospitals declined to comment, but several people briefed on the discussions said the hospitals wanted some kind of guarantee that they would not be jeopardizing federal money.

Mr. Christie has said he had concerns about how to carry out the law with enough security. At his request, the Legislature delayed putting the law into effect for 90 days.

The plan to use Rutgers and teaching hospitals would have given the state far more direct control over the program than the Legislature intended, but for the most part, lawmakers said they were amenable to the idea if it would work.

Veteran's Hospitals easing rules on Medical Marijuana us will not affect hosptals in Fort Worth, Texas

DENVER — The Department of Veterans Affairs will formally allow patients treated at its hospitals and clinics to use medical marijuana in states where it is legal, a policy clarification that veterans have sought for several years.

A department directive, expected to take effect next week, resolves the conflict in veterans facilities between federal law, which outlaws marijuana, and the 14 states that allow medicinal use of the drug, effectively deferring to the states.

The policy will not permit department doctors to prescribe marijuana. But it will address the concern of many patients who use the drug that they could lose access to their prescription pain medication if caught.

Under department rules, veterans can be denied pain medications if they are found to be using illegal drugs. Until now, the department had no written exception for medical marijuana.

This has led many patients to distrust their doctors, veterans say. With doctors and patients pressing the veterans department for formal guidance, agency officials began drafting a policy last fall.

“When states start legalizing marijuana we are put in a bit of a unique position because as a federal agency, we are beholden to federal law,” said Dr. Robert Jesse, the principal deputy under secretary for health in the veterans department.

At the same time, Dr. Jesse said, “We didn’t want patients who were legally using marijuana to be administratively denied access to pain management programs.”

The new, written policy applies only to veterans using medical marijuana in states where it is legal. Doctors may still modify a veteran’s treatment plan if the veteran is using marijuana, or decide not to prescribe pain medicine altogether if there is a risk of a drug interaction. But that decision will be made on a case-by-case basis, not as blanket policy, Dr. Jesse said.

Though veterans of the Vietnam War were the first group to use marijuana widely for medical purposes, the population of veterans using it now spans generations, said Michael Krawitz, executive director of Veterans for Medical Marijuana Access, which worked with the department on formulating a policy.

Veterans, some of whom have been at the forefront of the medical marijuana movement, praised the department’s decision. They say cannabis helps soothe physical and psychological pain and can alleviate the side effects of some treatments.

“By creating a directive on medical marijuana, the V.A. ensures that throughout its vast hospital network, it will be well understood that legal medical marijuana use will not be the basis for the denial of services,” Mr. Krawitz said.

Although the Obama administration has not embraced medical marijuana, last October, in a policy shift, the Justice Department announced that it would not prosecute people who used or distributed it in states where it was legal.

Laura Sweeney, a spokeswoman for the Justice Department, would not comment spefically on the veterans department policy. “What we have said in the past, and what we have said for a while, is that we are going to focus our federal resources on large scale drug traffickers,” she said. “We are not going to focus on individual cancer patients or something of the like.”

Many clinicians already prescribe pain medication to veterans who use medical marijuana, as there was no rule explicitly prohibiting them from doing so, despite the federal marijuana laws.

Advocates of medical marijuana use say that in the past, the patchwork of veterans hospitals and clinics around the country were sometimes unclear how to deal with veterans who needed pain medications and were legally using medical marijuana. The department’s emphasis on keeping patients off illegal drugs and from abusing their medication “gave many practitioners the feeling that they are supposed to police marijuana out of the system,” Mr. Krawitz said.

“Many medical-marijuana-using veterans have just abandoned the V.A. hospital system completely for this reason,” he said, “and others that stay in the system feel that they are not able to trust that their doctor will be working in their best interests.”

In rare cases, veterans have been told that they need to stop using marijuana, even if it is legal, or risk losing their prescription medicine, Mr. Krawitz said.

David Fox, 58, an Army veteran from Pompey’s Pillar, Mont., uses medical marijuana legally to help quiet the pain he experiences from neuropathy, a nerve disorder. But he said he was told this year by a doctor at a veterans’ clinic in Billings that if he did not stop using marijuana, he would no longer get the pain medication he was also prescribed.

A letter written to Mr. Fox in April from Robin Korogi, the director of the veterans health care system in Montana, explained that the department did not want to prescribe pain medicine in combination with marijuana because there was no evidence that marijuana worked for noncancer patients and because the combination was unsafe.

“In those states where medical marijuana is legal, the patient will need to make a choice as to which medication they choose to use for their chronic pain,” Ms. Korogi wrote. “However, it is not medically appropriate to expect that a V.A. physician will prescribe narcotics while the patient is taking marijuana.”

Mr. Fox was shocked by the decision, he said.

“I felt literally abandoned,” he said. “I still needed my pain meds. I thought they were supposed to treat you. It was devastating for me.”

Mr. Fox, who said that at one point he was weaning himself off his pain medication for fear of running out, has held one-man protests in front of the clinic, carrying signs that read “Abandoned by V.A., Refused Treatment.”

Veterans officials would not comment on specific cases, citing medical privacy laws.

This month, Dr. Robert A. Petzel, the under secretary for health for the veterans department, sent a letter to Mr. Krawitz laying out the department’s policy. If a veteran obtains and uses medical marijuana in accordance with state law, Dr. Petzel wrote, he should not be precluded from receiving opioids for pain management at a veterans facility.

Dr. Petzel also said that pain management agreements between clinicians and patients, which are used as guidelines for courses of treatment, “should draw a clear distinction between the use of illegal drugs, and legal medical marijuana.”

Dr. Jesse, the veterans department official, said that formalizing rules on medical marijuana would eliminate any future confusion and keep patients from being squeezed between state and federal law.

Steve Fox, director of government relations for the Marijuana Policy Project, which favors the legal regulation of the drug, called the decision historic. “We now have a branch of the federal government accepting marijuana as a legal medicine,” he said.

But Mr. Fox said he wished the policy had been extended to veterans who lived in states where medical marijuana was not legal.

He said it was critical that the veterans department make its guidelines clear to patients and medical staff members, something officials said they planned on doing in coming weeks.

Said Dr. Jesse, “The whole goal of issuing a national policy is to make sure we have uniformity across the system.”