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Meet the People Behind America's Underground, Medical Weed Trade

Nicholas Schou's new book documents the schizophrenic relationship between medical marijuana and the law, as the pot industry attempts to shift from underground to mainstream.
 
 
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Photo Credit: Chicago Review Press

 
 
 
 
The following is an excerpt from The Weed Runners: Travels with the Outlaw Capitalists of America's Medical Marijuana Trade by Nicholas Schou ( Chicago Review Press, 2013): 
 
“That’s some pretty good-looking herb you got there.”
 
It’s about 10:00 AM on a brisk November day, and I’m driving my rental car out of Oakland International Airport. Christopher Glew is talking to his client, a man who for the purposes of this book we’ll call Lucky, who has just opened up his carry-on backpack to reveal three ounces of freshly manicured marijuana. The weed amounts to a sample kit of a freshly harvested Snowcap strain which Lucky grew at one of his nurseries in Southern California. He plans to show it to a potential buyer in the Bay Area, in the hopes of arranging a large-scale deal—although Glew knows nothing of this plan and Lucky won’t reveal it to me until later, when he apparently figures that I might somehow help him pull it off.
 
At the moment, we’re heading to a meeting with the owners of a medicalmarijuana delivery service called the Green Spot, the largest such operation in the San Francisco Bay Area. Instead of his usual pinstripe-suit-and-monogrammed-cufflinks courtroom attire, Glew is dressed in jeans and a black-and-orange leather jacket with the Harley Davidson logo splashed across the shoulders. Lucky is wearing a Los Angeles Angels of Anaheim baseball cap, a baggy designer jersey, and even baggier black jeans. He’s in a particularly good mood, and hasn’t stopped talking since he got in the car. 
 
“You know what’s interesting?” Lucky asks.
 
As usual, he doesn’t wait for an answer.
 
“I called TSA to find out how much I could take on the plane and they said it’s all determined by the doctor.” 
 
“TSA said that, really?” Glew asks, not buying it.
 
“Yeah,” Lucky says. “And then I called Southwest Airlines and they said, ‘We have no policy at all about weed.’ So I’ve been flying with three or four ounces now. The last time I flew, I took it right out on my seat tray and started looking through the samples.”
 
“No you didn’t,” Glew says.
 
“I swear to God, I did,” Lucky insists. “I’ll do it on the way back. I’ll film the whole thing. I should put it on YouTube, because everyone I’ve told about this can’t believe I would do it. But I had to bring some samples on the plane because I’ve got some stuff that will get some amazing [prices] up here.” 
 
The high-grade marijuana Lucky is carrying sells for $800 a pound in California, but could easily earn $2,000 or $2,500 per pound in New York City. Or at least that’s what Lucky says. He would know because, as it happens, he arranges cross-country deals every few weeks. “You sell in the right place, and there you go, you’re making $1,300 a pound. Do a hundred deals like that, and well, that’s what everyone is trying to do out here: pack up as many of these things as they can and ship them back east.”
 
As we head north from the industrial outskirts of Oakland into the steep, treelined hills of Berkeley, Lucky’s lecture about the economics of pot smuggling rapidly devolves into a litany against the Mexican drug cartels he says are ruining the industry. 
 
“They come up here and buy strains from Americans—we’re talking California growers who have high-end strains,” he says. “And they’ll buy these clones that are guaranteed female. They buy the plants! They’ve learned enough now to turn some of these plants into mothers, so they are learning to clone. And that is something they’ve never done in the past—you’ve never seen the Mexicans cloning.”
 
Lucky and other California-based pot cultivators and distributors have no choice but to grow their crops on their own land, or on rented properties, like warehouses, where they can hide large indoor nurseries. The cartels, meanwhile, tend to establish vast outdoor plantations deep inside US National Forest areas. “They’re camping out there and have so much time on their hands while their gardens are developing, so they start making speed,” Lucky complains. “They’re making amphetamines because they can turn that around in a week and use those revenues to generate and finance their gardens.”
 
As the cartels have become more adept at competing with their American competitors, they’re constantly on the hunt for access to not only new, higher-end strains, but also technical expertise. “I was personally offered a large sum of money to go to Michoacan and teach them how to make oils and extracts,” he says, referring to the various concentrated byproducts of marijuana, mostly liquids like hash oil that pack a powerful high, or solids that can be turned into pill form or baked into edible products like pot brownies. These products can be made purely from the “trim,” or excess leaves that are typically manicured off the marijuana before sale, and which usually end up as garden waste.
 
