cannabisnews.com: Inside Dope 





Inside Dope 
Posted by CN Staff on October 24, 2003 at 22:33:35 PT
By Quentin Hardy 
Source: Forbes Magazine 
In the quiet countryside just outside Vancouver, B.C. an ambitious young entrepreneur surveys a blindingly bright room filled with lovely plants--dozens of stalks of high-power marijuana. Almost ready for harvest, they hold threadlike, resin-frosted pot flowers, rust-and-white "buds" thickening in a base of green-and-purple leaves. The room reeks of citrus and menthol, a drug-rich musk lingering on fingertips and clothes. 
"There's no way I won't make a million dollars," says the entrepreneur, David (one-name sources throughout this story are pseudonymous). He runs several other sites like this one, reaping upwards of $80,000 in a ten-week cycle. Says he: "Even if they bust me for one, I'm covered." So, it seems, is much of Canada--covered with thousands of small, high-tech marijuana "grows," as the indoor farms are known. Small-time marijuana growing is already a big business in Canada. It is likely to get bigger, despite all the efforts of the antidrug crowd in Washington, D.C. On Oct. 14 the U.S. Supreme Court, by refusing to disturb an appeals court ruling, gave its stamp of approval to doctors who want to recommend weed to ease their patients' pain or nausea. In the U.S. nine states have enacted laws permitting marijuana use by people with cancer, AIDS and other wasting diseases. The Canadians are even more cannabis-tolerant; although they have not legalized the drug, they are loath to stomp out the growers. This illicit industry has emerged as Canada's most valuable agricultural product--bigger than wheat, cattle or timber. Canadian dope, boosted by custom nutrients, high-intensity metal halide lights and 20 years of breeding, is five times as potent as what America smoked in the 1970s. With prices reaching $2,700 a pound wholesale, the trade takes in somewhere between $4 billion (in U.S. dollars) nationwide and $7 billion just in the province of British Columbia, depending on which side of the law you believe. In the U.S. the never-ending war on drugs endures, to modest discernible effect. In a largely symbolic act the U.S. Justice Department has just imprisoned an icon of the pot-happy 1970s--Tommy Chong of the old Cheech & Chong comedy team--for selling bongs on the Internet. But in Canada the trade in pot, or cannabis (as many Canadians call it), is an almost welcome offset at a time when British Columbia's economy is in the doldrums. Tourism here is down, and thousands of jobs got axed when the U.S. slapped tariffs on exports of softwood and then banned Canadian beef after an outbreak of mad cow disease. The marijuana business, by contrast, is thriving, not least because Canada shares a thinly guarded 5,000-mile border with the U.S., a big market. Ultimately much of the revenue flows into the coffers of hundreds of legitimate businesses selling supplies, electricity and everything else to the growers and smugglers. And who are these growers? Not a small coterie of drug lords who could be decimated with a few well-targeted prosecutions, but an army of ordinary folks. "I know at least a hundred [of them], 20 years old to 70," says Robert Smith, who isn't part of the trade but indirectly profits from it at the furniture store he owns in Grand Forks, B.C., 110 miles north of Spokane, Wash. "Of the money coming through my door, 15% to 20% comes from cannabis--we'd be on welfare without it." Mexico remains the biggest supplier of foreign pot for U.S. consumers, growing valleys of lower-grade grass and sending it north; some 500 tons of pot were seized at the Mexican border in 2001, more than 100 times the volume confiscated at the Canadian boundary. California is a prodigious supplier, as well. But Canada's industry is notable for its dispersion. The scattered and all but undetectable production may well herald a modus operandi for other regions. Small growers like David bring in $900 a pound at the low end, with net margins of 55% to 90%, depending on quality, depreciation and labor costs. They produce half a pound to 30 pounds every ten weeks, selling their product to local users or peddling it to "accumulators," who then smuggle it over the border or sell it up the chain to larger brokers. Accumulators and brokers typically add $80 a pound to the cost, as do the high-volume smugglers who buy from them. Smugglers returning money to Canada for other dealers skim a 2% laundering fee. "The first time somebody gives you a bag of money so heavy that you can't lift it, it's surreal. Pretty soon, it's just dirty paper," says Jeff, who recently retired from smuggling up to a ton of weed a week.  