Marijuana Delivery Services Evade Bans on Dispensaries

Posted on Jun 6, 2010

Flickr / JosephLenoardo (CC-BY-SA)

By Gary Cohn and Michael Montgomery, California Watch

(Page 2)

Dispensaries under pressure

Nowhere is the boom in pot delivery more evident than in Southern California. Until recently, Los Angeles was ground zero in the rapid growth of medical pot outlets, with dispensaries outnumbering Starbucks locations along some commercial strips.

That era may be ending. In January, the Los Angeles City Council approved an ordinance that led city attorneys to order the closing of 439 dispensaries. An estimated 135 will be allowed to remain if they follow new regulations, but action could be imminent on the others.

The Los Angeles city attorney’s office has warned dispensary owners in violation of the ordinance that they could face civil or criminal penalties if they do not close by June 7.

In the face of the crackdown, some dispensaries have already shuttered their storefronts and rebranded themselves as delivery services. “They tell us, ‘we still want to be listed on your website. We’re just turning into a delivery service,’ ” said Hartfield of Weedmaps.com.

Dann Halem, a former freelance journalist, founded the Artists Collective delivery service 18 months ago after he started using marijuana to treat a rare hormone condition. He quickly saw the benefits of distributing marijuana directly to customers rather than running an expensive storefront.

“You don’t have to rent property,” he said. “You don’t have to deal with security cameras. You don’t have to have a security guard. We have glass dealers calling us, thinking we’re a storefront, asking us if we’re interested in some bullet-proof glass. You could spend money left and right to start a store.”

Together with a business partner, Halem logs hundreds of miles each week to fill phone and Internet orders for 500 or so clients. He said he doesn’t charge extra for delivery, but sets a minimum amount of marijuana a patient must buy, depending on the distance. If the customer is within 10 miles, the minimum is one-eighth of an ounce; within 20 miles, one-quarter of an ounce; within 30 miles, three-eighths of an ounce.

“The more gas we have to use, the more wear and tear on the car, the higher the minimum is,” Halem said.

Just days after Los Angeles ordered a crackdown on the city’s teeming medical marijuana dispensaries, Halem drove to a downtown residential hotel to deliver half an ounce of high-grade pot. At the hotel, Halem met up with Leonard Lombardo, a 50-year-old Gulf War veteran undergoing treatment for throat cancer. The two men spoke casually and then Lombardo paid for the marijuana, which his doctor had recommended to treat chronic pain and stimulate his appetite.

“These are people who don’t have cars. They can barely walk,” said Halem, who nevertheless acknowledges that most of his clients are not severely ill. “So it’s absolutely critical for there to be delivery services in some way.”

Kris Hermes, a spokesman for Americans for Safe Access, said if delivery services are operating as collectives or cooperatives they are protected under state law. He said all members must be qualified patients or caregivers, the operator must verify each patient’s status under legal guidelines and the delivery services must organize as nonprofits.

For his part, Halem is still taking precautions. He hired a lawyer and an accountant to help him establish his collective as a nonprofit California public benefit corporation. Profits are donated as grants for artists, he said.

Late last year, he moved his base of operations out of Los Angeles in the run-up to the city council vote. He now has an office in West Hollywood, which has well-established medical marijuana regulations. But he delivers to patients living throughout Los Angeles. Still, he conceded that a lack of regulations covering delivery services has left open the possibility of abuse.

“To start a delivery service, whether your intentions are good or bad, you need a car, a cell phone and marijuana,” he said. “That’s not the way we operate. But I’d say the majority of delivery services are just that. And they really are in a lot of respects glorified drug dealers because there’s no oversight, there’s no accreditation, there’s nothing.”

Halem said he’s sent e-mails to the city councils in West Hollywood and Los Angeles urging members to regulate the marijuana delivery trade. But officials in Los Angeles told California Watch that the issue was not raised during the debate over medical marijuana.

Los Angeles City Councilman Dennis Zine said the council’s decision to restrict storefront dispensaries was driven by complaints from community groups and law enforcement. So far, the council hasn’t received any complaints about delivery services, he said.

“Who’s going to complain?” Zine said. “The person who’s receiving [the marijuana] is not going to complain. The person who’s delivering is not going to complain. The neighbor is not going to complain because they don’t know what’s going on.”

Low overhead, lax regulations

In Northern California, there are fewer delivery services but some of the operations cover large areas, spanning multiple counties and cities.

One new company, Mediharvest, promises to deliver marijuana to qualified patients anywhere in the state via commercial carriers. Mediharvest promotes its service to people who “don’t want to be seen at the store,” who want high-quality pot, who don’t want to support illegal drug cartels, and who “want to change the attitude of medical marijuana use in America.”

Another new online dispensary, C420, says it will ship pot overnight to qualified medical marijuana users at “almost any legal address in California.” The owner, who goes by the assumed name of Matthew Lawrence, said the Bay Area-based company is registered as a nonprofit collective and has signed up 1,000 qualified medical marijuana users across the state since its launch in April.

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