Inside Dope
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 (see box, p. 154). 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.
Jeff started out a few
years ago by growing just 8 pounds of pot with his friends. Within a year they
were brokering hundreds of pounds from other small growers to someone with
connections to large U.S. distributors. When that person's buyer retired, Jeff
paid him $250,000 for the buyer's client list. "Sounds astronomical," he says,
"but at the time it looked free."
Once in the
U.S. the bud usually stays
on the West Coast. In Seattle a pound of top-quality pot sells for $4,000, and
by the time it hits Los Angeles it runs up to $6,000. High-grade cannabis then
sells at smaller weights, eventually burning up at $600 to $800 an ounce.
Back in British
Columbia the business of pot encompasses wholesaling different strains of seeds
for 95 cents to $1.90 apiece, the prices depending, among other things, on how
well a strain's buds rank at annual (and very public) "breeders' cup"
competitions in Amsterdam and Vancouver. Plants can also be propagated from
cuttings, sold for $3 to $10 each, wholesale.
This is a
job-creating industry. Trimming the dried flowers to maximize look and taste of
the top product pays about $15 an hour for a skilled laborer; it takes ten hours
for an experienced trimmer to turn out a pound of buds. Consultants get $40 an
hour for helping junior growers.
Marijuana
underwrites other businesses, too.
Vancouver tour guides brag of quality "B.C. bud," and "smokeasies" near the
Canadian border cater to Canadian and U.S. customers. Local authorities wink at
the offense. The owners of these smokeshops resemble camp followers of a
particularly tough Grateful Dead tour. Customers include clean-cut men in golf
shirts, grannies and women cradling babies.
Advice magazines
offer tips on growing; lighting shops are spread across the country to serve
novice farmers; and fertilizer companies target their marketing to pot growers
(see box). In the wake of a federal crackdown on makers of marijuana pipes in
the
U.S., those businesses are
relocating north of the border.
In the Kootenay
mountains of B.C., Gary Bergvall sold lights from a 15-by-15-foot space in 1996.
Now he employs 28 people and runs a factory that ships, each week, lighting
systems as well as two tractor-trailers full of air filters. Could the activated
charcoal filters be useful for absorbing the telltale odor of certain plants?
Maybe. The lights? Bergvall is circumspect. They are used "for a special
purpose, whatever that may be," he says.
Marc Emery started
a mail-order marijuana-seed business in
Vancouver in 1994, moving 100,000 seeds a year at an average $3.75 each. Today
the tax-paying entrepreneur sells 350,000 seeds a year, even though he has more
than 20 Canadian competitors (plus rivals in Holland, Spain and the U.K.).
Selling seeds in Canada is illegal, but just about no one is busted for it.
Web sites from
Vancouver to Montreal sell
pot to medical patients in Canada; one site requires only a doctor's letter
testifying you have one of 192 afflictions (including writer's cramp and
hiccups). Barbara St. Jean, a financial planner, got a pot prescription to treat
pain associated with lupus. She and her husband, Brian Taylor, a former mayor of
Grand Forks who later ran for national office on the Canadian Marijuana Party
ticket, have taught college courses on how to grow cannabis indoors. St. Jean
once gave a speech to some 40 city planners from across B.C., extolling the
potential benefits of cannabis to their local economies.
All of this action
owes much to the
U.S. and an inflow of
draft-dodging pot smokers during the Vietnam War. The marijuana growers among
them introduced sinsemilla (Spanish for "without seeds"), the unpollinated
female plant, which is far more potent than its male counterpart. In the 1980s
refugees from a northern California war on pot also headed to B.C., just as
1,000-watt lights made possible year-round production of top-grade strains.
Locals learned to grow for their climate.
The market is now mature
enough for precise segmentation. Dealers grade buds like bonds, starting at BB,
worth just $800 a pound because of its chemical taste and black ash when burnt.
A-quality cannabis tends to be well-grown outdoor product, at $1,300 because of
its somewhat loose buds. AAA, the type David grows and Jeff smuggled, is
characterized by tight clusters of flowers, a pleasant smell of eucalyptus and
enough drug-rich resin to coat the sides of a plastic bag. Even on a carefully
grown plant only 50% of the buds are the right size and shape for AAA. The best
stuff has odd varietal names--Mango and Blueberry for the fruity-smelling
strains, and F---ing Incredible and Romulan (a nod to the warriors with dented
heads on Star Trek), a testimony to the euphoric, incapacitating effects.
Producing the seeds
of such strains is up to guys like Daniel, a third-year apprentice breeder along
western B.C.'s coast. He helps produce about 60 varieties, starting with a dark
green bud called "Mighty Mite," a plant for urban window boxes that grows to the
size and shape of a corn dog. At the other end are 14-foot-high monsters that
reflect their origins in the Brazilian jungle.