Building The Perfect Bud Want dope? Plant seeds. Want high-end dope? Pay attention.  LIGHTS: With 1,000-watt metal halide lights first blasting clones for 24 hours a day, followed by 12-hour intervals of dark to force budding, a half-year grow cycle is cut to ten weeks.  GENETICS: Breeding stock is critical to top-quality pot. Branches of the best female plants are cut and potted. The genetically identical offspring are also cloned.  AIR: Temperatures in the 70s. Added carbon dioxide boosts production, quality.  DIRT: Or hydroponics or aeroponics. Nitrogen for growth, phosphorous and potassium for resinous flowers. Beneficial fungi and bacteria to boost THC.  Sources: Ed Rosenthal; Advanced Nutrients. Sidebars: Breaking the Two-Pound Barrier Except for a few hundred medical users, who are permitted to grow for personal use, and some firms like Prairie Plant Systems, a Saskatoon, Sask. firm with a $4.3 million contract to grow for the Canadian government, cultivators of weed in Canada are operating outside the law. You wouldn't know it, though, from a trip to Advanced Nutrients' fertilizer factory. "We've got 86 different products, eight labs, 65 employees, and we'll gross $12 million (Canadian) this year, $20 million in 2004," says Michael Straumietis, who with partners Robert Higgins and Eugene Yordanov owns this firm. "I'd say 85% of this is related to the marijuana industry. We hope it's all for medical, but we can't control that." The Advanced factory, 50 miles outside of Vancouver, can produce up to 1.5 million liters of nutrients a month. Products like Dr. Hornby's Big Bud and Sensipro [as in "sinsemilla"] are distributed to some 380 stores in the U.S. and Canada, plus another 260 in Australia. By supplying medical patients with their products for free (and shipping Voodoo Juice to the University of Mississippi, where scientists grow marijuana for the U.S. government), they have generated testimonials and "studies" showing their products produce bigger, stronger pot plants than the competition. "Look at this--2.13 pounds per light!" says Yordanov, brandishing a paper. "We beat them in THC [tetrahydrocannabinol], too. A pound per light used to be good--we'll do 3." For the beginner, there is a $375 kit of seven nutrient boxes, one for each week of a quick grow. "Totally idiot-proof," says Straumietis, a 43-year-old American who fled to Canada from a since-dismissed marijuana charge. "We've revolutionized marketing and packaging." The trio began business in 1996 with a hydroponic shop, later moving into lighting and electrical supplies. In 2001 they were charged by Canadian authorities with conspiracy to export and conspiracy to traffic in cannabis, stemming from a 200-pound smuggling bust in Washington State. Last March the Canadian government halted prosecution, for reasons unknown, but could start again. The three deny the charges but also figure increasing liberalization of the law in Canada makes the nutrients more of a promising line, anyway. "There's more money in this than in growing," Straumietis says. "In five to seven years we could gross $100 million. If cannabis is legal[ized], we'll probably charge less, make it up on volume." That's Not Funny, Man The marijuana business was generally good to Thomas Chong, one-half of the Cheech & Chong comedy duo, until Feb. 24. On that day the comedian, best known for portraying stoned losers in movies like Nice Dreams and Up in Smoke, was nabbed in a nationwide sweep of merchants of pot pipes, bongs and other drug paraphernalia. Those products, along with small scales, tiny spoons and powder used in diluting cocaine, are prohibited by a little-enforced 1986 federal law. Chong, a naturalized Canadian, was one of 55 people charged as part of Pipe Dreams, a nine-month undercover investigation of paraphernalia vendors. On Sept. 11 Chong