“Let’s say you have a million-dollar garden,” Lucky explains. “The trim is 15 percent of your yield. The Mexicans want to learn how to use it so they can add another $150,000 to [their] revenues. So these guys have realized they have a lot of trim and now they’re paying people to come down and teach them—offering to put people up in nice, beautiful million-dollar homes that overlook the ocean, and all the women that you want, and someone offered me . . . that a couple of weeks ago.”
 
Lucky says he refused the offer because he didn’t have the “political ties” to feel safe while south of the border. “I would never go to Mexico,” he says. “But they’re looking for people and they’re willing to pay big money. I can guarantee you: in my little circle of people that I’ve taught how to make the crap, there’s somebody that’s hungry enough for twenty or thirty grand right now that will jump on that bandwagon. It’s just going to be a matter of who that guy is. And once he’s done that, they’re going to learn that trade, and then it just becomes infectious, and now watch what they’re smuggling in: oils and hash and pot that sells in America for $1,500 a pound and they’ve got it for $600 a pound!”
 
So far, there’s no evidence that the cartels are smuggling oils, extracts, or edibles into the United States, but Lucky’s right about their growing sophistication when it comes to breaking into the high-grade medical-marijuana market. On November 15, 2011, for example, US Department of Homeland Security agents seized seventeen tons of marijuana on the US-Mexico border when they discovered a tunnel that appears to be the passage of one of the largest cross-border smuggling operations in recent years. 
 
According to an Associated Press story on the bust, the tunnel was some four hundred yards long and stretched between a pair of warehouses on either side of the border—one in San Diego and the other in Tijuana. The feds told the AP that the tunnel was “one of the most significant secret passages ever found on the US-Mexico border.”
 
Both US and Mexican feds cooperated on the bust. Nine tons were retrieved from the warehouse in San Diego and eight tons were found on the Mexican side of the border. Agents apparently had the US warehouse under surveillance, and followed two men “in a truck packed with about three tons of pot.” A California Highway Patrol officer pulled the truck over and “was overwhelmed by the smell,” the AP reported.
 
Of course there’s nothing too unusual about the feds seizing tons of pot headed into the US from south of the border. Two similar tunnels discovered in 2010, for example, led to the seizure of some fifty tons of weed. But what made this particular bust interesting is the kind of marijuana that was seized. It wasn’t the generic Mexican brick weed, but stuff that wouldn’t have looked out of place on the shelves of the most well-appointed dispensaries in California. To top it off, the Mexican pot was even packaged to look like homegrown medical marijuana, complete with labels that had the names of all-American-sounding strains such as Sprite, Bud Light, and Captain America.
 
Green Spot Delivery is the Bay Area’s largest medical-marijuana delivery service. The business office is a converted Victorian-era house located on a leafy block and next door to a breakfast diner. Hoyt, one of the company’s owners, is tall and blond, and his square jaw, steady gaze, and lanky good looks suggest the confidence of a college-educated jock. He sends his secretary out on a coffee run while he explains how, just a few months earlier—the office is so new that you can still smell the white paint drying on the interior walls—he opened the Green Spot with his silent-investor associate, a man who for the purposes of this book prefers to be identified as El Machino.
 
His interest in medical marijuana started in 2006, when he severed his middle finger while opening a bottle of wine at a Los Angeles restaurant where he was working as a bartender. Doctors prescribed Hoyt a regimen of painkillers, but he didn’t like the side effects: drowsiness and itchy skin. His neighbor, an older woman who smoked pot to treat her chronic migraines, suggested he try out Kushmart, a marijuana dispensary on Hollywood Boulevard. “I tried some indica, which she said was good for pain, and it worked,” he recalls. “I still feel pain in my forearm and bicep, but now I can relieve the pain when I need to.”
 
At the time, both L.A. and San Francisco were being overrun with storefront dispensaries, Hoyt figured, and most of them weren’t the kinds of places where he or his upscale, business executive-type friends really felt comfortable. Why not create a company that would deliver marijuana to customers in the privacy of their own home, customers who lived in communities that had either outlawed or driven away storefront locations? Ultimately, he settled on Berkeley because it offered convenient access to a host of East Bay cities that had no dispensaries: Walnut Creek, Pleasant Hill, Concord, Danville, Pleasanton, Dublin, Livermore, Oakley, Brentwood, and Martinez.
 
