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 3)

Lawrence said he distributes marijuana from hubs in Northern and Southern California using third-party carriers “who adhere to pharmaceutical delivery protocols.” He declined to name the carriers, but claimed the operation was in line with state law.

“We’ve done our homework in terms of what is allowable and legal,” he said.

Avoiding the costs associated with operating a storefront saves his operation money, but Lawrence said running a delivery service isn’t cheap. And robbery is a real threat. That’s one reason he expects only a few operations could grow into large-scale businesses—unless pot is legalized.

“To set up a delivery service that could go corner to corner around the state would be hugely expensive,” he said.

Elsewhere, some operations are modeling themselves on organic farms that deliver distinctive boxes of fruits and vegetables directly to customers’ homes. Matthew Cohen, owner of Northstone Organics, pioneered what he calls “farm-direct medical marijuana.” The Ukiah-based cooperative grows and delivers marijuana to a network of some 500 qualified patients in the nine Bay Area counties.

On a recent afternoon, Cohen stood in a rain jacket and muddy boots, scanning a large garden patch at the rear of his 10-acre farm. Surrounding the area was a network of laser trip lines and high-resolution cameras.

Marijuana from last year’s crop is stored in small canning jars in a nearby warehouse. Each week, after taking orders from Northstone’s website and over the phone, Cohen packs the jars into small paper bags.

Northstone’s business has grown briskly. Six months ago, Cohen was driving into the Bay Area twice a week and making the deliveries himself. Now he’s hired new workers who make deliveries five times each week.

In some Bay Area newspapers, Northstone advertises its product as “sustainably grown” in greenhouses, unlike much of the marijuana offered at storefront dispensaries, which is cultivated indoors under powerful, 1000-watt grow lights.

By keeping production and distribution costs low, Cohen said he could offer his medical marijuana at a discount of 30 to 40 percent. And Cohen’s operation recently got a boost when Mendocino County passed regulations increasing the number of pot plants that can be legally grown on a parcel of land, from 25 to 99. This allows him to compete more effectively against large, urban storefronts.

“It’s a competitive marketplace,” he said.

Cohen said he has obtained business licenses for every county he operates in. And officials from eight Bay Area towns and counties said their current regulations do not apply to delivery services based outside their jurisdiction.

“We are not regulating those types of operations,” said Jim Soos, a spokesman for San Francisco’s health department.

From dealing drugs to “dispensing medicine”

Marijuana delivery services are attracting a wide range of players. Some sold drugs on the black market for years and now see an opportunity to bring their operations out of the shadows.

“In some people’s minds, I’m a drug dealer,” said one woman who runs a delivery service in Los Angeles and agreed to talk about her business under the condition that her name and specific areas of operation within Los Angeles County not be revealed. “But what I’ve tried to do is comply to the laws of Los Angeles County so that I am not just the average pot dealer, but am dispensing medicine to my patients.”

Like most delivery services, the woman’s business operates as a nonprofit collective, with members making “donations” in exchange for marijuana cultivated by growers in the Los Angeles area and rural regions of California.

But to transform her former customers into legal patients, the woman holds unusual gatherings: Sunday brunches at her home where a doctor evaluates the invited guests in a private room at a discount rate and then signs off on recommendations for medical marijuana.

On a recent Sunday afternoon, about 40 people gathered at the woman’s home for a “doctor’s party.” They ranged in age from early 20s to around 60, included slightly more men than women and appeared to include mostly young and middle-age professionals, and a few stereotypical-looking stoners.

The invited guests paid $100 apiece to see the doctor – less than the $175 he normally charges for an office visit.

“It’s what you would normally go through in the doctor’s office, only in a much more comfortable environment,” said the operator of the collective.

She and her small, all-female staff are on call noon to 8 p.m. every day and deliver anywhere in Los Angeles County. She says she employs female drivers because they are less threatening to customers. On an average week, the service delivers one to two pounds of marijuana packaged into colored packets usually weighing an eighth of an ounce and costing between $50 and $70.

“I have doctors. I have lawyers. I have [school] principals,” she said on a recent delivery run, which included a Starbucks parking lot and a film production studio. “I have teachers. I have nurses, doctors, who don’t want to be seen going into a dispensary.”

As the wait to see the doctor stretched to an hour, the hostess led guests to a backyard buffet of mimosas, bagels and lox, chili and marijuana-infused edibles, including blueberry crumble bars and assorted cookies.

At the rear of the property was a free-standing garage converted into a studio living area. Inside, a card table displayed thick, neatly rolled joints, grouped by marijuana strain. Two bongs—one of them almost two feet high—stood alongside bowlfuls of trimmed, high-quality buds.

While becoming a collective has perhaps legitimized the woman’s business, it has not led to many additional customers. The woman said she has fewer clients and had to drop her prices to be competitive with storefront dispensaries. When she sold pot on the black market, she had about 500 clients. She now has about half that amount. But with hundreds of dispensaries facing city orders to close, the woman is hoping to recover lost business as dispensary clients move instead to delivery services.

“I absolutely believe it will help my business,” she said. “People will return who have been going to dispensaries out of sheer convenience.”

This story was reported in collaboration with KQED public radio, with assistance from the USC Annenberg School for Communication & Journalism. It was edited by Robert Salladay and copy edited by William Cooley.

California Watch is a project of the Center for Investigative Reporting, with offices in the Bay Area and Sacramento.

Multimedia Links:

MAP: Medical marijuana delivery services in California
June 3, 2010 | Lisa Pickoff-White and Sarah Terry-Cobo

VIDEO: Delivering marijuana from plant to pipe
June 3, 2010 | Lisa Pickoff-White

From KQED’s California Report
Medical Marijuana Finds Another Avenue in Los Angeles
Friday, June 4, 2010. Reporters: Michael Montgomery & Gary Cohn

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