Why Los Angeles Is Stocked With Legal Marijuana

The only job 31-year-old Jason Beck has ever had is selling weed. He started as a teenager from a trailer park in Pittsburg, Calif., outside Oakland, running what he calls a shop in a box. A shoebox full of marijuana, a list of loyal customers, and a beeper were all he needed 15 years ago. Beck still sells pot, but now from a storefront on sunny Santa Monica Boulevard in West Hollywood. His Alternative Herbal Health Services was one of the first medical cannabis caregiver dispensaries to open up in the Los Angeles area in 2005. At the time, there were fewer than 20 of these legal pot shops in all of Southern California.

Today, L.A. is overrun with close to 1,000 of them. Ever since U.S. Attorney General Eric Holder called off federal raids on dispensaries in February, the number of these businesses in L.A. has exploded in what's being deemed "The Green Rush." But California law prohibits medical-marijuana dispensaries from making profits; they must be run as nonprofit collectives that grow their own merchandise that they sell only to patients with state-issued medical-cannabis cards (available with a doctor's recommendation). Many of the recent newcomers, however, are buying marijuana instead of growing their own, and marking it up for a profit. Unlike Oakland or San Francisco, or even nearby West Hollywood, L.A. has no local ordinance regulating dispensaries. After struggling for two years to draft some form of guidelines, the L.A. city council still has nothing on the books. In the interim, the city has become a cannabis free-for-all.

L.A. County District Attorney Steve Cooley, the same guy who ordered the arrest of Roman Polanski earlier this month in Switzerland, has grown weary of the party. "The vast, vast, vast majority, about 100 percent, of dispensaries in Los Angeles County and the city are operating illegally," he told reporters on Oct. 8. "The time is right to deal with this problem."

Anticipation of the coming crackdown angers Beck, who says a bunch of amateurs looking for a quick buck are ruining what he's worked hard to establish as a legitimate, legal business in compliance with the state's medical-marijuana laws. "Those of us who've been in this for a while, who've established ourselves, we're pissed off because they're riding on the coattails of the work we've put in," he says. "They don't know what it's like to be raided. So, yeah, I'm all for them getting closed. Let them see how it feels."

Beck's shop was one of 11 Los Angeles-area dispensaries raided by the federal Drug Enforcement Administration on Jan. 17, 2007. As he recalls, DEA agents in black SWAT-team gear came smashing through his glass front door around 1 p.m. By then, Beck's shop had been broken into twice already, so he had spent close to $90,000 upgrading security, reinforcing walls, adding bulletproof glass, and installing an electronic-buzzer system that locks the several doors patients must pass through to gain entry to his shop, and ultimately the back room where he keeps his cash and marijuana. When the federal agents came storming in, they found themselves immediately stuck in the small man trap that Beck installed as his first line of defense. It's essentially a steel cage you walk into upon getting buzzed in at the front door. Once inside, patients show their medical-cannabis ID cards to the receptionist, who then buzzes them into the main area. The man trap is big enough for only about four people, so seven or eight DEA agents found themselves smushed on top of each other, faces pressed against the bars, guns drawn. Beck and his receptionist just sat there looking at them. "If we were real gangsta drug dealers, we could have sniped them all out," he jokes.

Once they extricated themselves from Beck's man trap, the agents stayed for four hours and detained everyone who was inside, handcuffing and questioning them all separately. They seized every ounce of marijuana, Beck says, about $500,000 worth, and all his cash too, about $25,000, though he later got an invoice from the DEA claiming they'd seized only $12,500. "Someone pocketed 12 grand," he says. "How corrupt is that?" A DEA spokesperson wouldn't address individual allegations, and would say only that all cash seized during raids is put into evidence bags and taken to a bank where it's counted by bank officials and witnessed by DEA agents. Beck says they also cut all his security-camera wires and finished smashing the glass out of his front door before leaving, resulting in $20,000 in property damage.

Even though California legalized medical cannabis in 1996, and West Hollywood had adopted its own ordinance in 2006 regulating the operation of dispensaries, marijuana is still illegal as far as the federal government is concerned. And it remains the DEA's job to enforce federal drug laws, which trump local and state laws. Still, some local officials were angry about the raids. "Anger is an understatement; we were outraged," says John Duran, a West Hollywood city-council member who was mayor in 2007. "They gave us no heads-up, they came in at the last minute. It was ridiculous."

Beck and other dispensary owners who were raided were never charged with a crime. The DEA says that charges have been filed against three individuals from the 2007 raids. "They just wanted to send a message and try to scare people," says Don Duncan, whose L.A. dispensary was raided on July 25, 2007. He too was never charged.

Beck was back in business a week after the raid, as was JoAnna LaForce, whose dispensary, the Farmacy, located just down Santa Monica Boulevard, was raided that same day. She says the raid cost her $25,000 in property damage. "They threw everything everywhere and made an absolute mess of the place," says LaForce, also not charged with a crime. "But we weathered the storm." Over the past two years, Beck and LaForce say things have been pretty quiet. They maintained their nonprofit collective business model, saying they grow their own pot and sell it only to patients who registered with them and have medical-use cards issued by the state. On the advice of his lawyer, Beck deals only in cash. Since marijuana is illegal under federal law, and credit cards are usually issued by federally regulated banks, using them could potentially trigger a federal money-laundering case. So every month Beck takes a big trash bag of cash to his lawyer's office, who then deposits the money in a trust and pays state sales tax from that.

After the raids, LaForce and Beck continued their efforts to become upstanding members of the business community. They joined the chamber of commerce, and now feel as entrenched as the Whole Foods down the block. The four medical-marijuana dispensaries on Santa Monica Boulevard in West Hollywood generate an estimated $4 million of local sales-tax revenue every year for the city, according to the proprietors. . "We've worked very hard here to establish protocols and standards of operation," says LaForce. "And we've been very active in trying to establish a sensible ordinance for all of Los Angeles. But it just hasn't happened, and now it's like were back to Reefer Madness," she says, referring to the church-sponsored anti-marijuana film made in 1936 that's become a cult classic.

LaForce shares Beck's animosity for the profiteers she says are taking advantage of the lack of a city ordinance to make a quick buck. She feels confident that when the raids do start up again, nonprofit collectives like hers and Beck's will be spared. But that depends on whether law enforcement will differentiate between those that are operating illegally and those that have been in compliance with the local law. "We're all a little more nervous these days," she says. Duran says that West Hollywood city-council members have explicitly reminded their sheriff that marijuana is not a priority, and not to cooperate with the L.A.P.D. in any attempts to raid or shut down dispensaries. "But," Duran adds, "Steve Cooley is our D.A. here in West Hollywood." The D.A.'s office tells NEWSWEEK that Cooley believes dispensaries operating properly under the law should be safe. He just doesn't know of any collectives that are currently operating as such.

As for Beck, he recently downloaded a Cannabis Club app for his iPhone that pinpoints the location of all the dispensaries around L.A. When he types in a ZIP code, Beck marvels at the hundreds of pushpins that go flying into almost every strip mall and shopping center and even residential neighborhoods. "We're totally oversaturated," he says. Just a few weeks ago, a shop opened up only a couple of blocks from Beck's dispensary. He's driven by a few times, and gone to its Web site. The place looks nice: flat-screen TVs, sofas and glass tables and plush carpets. It looks like an upscale hair salon. "They clearly put a lot of money into it," Beck says. "We'll see how long they last."