“Actually, Concord has one or two [dispensaries], but they are operating illegally,” Hoyt adds. “From what I hear, they’re paying a $1,000 fine a day, and you have to walk in [through] a back alley.”
 
“That one is shady,” Glew agrees. “They are going to be shut down.”
 
On our drive into town just minutes earlier, we’d passed by rows of large warehouses on either side of the freeway. According to Lucky, several of them were recently set up to house illegal dispensaries. “Right now is time for ‘turn and burns,’” 
 
Lucky explains. “Everybody that’s growing is just coming down the mountain, renting a place for two months, and they’re going to blast off ads for twenty-five dollars an eighth, and instead of selling them to a collective, they’re going to retail their pounds.”
 
In other words, instead of selling their weed for $1,000 to $3,000 per pound to a dispensary, these outfits will come up with online and even print advertisements in local alternative newspapers, advertising themselves as legitimate cannabis collectives and dealing directly to consumers, one ounce or eighth-ounce at a time. Doing so drives their per-pound rate up to $5,000 or so, and since you can rent a warehouse for $5,000  to $10,000 per month, Lucky figures, it only takes a few pounds to pay off a landlord and by, say, a month later, when the cops finally figure out what you’re up to, you’ve already sold your crop and are now a few hundred thousand dollars richer.
 
“There are collectives and then there are ‘collectives,’” Glew interjects. “There are the ones that are actually saying, ‘Let’s go get a lawyer, try to be a mainstay in the community, try to be legit. And then there are the guys like Lucky just described.” A year or so ago, before court rulings tightened the rules, he adds, anybody could start their own collective by simply designating themselves as “compassionate caregivers” for their dozens or hundreds or thousands of customers. All they needed was a so-called “caregiver certificate” signed by both parties.
 
“So now you’ve got one guy with a club and ten thousand customers, and the courts didn’t like that,” says Glew. “They started coming up with all these rules: a caregiver has to be in the same county, then they limited it more: it has to be a relative or friend, not just someone you’re selling weed to; you gotta be mowing their lawn or picking them up from doctor’s appointments.” When the courts finally ruled that caregivers have to prove they have preexisting familial relationships with the marijuanapatient, the medical-marijuana industry simply dropped the pretense and sought legal protection for collectives under a California supreme court ruling, the so-called Mensch decision, that allowed patients to collectively and cooperatively grow and distribute marijuana.
 
Thanks to that ruling, any California resident with a doctor’s note can legally obtain a “reasonable” amount of marijuana—what’s reasonable is determined by their physician—from their nearest marijuana dispensary, rather than having to grow it on their own or obtain it from a mythical family caregiver. But what about people who live in cities without dispensaries? “There was definitely a need out there,” Hoyt continues.
 
“All these patients were driving all the way out here, through the tunnel to Oakland, to Harborside. A lot of our clients are people who don’t want to go to a collective, or have some stoner in an AC/DC shirt smelling like smoke come up to their house.”
 
Instead, Green Spot delivery drivers wear the informally preppy attire you’d associate with an express, door-to-door delivery service—a dark polo shirt, khaki slacks or shorts, and a baseball cap. The marijuana is placed in an airtight plastic canister with the Green Spot logo and what Hoyt refers to as “Prop. 215 verbiage,” which explains that this is medical weed, not that other kind you buy on the streets. There’s also a clear window so patients can see the medicine once they pull the canister from the unmarked manila folder that the driver hands them.
 
***
 
According to Hoyt, the Green Spot’s success going forward won’t only rely on dependable customer service and quality of product. “We see the future of this industry in packaging,” he says. “For a long time, it’s been run like a farmers’ market. You go, you look at the product, weigh it out, and put it in a bag. Who’s going to remember that? It’s a guy with a hat at the farmers’ market and you like his carrots. But if he or she has a name and packaging, you’re going to remember it and order it again. It’s the consistency of product and medicine that a patient wants to have, and it’s the packaging they remember.”
 
Green Spot’s next venture, he adds, will be to grow and deliver clone plants to customers. Currently, they refer clients who want to grow their own weed to Harborside, which specializes in clones. The challenge, he explains, is figuring out how to discreetly deliver actual plants as opposed to small packages of marijuana. “Right now, I just want to focus on getting the right audience—get the right market of people that really want the delivery,” Hoyt says. “We carry only high-grade medicine—two outdoors and five indoors. We have a variation of hybrids of indicas and sativas. We state on our website the medical benefits of each one.”
 
