Drug Legalization

This California Town Has Really Gone to Pot


At the California Collective Care medical marijuana dispensary in the Northern California town of Vallejo, patients who stop in to buy cannabis can stock up on an assortment of household items such as pot-infused olive oil, butter, and barbecue sauce. The shop sells several hundred “edibles” each week, including brownies, cupcakes, and biscotti with weed baked right in. (Bet you can’t eat just one.) “There are a lot of people who come here that do not take cannabis through a cigarette or pipe,” says Mike Tomada, one of the founders. “They would rather eat it or drink it.”

Tomada’s dispensary, which opened about two years ago and draws from 60 to 100 people every day, is one of 15 marijuana businesses in Vallejo, according to WeedMaps.com, a website that tracks them. The city estimates there are more, at least 20. The pot business is about the only part of Vallejo’s economy that is thriving. The city of 116,000, 24 miles north of San Francisco, went bankrupt in May 2008. Businesses closed. Property values plummeted. Looking for ways to save money, Vallejo reduced its police force by 33 percent, from 134 to 90. The town doesn’t have local laws regulating the medical marijuana trade, and doesn’t have the money to challenge the dispensaries in court.

The pot entrepreneurs came running. Some dispensaries have registered as health stores with vague names, making it difficult for the city to identify them. “Do we have the capacity to go after every single one right now when there are 20 of them and with our limited staff?” says Marti Brown, a Vallejo City Council member. “Probably not.”

California was the first state to legalize marijuana for medical use in 1996, with the goal of offering pain relief to those suffering from cancer, AIDS, and other debilitating illnesses. A ballot measure to legalize the drug for recreational use in California failed last year. While the state taxes the dispensaries, the rules are murkier at the municipal level, where some cities, including San Jose, tax the businesses; others have banned them, and some, like Vallejo, haven’t set any rules. “In this city, they’ve proliferated because they don’t have the money to enforce them,” says Matt Shotwell, a Vallejo resident and former U.S. Merchant Marine who opened his own dispensary, Greenwell Cooperative, in January 2010. (Big sellers at his shop: Fruity Canna-Bites cereal, sugar-free Brownie Clouds, Oatmeal Munchie cookies.)

Shotwell says that without the town’s stamp of approval, dispensaries operate in a gray area. It is tough for dispensary owners to get approved for a business bank account and buy health insurance for employees. Shotwell appeared before the city council to urge the town to tax and oversee the businesses to legitimize them. The city, which emerged from bankruptcy on Aug. 5 and is slowly rebuilding the police force, agreed to put a ballot measure before voters in November to impose a business-license tax on the dispensaries of as much as 10 percent of gross sales. “All the marijuana clubs in Vallejo want to be legal,” Tomada says. “We help the public every day of the week here. We just want to be recognized as part of the community.”

The bottom line: As many as 20 medical marijuana sellers opened up shop in Vallejo, which may soon tax the thriving trade to help revive the town.

Vekshin is a reporter for Bloomberg News.

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