landed nine months in jail, one of only two Pipe Dreams jail terms handed out so far. "They mistook my character for me," says Chong. During his sentencing hearing, the prosecutors, seeking a hefty sentence, noted that he was in the process of making another Cheech & Chong movie. "I just reflect society, the same way Dean Martin reflected drinkers." Not so, says Mary Beth Buchanan, U.S. attorney for the Western District of Pennsylvania, who instigated Pipe Dreams. "We prosecute people for the deterrent effect," she says. "Thomas Chong was operating an illegal business, and he demonstrated a lack of respect for the law." Buchanan, who says there is "a multibillion-dollar" trade in drug paraphernalia on the Internet, offered her 92 peers around the country involvement in Pipe Dreams, but only five others took action. Chong plans to use his jail time to work on new material. "This is career-enhancing," he says. "Still, I wish my character was going to jail, instead of me."  Table:Cannabits THE ESTIMATED VALUE OF Canada's marijuana production-up to $7 billion-exceeds its farm receipts of both cattle ($5.63 billion) and wheat ($1.73 billion), or the $4.3 billion taken in by forestry and logging. Only oil and gas extraction, worth $15.8 billion, is worth more.  CANADA'S LEGAL farm operators have net margins of 5.5%. An economist in Vancouver's Simon Fraser University figures pot growers have a 72% annual rate of return, after discounting for costs, labor, thefts and arrests.  MARIJUANA HAS BEEN CULTIVATED FOR ITS fiber since at least 8000 B.C. and used as a drug since about 2000 B.C. In Europe it was cultivated for rope, paper and cloth for centuries, with no broad understanding of the plant's psychoactive properties until the 19th century, after Napoleon Bonaparte invaded Egypt.  "CANVAS" IS DERIVED FROM the word "cannabis." Many of the great paintings are on marijuana fibers.  HENRY VIII, AND many New World governors, mandated the growing of hemp (marijuana) for rope. Many farmers resisted because the crop paid poorly and smelled bad as it was curing.  THC IS CONCEN-trated in marijuana's trichomes, which are tiny stalked glands with a stem and a ball-like tip, clustered around the flowers of an unfertilized female plant.  ACCORDING TO A 1999 study by the Institute of Medicine, marijuana addicts 9% of its users. Alcohol addicts 15% of users, heroin, 23% of users, and tobacco, 32% of users.  ONE MARIJUANA cigarette deposits four to five times more tar in the lungs than a tobacco cigarette. Thus, smoking three or four joints is like smoking up to a pack of cigarettes.  MARIJUANA WAS EFFECTIVELY OUTLAWED in the U.S. with the passage of the 1937 Marijuana Tax Act. There are now an estimated 500,000 marijuana arrests in the U.S. each year.  THE MOST RIGOROUS SCIENTIFIC EVIDENCE of medical benefits from marijuana use centers on ameliorating the negative effects of cancer chemotherapy, appetite loss associated with AIDS, and to a lesser extent, pain management, multiple sclerosis and glaucoma. As a medicine it is considered limited by the side effect of intoxication.  POT SEEDS ARE nutritious and are often used in bird food. Sources: Statistics Canada, Professor Stephen Easton; "The Science of Marijuana " by Leslie L. Iverson, Oxford University Press, 2000; "The Big Book of Buds " by Ed Rosenthal, Quick American Archives, 2001. Source: Forbes Magazine (US)Author: Quentin Hardy Published: November 10, 2003Copyright: 2003 Forbes Inc.Contact: readers forbes.comWebsite: http://www.forbes.com/forbes/current/Related Articles:America's Drug War Farce http://cannabisnews.com/news/thread17664.shtmlMarc Emery Puts Pot Industry on Business Map http://cannabisnews.com/news/thread17638.shtmlU.S. Appeal Of Marijuana Case Rejected http://cannabisnews.com/news/thread17568.shtml 
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Comment #1 posted by FoM on November 03, 2003 at 15:19:29 PT
Heads Up: Tomorrow on C-Span at 7 AM ET
Quinten Hardy of Forbes on Canada's Marijuana Industry Quinten Hardy, who wrote the piece in the current Forbes Magazine on the Canadian Marijuana Industry, is a scheduled guest on C-SPAN's Washington Journal tomorrow morning at 7 AM (EST).Thomas J. Hillgardner, Esq
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