MarijuanAmerica: Inside America's Last Growth Industry

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This fall, California activists will be taking the fight to the next level, having gathered 700,000 signatures for a November ballot initiative that would fully legalize pot. Tom Ammiano, a state assemblyman from San Francisco who got his start in politics working as a gay-rights activist — he portrays himself in the 2008 Gus Van Sant film Milk — has also reintroduced his own legalization bill in the state legislature. "The temperature has changed a lot in Sacramento over the past year," Ammiano says. "If we had a vote in the hallway, it would pass right away. You hear all these Republicans saying, 'Yeah! Tax that shit! I smoke it!' Well, why don't you smoke some right now and vote for the bill?"

Ammiano chuckles, then continues, "Obviously, the issue has become seductive in a way that perhaps it had not been before. People see their schools closing, they see furlough days and reduced health care, and then they see this $14 billion industry that's untaxed and unregulated. So now, with dear old capitalism involved, everything is coming together in a perfect storm. In the Seventies, we had a term called 'harmonic convergence.' I mentioned this to someone in their 20s, and they said, 'Dude, what is that?' It means all the stars are aligned. It's starting to feel inevitable."

The complicating factor is a legal landscape that has become increasingly surreal. Pot remains illegal on a federal level, yet in certain states, it's legal to consume with a prescription while remaining illegal to grow. In California, this means growers and dispensary owners, who are not supposed to be earning profits or even selling marijuana, continue to operate in a legal gray zone. Meanwhile, legitimate patients can possess marijuana, but they often have no legal way to obtain it.

Beau Kilmer, the co-director of RAND's Drug Policy Research Center, cautions that even if pot is fully legalized in California this year, "it's really hard to project what might happen." The ballot initiative would essentially give local governments the kind of autonomy extended to wet/dry counties. "You could see some counties set up Amsterdam-type coffee shops," Kilmer explains, "and you could see others setting specific policies regarding regulation and taxation." Other questions also naturally arise. If California legalizes pot and it works financially as well as promised, will other states rush to snatch their own piece of the sin tax, in the same way that some form of casino gambling has appeared in much of the country? How much would the price of pot fall as a legal commodity? How much should it be taxed? If the tax is too high, would the marijuana black market continue to flourish? Why would that black market — particularly the more organized gangs and biker clubs that have traditionally earned steady profits from the pot trade — give up this cash crop so easily to some yuppie dispensary owner? Forget the Hells Angels and the Mafia: Will Philip Morris or Pfizer swoop in and simply take the whole game over?

And what will happen to growers like Tobias? At this point, he thinks he'd be able to adapt to the new laws, but the increased competition could also hurt his bottom line. One of Tobias' friends, another longtime grower, tells me angrily, "We're the people who were out here taking all the risks, and now we're going to be squeezed out!"

Still, the financial success of growers in the Emerald Triangle, however niche, is a prototypically American one, a classic story of can-do frontier spirit that embodies entrepreneurship in the purest, market-capitalist sense of the term. And at a time of deep economic uncertainty, this sort of success might be something to pay attention to. Whereas cheap, mass-produced weed from Mexico and South America once dominated the U.S. market, about half of the marijuana sold is now high-quality domestic product. Partly, this has to do with the tightening of the border after 9/11, making it more and more difficult to smuggle large quantities of pot. But, as The Washington Post pointed out last year, the homegrown bud often comes from "small-scale operators who painstakingly tend greenhouses and indoor gardens to produce the more potent, and expensive, product that consumers now demand." (THC levels of Mexican weed, while improving, hover around seven percent, whereas high-end weed in Northern California can reach THC levels of 20 percent.)

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