D.C.'s pot pioneers: Seeking a piece of the medical marijuana action

By Paul Schwartzman
Washington Post Staff Writer
Tuesday, March 8, 2011; A01

Montgomery Blair Sibley might be best known as the lawyer who defended the "D.C. madam," the infamous escort service owner who claimed to attend to the needs of Washington's elite.

Sibley has a new focus these days, one that's luring a rabbi, a waitress, a State Department technician and a gaggle of other fledgling entrepreneurs: growing marijuana and selling it to sick people in the nation's capital.

He and his partners have divined a logo ("Rx" over a pot plant) and a company name (the Medicinal Marijuana Company of America) and have found a New York Avenue warehouse at which they hope to grow enough pot to make a profit in the first year.

But the District is only part of Sibley's grand plan, which is to turn his growing operation into a national chain as ubiquitous as, say, McDonald's. "I want to be the Ray Kroc of medical marijuana," Sibley said, referring to the man behind the golden arches.

Every new industry is driven by risk-taking pioneers, and it's no different with medical marijuana in the District, where those seeking a piece of the cannabis action include an electrician from Baltimore, an unemployed administrator who lives in Southeast Washington and the owners of a hemp clothing store in Adams Morgan.

As the Gray administration finalizes regulations, some of those entrepreneurs are crafting business plans, lining up financing, and anticipating fierce competition to obtain licenses to operate five dispensaries and 10 cultivation centers. Whether motivated by the prospect of profit or a belief in marijuana as a therapeutic salve - or a mixture of both - everyone is cagey about their plans, because no one is certain who is in the hunt.

"People are hiding in the shadows," said Alan Amsterdam, a co-owner of the hemp store who is part of a team hoping to open a dispensary and cultivation center. "Then they'll strike like a cobra."

Steph Sherer, executive director of Americans for Safe Access, a nonprofit group that advocates for medical marijuana, said her office had received "hundreds of calls" from people interested in opening businesses in the District. But she said the pool is sure to dwindle as they learn that banks are reluctant to lend money to such start-ups and that medical marijuana remains illegal under federal law, even though the Justice Department has said it's uninterested in prosecuting dispensaries.

"What ends up weeding a lot of people out is the realization that they're committing an act of federal civil disobedience by getting involved," she said. "They have to make a decision about whether they're willing to take the risk."

Cupcake cannabis

The costs can be daunting, too. A license in the District will cost $10,000. Then there's the money needed for a lease, security, staff, lighting and irrigation systems, and, of course, the marijuana to grow or sell.

"There are a lot of people who think they're going to make a lot of money," Sherer said. "They borrow money from everyone they know. They borrow from their kids' education funds, and then they find out it's not that profitable."

Still, they can dream.

Todd Mizis, 34, an audio-visual specialist for the State Department, has visions of owning a bakery that makes cookies, brownies and cupcakes laced with cannabis, all of which he would sell to dispensaries. Mizis even came up with a name for his venture: Baked DC.

Amber McKay, 25, a mother of three who makes $150 a week as a waitress at Pane E Vino, an Italian restaurant at the Lorton Town Center, said she recognized a new frontier when the District legalized medical marijuana last year. "I saw an opportunity for making money," she said.

The people whom she consulted included her father, a contractor, who asked, "Are you serious?" Her stepmother blanched. Her pastor said, "Oh, really."

John Wilson, a District real estate broker also on her consultation list, said he had fielded calls from at least half a dozen groups searching for space to sell or grow pot. He recommended that McKay speak with someone else who had called him, Sibley, with whom she has formed a partnership.

Sibley, 54, is a descendant of a long line of American titans, including a great-great-grandfather who was the namesake for Blair House, across from the White House. Another great-great-grandfather founded Western Union. A lawyer for 30 years, Sibley was suspended by the Florida bar in 2008 for failing to pay $100,000 in child support, leaving him with time to pour into his new business.

His to-do list includes finding a qualified grower - he's running an ad on Craigslist under the heading "Become a Medical Marijuana Cultivator."

"This one is wide open," Sibley said of his new field. "There is no one controlling the market. The barriers for entry are very low."

At least one seasoned purveyor is no longer interested in doing business in the District: Stephen DeAngelo, a Washington native who operates a California dispensary that is one of the largest in the world, said he was turned off by a D.C. Council member's characterization of him as a profiteer.

"I'm the farthest thing from a profiteer," he said. "I have no desire to go where I'm not welcome."

Marijuana gold rush

As an industry, medical marijuana has exploded since the mid-1990s, with 15 states and the District approving legislation. In 2002, there were 11 dispensaries in the United States, according to Americans for Safe Access. Now there are about 2,000. Lawyers, lobbyists and others have found work pushing legislation and helping start-ups craft proposals and navigate the licensing process.

"I've fielded a dozen or so calls, serious calls, from people saying: 'We're ready. We'd like to enter this. We have investors. What do you know?' " said Michael Rothman, a Rockville defense lawyer who recently added a wing to his practice that he calls the Medical Cannabis Law Group.

For now, Rothman said, he's happy to provide information for free, in part because he supports medical marijuana. But he later plans to charge for his services.

Although D.C. voters supported medical marijuana in a referendum in 1998, Congress blocked the city from implementing the law until last year. After Mayor Vincent C. Gray (D) took office, officials began reviewing final regulations, and they will solicit proposals and award licenses. The unanswered questions include a key detail: Where will cultivators get their seeds to grow marijuana?

D.C. Council member David A. Catania (I-At Large), chairman of the health committee, expects the program to open next year and said the city should proceed methodically. "It's most important that it be done right than quickly," he said.

The District's regulations are more restrictive than other locales', narrowly defining who can obtain medical marijuana and capping at 95 the number of plants a cultivator can have in one place.

"You're going to be limited in what you can produce and what you can sell," said Adam Eidinger of the D.C. Patients Cooperative, which plans to apply for licenses to cultivate and dispense. "The idea that there will be an owner in the background collecting million-dollar checks is mistaken."

A rabbi's new calling

Not a problem, said Jeffrey A. Kahn, a rabbi who, with his wife, hopes to open a dispensary in Tacoma Park. Kahn's emergence as a potential dispenser inspired the headline "From Bima to Pot Seller" in a weekly newspaper that caters to a Jewish audience.

Kahn, no longer the leader of a congregation, said he saw the relief marijuana gave his father-in-law, who suffered from multiple sclerosis. "We're not entrepreneurs," he said. "We've been in the same profession for 20 to 30 years, and this is our midlife crisis, and we're looking for something else. This would provide us with the chance to make a living and help people."

Clayton Williams, 45, an electrician from Baltimore, also sees purpose in growing marijuana for the sick, something he said he has done unofficially in his city. He was ready to apply for a District license - "Congressional Cannabis" was a name he came up with - until he learned at a recent meeting that the city won't accept applications from convicted drug felons. A couple of years ago, he said, Baltimore police arrested him after finding 104 pot plants in his basement.

Still, Williams said he has not lost hope. The District may be off limits, but his home state and others are considering proposals to legalize medical marijuana. If they're more inviting, he said, he's ready to grow.

© 2011 The Washington Post Company