The Debate On California's Pot Shops

This segment was originally broadcast on Sept. 23, 2007. It was updated on Dec. 30, 2007.

Eleven years ago, California became the first of a dozen states in the nation to legalize medical marijuana. True believers, including many doctors, say pot works to ease pain or counter the side effects of chemotherapy. And the National Academy of Sciences agrees, if the drug is carefully used. Critics see medical use as the gateway to legalizing all marijuana.

Well, how is the California state law working? As correspondent Morley Safer reports, the answer involves another statute: the law of unintended consequences.

For one thing, the federal government still views marijuana, medical or otherwise, as illegal and has been cracking down on dispensaries that sell it. For another, it's clear there are legions of people buying medical marijuana for the sole purpose of getting high. For both them and the truly ill in California, it's become an easy matter: just drop by your little pot shop around the corner.

In many dispensaries up and down the state, there's a tasting corner, where you can sample the wares, and where you'll find any number of satisfied customers.

"I use medical marijuana for anxiety, neck pain and back pain. It seems to be the only thing that works that's not an opiate derivative," one man tells Safer.

Another man says he smokes marijuana because he has a torn ligament in his knee. "I use a pipe, a little bit of a time when needed," he explains.

There are hundreds of such stores in the state, and as many as 400 in southern California alone. The people who run them are members of the state's latest entrepreneurial class, calling themselves "caregivers." The feds call them something else. Case in point is a young man of many faces named Luke Scarmazzo.

He has been described as a businessman, a hip hop artist, and, by the government, as a drug dealer. Asked which of the descriptions apply to him, Scarmazzo says, "I'm a hip hop artist first. 'Cause that's what I've always been. And I'm a businessman second. But I'm not a drug dealer."

But he does acknowledge that he is in the drug business.

And like a growing number of people in the business of selling medical marijuana, Scarmazzo found himself and his dispensary on the receiving end of an unannounced, early morning raid by the federal Drug Enforcement Administration.

"They handcuffed me and put me on my kitchen table. And one of 'em walked up to me and held his badge up and said, 'You knew I'd be coming soon,'" Scarmazzo tells Safer.

But Scarmazzo says he didn't have a hint that the feds were on his case.

The DEA hits a handful of businesses like Scarmazzo's every few weeks. And in his case, business was good: in the town of Modesto, population 200,000, he sold $4.5 million worth of medical marijuana in two years.

And he was paid a good salary, too. "I took home $13,000 a month," he says. "I was working a lot of hours."

Scarmazzo's lawyer, Tony Capozzi, says the business was above-board, by the book, and perfectly legal in California.

"We think this is selective prosecution," Capozzi says.

Selected, Capozzi says because of a high profile video Scarmazzo had made. In some scenes, he's a well-tailored businessman, a caregiver. But in other shots, he's a different man, flaunting money, pot, babes, and attitude, in a manner more in tune with drug dealing than care-giving.

"Do you not think that it's easy to see that video as him…being a smart ass…and saying, you know, 'Come and catch me if you can'?" Safer asks.

"In hindsight, yes," Capozzi agrees.

Hindsight. One more image in the hall of mirrors that medical marijuana in California has become. The Supreme Court has upheld the DEA's right to go after dispensaries, no matter what state law might say. And even one of the key proponents of medical marijuana says things have gotten out of hand.

"It's just ridiculous the amount of money that's going through these cannabis clubs. It's absolutely ridiculous," says Scott Imler, a minister in the United Methodist Church who has long been active in promoting medical marijuana.

Eleven years ago, he was working to pass proposition 215, the ballot measure that legalized it. Today, Imler has second thoughts.

"The purpose of proposition 215 was not to create a new industry. It was to protect legitimate patients from criminal prosecution," Imler says.

The aim back then, reflected in television spots, was for a highly regulated system in which licensed pharmacies would dispense medical marijuana to the seriously ill. Proposition 215's backers had people with AIDS, cancer, and glaucoma in mind.

"What happened when we were writing it was, as you can imagine, every patient group in the state and they all have their lobbies. You know, the kidney patients and the heart patient. Every patient group wanted to be included in the list," Imler recalls. "And so we didn't wanna get in the position of deciding what it could be used for and what it couldn't be used for. We weren't doctors. We weren't scientists. We weren't researchers. We were just patients with a problem."

Imler says they were forced to make the proposition vague.

So the law voters passed mentioned not only cancer and AIDS but "...any other illness for which marijuana provides relief." A decade later, if you've got a note from a doctor, you can buy medical pot for just about any imaginable condition.

"Let me just ask you plain and simple. Is there this proliferation because people are simply using, quote, unquote, medical marijuana, to get high?" Safer asks.

"I think there's a lot of that. And I think you know, a lot of what we have now is basically pot dealers in storefronts," Imler says.

