Cannabis capitalists speak with conviction

By Derek Kravitz
Washington Post Staff Writer
Saturday, August 28, 2010

The District is writing strict new rules to regulate its nascent medical marijuana industry, but some of the entrepreneurs best positioned to lead the way have blemished backgrounds - including drug convictions at odds with the city's vision.

Among the District's 300 proposed rules is a requirement that operators would need to be "of good character": No felony convictions or misdemeanor drug convictions allowed.

"Historically, the people who have dealt with marijuana have, unsurprisingly, come from a noncompliant background, you might say," said Allen St. Pierre, executive director of the Washington-based National Organization for the Reform of Marijuana Laws. "They have a compulsion to not follow the law. So these rules might be viewed as just another bump in the road or a minor impediment for these guys."

Businessmen such as Stephen DeAngelo, a ponytailed Washington native who runs one of the largest legal pot dispensaries in the world, say they just want to use their expertise "to help any way we can." DeAngelo has a drug conviction in Virginia from the 1970s and was arrested on drug charges in Montgomery County in 2001. He has launched a consulting service, CannBe, to advise pot capitalists, such as those hoping to stake their claim to the District's highly anticipated green rush next year.

Officials are wary of DeAngelo's closely guarded plans - he unexpectedly partnered with a team of Rhode Island investors that is planning to sell medical cannabis out of a 75,000-square-foot warehouse in downtown Providence, stoking concerns that he is expanding his empire nationwide.

"We started this with the intention of selling medical cannabis in a safe, seemly and responsible way," said DeAngelo, whose Harborside Health Center along the Oakland, Calif., waterfront employs 80 people and pulls in more than $20 million in revenue per year. "We didn't want to set up a chain-store arrangement . . . but we do want to replicate the model for others."

DeAngelo, 52, said the 2001 arrest was a "case of mistaken identity," and his Maryland attorney, Bruce L. Marcus, said charges were never filed because it "lingered for eight years and prosecutors forgot it was still out there."

Many of the potential applicants CannBe might advise - from dispensary owners and "bud-tenders" (those who handle and package marijuana) to growers, lab technicians, lawyers and "pot docs" (medical marijuana-friendly doctors who can prescribe) - also fail to meet the standards envisioned by the D.C. Council or have other ideas for the city's medical marijuana industry than those outlined in the pages of draft regulations released by the District two weeks ago.

One thing is certain: The District is uninterested in controversy.

"People are scared D.C. could be Amsterdam on the Potomac and, if Congress changes leadership, they're going to come barreling down on us," said Wayne Turner, a longtime AIDS activist in the District who was instrumental in drafting the 1998 referendum on medicinal marijuana. "We're going to be under so much scrutiny that any slip-up is going to be noticed."

A local advantage?

City health and regulatory officials tasked with crafting and overseeing the District's strict new medical marijuana law are carefully reviewing about 300 proposed rules, listening to stakeholders and hoping to avoid some of the mistakes made by the 14 other states that have enacted medical marijuana statutes over the past decade.

In Maine, officials realized only after they approved licenses for eight state dispensaries that half were connected to a very profitable medical marijuana group in Berkeley, Calif., when local businesses were preferred. In Colorado, more than 700 dispensaries have been licensed, overwhelming regulatory and law enforcement agencies.

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