Lucky can barely contain himself. “You know what would be really good PR for you?” he asks. “Send a group of patients out and say, ‘One of the things we do at Green Spot is take pride in the lifestyle of our patients. We went out to Mr. Jones and saw the lights he was using and he wasting all this energy, so we put these kind of lights in.’ Do the three or four simple things you can do to someone’s house to make it green, so now you’ve got magazines that want to do stories on you because you’re making a greener environment for your patients. That term ‘green’ is so fucking hot right now. The Green Spot can be a healthy spot to go paperless, LED lights, all that stuff—really capture those dollars that are coming in from those green efforts. There are a lot of people out there trying to inject dollars into that green movement. And all of a sudden the Green Spot is saying, ‘We went to our patient in Rossmoor or Willow Creek, and we changed their toilet and plumbing! We did this, we did that!’” 
 
“He’s not actually on meth,” Glew jokes, glancing around the table. “He’s on coffee.”
 
“It’s the mocha,” Hoyt says, laughing. “What’d you put in the mocha?”
 
Several minutes—and several of Lucky’s stream-of-consciousness-style revelations about the marijuana business—later, El Machino arrives, his presence announced by the roar of his approaching Harley Davidson 127" Road King. Hoyt’s silent partner in the Green Spot is a muscular, middle-aged man with a goatee and a wide grin, who in his other life owns a small mortgage company that despite California’s plummeting real estate market regularly pulls down six or seven figures in profits each year. With the Green Spot, El Machino’s not just a partner, he’s also a patient, so to speak. Before Hoyt approves any edible for delivery, like those provided by Berkeley based Yak Edibles, he first tests it on El Machino.
 
“Yak Edibles says you just need one dose, one capsule, to get high,” Hoyt says. “So I ask El Machino if he’s tried the capsule and he goes, ‘Oh yeah, I tried five—five at once. It felt great. It solved all my problems. Which ones? I don’t know.’ But we know that if five of these are working for El Machino, one of them will be just fine for one of our normal patients.”
 
“He’s kind of like chupacabra,” Lucky jokes. “Does he really exist? We don’t know. But he might eat anything!”
 
Besides Yak Edibles, the Green Spot has also partnered with a company called Medi-Cone, which according to Hoyt was founded by a friend of his who was a student at Richard Lee’s Oaksterdam University. Medi-Cone makes extra-large, cone-sized joints that contain a mixture of medium-grade marijuana buds and kief. Each joint is made from paper formed in Amsterdam and then sent back to California, where it is filled with marijuana and packaged in a plastic tube with a top that easily pops off and on, allowing you to keep the roach from stinking up your car or house when you’re done smoking it.
 
The cones are one of the Green Spot’s most popular delivery orders. “Basicallywe’ve co-branded with an established entity and we have great feedback already,” El Machino says. “And we did the same thing with Yak. That’s just a business-model kind of thing: find somebody who’s established and try to partner with them. Medi-Cone has some of the best joints out there for sure.”
 
Clearly El Machino is a fan. Do we have any Medi-Cones here?” he asks.
 
“Actually no, I blew it,” Hoyt admits, before suddenly breaking into a grin.
 
“What are we talking about?” he says, laughing. “I run a delivery service: I can have it delivered out here in 10 minutes. Let’s place an order. We can have it delivered to your place.”
 
***
 
At El Machino’s house, a Suzuki-motorcycle-driving Green Spot delivery man drops off four grams of Lavender Kush, Purple Kush, Blue Dream Indoor, and Grape Ape, plus a couple of Medi-Cones and a few Yak Edibles, totaling exactly $302. 
 
Dressed in khaki slacks and a black polo shirt, the driver shows how his iPhone is set up with a PayNet app and a card reader that plugs into his earphone jack, thus allowing him to record the transaction in just a few seconds. “I just type in your account number, you swipe the card, the amount gets sent to you in an e-mail,” he says. “You sign, your signature is saved, and you get the delivery, and in the package there’s a lighter and a business card.”
 