Many businesses calling themselves dispensaries or cannabis clubs advertise in alternative papers, as do doctors around the state who will give you a quick once-over and, for a price, a permit to buy.

Television station KCBS went to a Los Angeles clinic, where the waiting room was full of young people, joking about what they'd tell the doctor their ailment was.

The doctor, James Eisenberg, saw four healthy people sent by KCBS. He rejected a 17-year-old for being underage. But after getting a brief consultation and paying $175, the other three got their papers. One complained of dry skin, another of hair loss, and the third said high heels hurt her feet.

"Do you think someone who complains of foot pain because of high heeled shoes is a legitimate candidate for medical marijuana?" TV reporter David Goldstein asked Dr. Eisenberg.

"You know, all I can do is take my patients' statements as factual," the doctor replied.

And in doing so, he is not breaking any state laws.

Don Duncan is something of an elder statesman in the world of medical marijuana, running three California dispensaries, including one in Hollywood. He concedes that compliant doctors are a problem.

"You're not naive about this, I'm sure but obviously someone claiming to have a mild back pain, and has a friendly doctor," Safer remarks. "Virtually anyone, theoretically, can come in here and buy it legally."

"Absolutely," Duncan agrees.

"And I'm sure that happens, correct?" Safer asks.

"There's bound to be abuse in the system. You know, our pharmacies are abused by people who want to abuse prescription drugs. And so it's reasonable to assume that our medical cannabis facilities are abused as well. What we really need right now are regulations that address those issues," Duncan says.

Cities around the state have been tightening the rules.

A city council hearing on limiting the number of dispensaries in West Hollywood was typical: activists and dispensary owners were out in force, as well as people who said they rely on medical marijuana for relief from serious ailments.

An AIDS patient said, "Medical marijuana equals life. My life." A man with vascular deterioration argued, "I have a deformity here, and a great deal of pain and discomfort. They help me with that."

There's a growing number of local laws limiting the number of dispensaries in a given area and the hours they can operate. But American ingenuity will always find a way.

Kevin Reed was forced to shut down his San Francisco dispensary because of complaints from neighbors. So he simply went into the delivery business.

Reed is up every morning, turning out a new batch of cookies laced with pot, part of a delivery menu that includes marijuana strains for every taste: "Snow White," "Super Girl," "Afghan Dreams," and "New York Diesel."

"If you smoke something like this, it's gonna lay you on the couch. And you really won't be able to work for the rest of the day," Reed says.

Like many in the business, Reed is both caregiver and patient. Smoking marijuana, he says, for pain relief. "If I don't smoke marijuana, then the arthritis in my back starts to inflame. You know, it starts out mildly but gets worse and worse," he explains.

His couriers fan out across the city, delivering their wares.

In theory, all the medical marijuana sold in California is grown by the patients themselves.

"We're a collective. And what that means is our members grow it, they bring excess medicine here and we provide it back to the other members. That way we have no entanglement with the illicit market," Don Duncan explains.

But skeptics say it doesn't always work that way, and that old fashioned pot dealers can easily get a compliant doctor to make them patients and caregivers too.

"Most of these cannabis centers are buying their marijuana off the black market. They're dumping millions of dollars into the criminal black market," Imler says.

"Marijuana - what? Coming in from Mexico or wherever?" Safer asks.

"Some of it is," Imler says. "Some of these places sell hashish, which comes in from the Becca Valley in Lebanon."

"What you're suggesting is that the traditional black market or part of the traditional black market is now legal?" Safer asks.

"Yeah. That's essentially what's happened," Imler agrees.

Imler believes there are well-meaning dispensary owners doing their best to help the seriously ill. That, says Don Duncan, is his goal.

"We just wanna serve our patients and be discreet. Obviously federal law is still a challenge for us. Because until federal law changes, we're at risk from the DEA raiding our facility, confiscating our medicine, even arresting people," Duncan says.

Duncan acknowledges they, the Feds, know where he is and that they could on a whim bust him.

They could, and they did. Not long after Safer's interview, the DEA raided one of Duncan's dispensaries, arresting no one but confiscating the marijuana. Don Duncan got there in time to watch with pro-pot protesters outside.

"They smashed the doors and they ransacked the building and took all the medicine from the patients and left the place in shambles," Duncan says.

As for Luke Scarmazzo, rapper and businessman, he goes on trial soon on drug conspiracy charges in a closely watched case. In his video, he wins over skeptical authorities with his music and his charm. But real life in federal court could turn out differently.

Asked if he's worried, Scarmazzo tells Safer, "Worried would be an understatement. I mean, I'm facing a minimum of 20 years and a maximum of life in prison."

And looking back on a decade of controversy, Rev. Scott Imler concedes that good Samaritans with good intentions weren't enough. He argues it's time for the federal government to step in and legalize and properly control medical marijuana.

"Until that happens, we're gonna have what we have now, which is chaos," he says.

Produced By David Browning