Vendor's reefer sadness

December 26, 2006

Eric Bailey, Los Angeles Times

San Francisco — Kevin Reed launched his medical marijuana business two years ago, armed with big dreams and an Excel spreadsheet.
Happy customers at his Green Cross cannabis club were greeted by "bud tenders" and glass jars brimming with high-quality weed at red-tag prices. They hailed the slender, gentle Southerner as a ganja good Samaritan. Though Reed set out to run it like a Walgreens, his tiny storefront shop ended up buzzing with jazzy joie de vivre. Turnover was Starbucks-style: On a good day, $30,000 in business would walk through the black, steel-gated front door.

Today, the 32-year-old cannabis capitalist is looking for a job, his business undone by its own success and unexpected opposition in one of America's most proudly tolerant places. Critics in nearby Victorian homes called Reed a neighborhood nuisance. Although four of five San Francisco voters support medical marijuana, the realities of dispensing the contentious medicine have proved far more controversial.

It has been 10 years since California approved Proposition 215 — the Compassionate Use Act — becoming the first state to define marijuana as a medicine. The 389-word act aimed to ensure seriously ill Californians the right to use marijuana. But it said nothing about how they might get the drug — and left ample regulatory ambiguity.

Today, about 200,000 Californians have a doctor's permission to use cannabis, which they can obtain through more than 250 dispensaries, delivery services and patient collectives — 120 of them in Los Angeles County alone. Medical marijuana, activists say, has become a $1-billion business.

There's been plenty of blowback. Local governments have been grappling with how to regulate storefront sales, still prohibited under federal law despite California's tolerance.

Though two dozen cities and seven counties — including Los Angeles, Riverside and Santa Barbara — have approved regulations allowing dispensaries, more than 90 others have passed moratoriums on new suppliers or banned them outright. Earlier this month, a Superior Court judge rejected a challenge to the medical marijuana law by Merced, San Bernardino and San Diego counties.

FEW in the medical marijuana business have seen as steep a commercial rise and fall as Reed.

He got into the marijuana business by accident — literally.

Reared outside Mobile, Ala., he was a skinny country boy who never got past ninth grade, the gay kid in a family of rednecks. An auto wreck at 18 left him gimpy and in enough chronic pain, he says, to try cannabis for relief.

Reed eventually took to smoking a dozen joints most days. He moved to the Bay Area in the mid-1990s, along with the official arrival of medical marijuana.

Dennis Peron, the author of Proposition 215, ran a hip, high-profile cannabis buyers' club that was part speak-easy, part Haight-Ashbury hangover. Support for medical marijuana was de rigueur for politicians and residents.

Scraping by on an office manager job, Reed tried cultivating his own cannabis under grow lights in his cramped apartment. He never managed much of a crop, but he did attract attention — he thinks from the off-duty cops who frequented a restaurant nearby. Police busted his operation and tore out 33 plants. Only a friendly pro bono attorney kept Reed out of jail.

Reed says he launched Green Cross to make his medicine affordable. In the South, he had sold mobile homes and run an electric-appliance repair business and a truck stop cafe. Marketing medical marijuana, he figured, wouldn't be much different.

Flanked by a hairstylist and an Irish bar, the 300-square-foot club opened in July 2004 in a neighborhood called Fair Oaks. Located between the Mission District and Noe Valley, it is a place where blue-collar families mix with urban professionals pushing strollers. The main street closes to traffic on Halloween for trick-or-treaters.

Reed thought Green Cross would fit in because it would be easygoing, natty, safety-conscious and hip, just like him.

The outside was marked by a neon-green cross. At the door, security checked each patient for medicinal bona fides: a doctor's written permission or the city's formal medical cannabis ID card. The blush-red interior rocked with music videos on a plasma TV. Reed's prices — $40 for one-eighth of an ounce — were two-thirds what other clubs charged.

He offered 55 varieties of raw weed, purchased on consignment from patients who grew more than they needed. Shark Shock, Ogre, Queen Kong, Hindu Kush — an information sheet listed taste, ailments assuaged, type of high (including "muscle relaxer," "great mind drift" and "couch lock"). A pastry chef concocted marijuana-laced peanut brittle, cannabis cookies with Ghirardelli chocolate chips, pot peanut butter.

Reed dutifully kept his records on QuickBooks, paid employee health insurance and nearly $200,000 a year in taxes. He lived in an apartment and drove an aging Miata.

He wasn't getting rich, Reed insists — just medicated.



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