“Pretty slick, huh?” El Machino says as the Suzuki speeds off. “This is what I am able to bring to the table: a corporate structure. I’m not a corporate-type guy, but it’s good to have the structure—and be cool—in this business. That’s what I’m all about: having a structurally applied model and [being] super fucking cool about it. We want to be around cool people, because we’re fun and we’re cool, we get it done and we have the best stuff and good service. We want clients like me: I have money, I know what I want, and I don’t want any hassles or bullshit.”
 
Lucky is busily sampling the freshly delivered weed. He unwraps a Medi-Cone and takes a few deep puffs before passing it around. When the large joint comes back his way, he marvels at the color of the ash on the tip. “This is a gorgeous fucking thing,” he declares. “When you see ash that’s real white, it’s ash that doesn’t have a lot of chemicals in the weed. It’s flushed out real clean. A lot of the time when you see black in the ash, it’s from the weed.” He takes another drag. “This is an Urkle,” he announces, referring to Purple Urkle, an indica strain popular among cannabis connoisseurs for its lavender color, mellow taste, and lazy, insomnia-combating body high.
 
“Yeah,” says El Machino. “What’s cool is this guy doesn’t use shake for these things—he actually uses the bottom buds. You can taste the quality.”
 
“This guy’s a pro,” Lucky concurs. “But you can tell this is old.”
 
Lucky examines the wrapping for the joint and points out that there’s no date anywhere that documents when the joint was prepared. “There’s no born-on date, dude,” he says. “All of these should have born-on dates. When was it rolled? You guys should do those, and if it’s been sitting on a shelf for more than two weeks, we’re done with it. We’re not going to deal some stale-ass weed. Who wants to smoke a joint that’s been sitting on a shelf for two fucking years?”
 
Lucky may be high as a bird right now, and talking faster than a jackrabbit jumps, but he knows the business, and El Machino is nodding his head enthusiastically, taking note. “That is what I like about the position that we’re in,” he says, puffing on the joint. 
 
“We can go back to them with that [criterion] and start doing that, and when we start printing our own labels we can do that, too. It’s all about branding, service, and quality control.”
 
Quality control? Did someone say quality control? There’s an app for that, says Lucky. “Have you seen the fucking growbots?” he asks, eyes wide with excitement. “You put one in your garden and it goes through and can recognize how far your plants are from each other and it sticks a sensor into the soil of each plant and reads the PPMs and PHs—”
 
“Shut the fuck up!” El Machino interrupts. He leans forward, blowing smoke and passing the joint around the table. 
 
“Absolutely,” Lucky says, not stopping. “Whatever the plant needs, it will get. And you can control it from your phone. So you can be in Costa Rica and check into your garden on your app, and see that this plant, the leaves are curling, or whatever.”
 
“That would have been great for the pods,” El Machino says, referring to the original business idea he and Hoyt had considered several months ago, before opting for a delivery service instead. The pod idea had to do with Proposition 19, which would have allowed California adults to each grow twenty-five square feet of cannabis.
 
“I have land where there are warehouses, and what I originally wanted to do was set up a pod thing, where each pod was twenty-five square feet,” he explains. 
 
“So inside this warehouse, you have all these pods people can rent to cultivate their medicine. We’d screen everybody—doctors, background checks, the works—and fill it to capacity.”
 
El Machino estimates that he and Hoyt would have been able to post $45,000to $50,000 per month in profit once it was up and running. “That’s just renting pods,” he says. For a variety of reasons, he and Hoyt opted to create Green Spot instead, and given that just a week earlier, voters rejected Prop. 19, they made the right business decision. But El Machino is quick to add that he’s not just in the marijuana business for the money. As the father of two young children, he says, it pains him to see how California’s public-sector infrastructure, especially the state’s school system, is collapsing under the weight of the implosion of the real-estate market and the ongoing global economic recession. Marijuana can solve all the Golden State’s woes if just given a proper chance.
 
“Legalize it, tax it, and get the schools back open—the student programs, the band, the athletics—get all that back,” he says. “I see teachers getting red slips, losing their jobs, getting their hours cut, having to go out on their own to buy pencils and paper. Let’s seriously get our priorities straight here.”
 
Excerpted with permission from The Weed Runners: Travels with the Outlaw Capitalists of America's Medical Marijuana Trade  by Nicholas Schou, published by Chicago Review Press, September 1, 2013.

Nicholas Schou is the author of The Weed Runners: Travels With The Outlaw Capitalists of America's Medical Marijuana Trade, Chicago Review Press, 2013.