Daniel's newest
creation is a straight-stemmed plant that stands 8 feet high and has thick,
well-spaced clumps of flowers. "This is a good prairie strain," says the
Alberta native. "You could
harvest it with a combine or a sunflower cutter. I'd like to produce seeds in
50-pound bags." Like many people in the Canadian cannabis trade, he expects
marijuana cultivation will be fully legal before long.
For Daniel,
thieves, not the police, are the big worry. And with good reason: The Royal
Canadian Mounted Police, which opposes many of Canada's pro-pot steps, concedes
that in B.C. only one-fifth of marijuana busts result in incarceration and the
average sentence is only four months. "Maybe the police can take these plants,"
Daniel says, nodding to a packed greenhouse. "Maybe they'll even take me
downtown, maybe arrest me. Maybe. But we have clones and copies of every one of
our plants in three more locations."
With seeds or
clones an indoor grower can spend just $1,600 to set up a 9-square-foot indoor
plot capable of hosting 72 small plants that produce 31/2 pounds of
mixed-quality buds in seven weeks. A well-wired operation with 20 lights costs
$20,000 to set up. Most growers stop at 10 lights lest they attract attention
with a steep electricity bill.
A good rule of
thumb in figuring yield is 1 to 11/2 pounds of bud per light. By using cuttings
and closely regulating how much light the plants get, indoor gardeners crush a
normal five-month growing cycle into ten weeks. Like high-end winemakers, these
producers obsess about methods, singing the virtues of organic gardening,
hydroponics (soil-less agriculture), even aeroponics (with nutrient misted on
the plants). Some pot farmers pump carbon dioxide into the room. Growing AAA is
labor intensive: The plants need daily watering, spraying and cutting back,
producing a trash bag full of unwanted leaves each week for a small grow.
David, the western
B.C. grower who dreams of making a million, has hired caretakers to oversee
three additional rooms of 20 lights each; the employees include a retired mining
executive and a middle-aged American fugitive, he says. They get 25% of the
crop, and David splits the rest with his financier, a retired grower/smuggler.
His landlords get an extra $1,500 a month on top of the rent, and he pays for
repairs from any water or soil damage when production ceases. He lives in a neat
house on a quiet cul-de-sac, rigged with radio-controlled motion detectors. Full
of kids, dogs and golf clubs, it is prosperous and unremarkable, except for
details like the beat-up cracker box brimming with the household pot stash and
the note on the fridge that reads: "Gretchen called: Probation!" It seems almost
like a game, until Anne, his wife, voices the underlying stress.
"When someone goes
down, we all feel really bad, but you can't get too close to someone who's
involved with the law," she says as she prepares the kids' breakfast. "You try
to keep them away from it as much as possible." A helicopter cuts through the
morning fog, and she tenses momentarily. "You do a lot of yoga; you try to
pretend it isn't real."
Prepared product is
packed in half-pound lots. Forty bags fit into a typical carry-on suitcase.
Small-scale marijuana smugglers, or "rabbits," run dope to the U.S in car rides,
marathon jogs, three-hour kayak trips or floating hollowed-out logs on the tide.
The Mounties, with a patrol fleet of just four boats, are not a big worry on the
water.
"You can get 80
pounds into a backpack, and you get big legs running over the mountain," says
Paul de Felice, co-owner of the Holy Smoke smokeasy in the eastern B.C. town of
Nelson. "I've seen them so
nervous they vomit before they take off--but I never see them stop."
As in all business, it is
important to manage risk. Jeff would first try a smuggling method with 50
pounds; if it worked, he would try 100, then 300. He moved pot in the fiberglass
hulls of yachts and in the false floors of long horse trailers. "No border agent
wants to unload all those horses, shovel out that manure," he says.
One method: Drag a
shipment underwater behind a fishing boat. A zinc strip fastens a buoy and a
length of line to the package. If the boat is stopped, the crew cuts loose the
shipment, which sinks, buoy and all. The zinc dissolves in the seawater within
12 to 18 hours, and the buoy surfaces with its line tied to the pot, letting
Jeff recover the dope. Another method involves bisecting a propane truck,
inserting 500 pounds of bud below a false floor and setting the gas pressure in
the truck to read as if it were full.
Eventually "you use
a lot of planes," he says. "They're faster, they give you more control and you
get better prices if you can deliver 40 miles over the border, past the hot
zone." Pilots fly low, hugging mountains on the lee side of fire towers.
Jeff has retired in
the face of exhaustion, a fear of snitches in the network and rumors that the
U.S. government has
planted an agent in the system, who over time is rising high enough to
decapitate a big smuggling operation. When asked how many people in the big
operations really leave, however, he says, "Maybe 5%. I've got pilots I made
millionaires, and they still fly." Jeff's fear of a mole may be well grounded,
for the Mounties hope to strike a blow to Canada's cannabis business with a
string of big, high-profile busts over the next several years. But the pot
business, with a structure less like typical crime rings and closer to that of
the Internet--lots of little nodes (in this case, producers) feeding a loosely
organized hierarchy--will be difficult to shut down.
The Mounties are
not happy about legal marijuana for medical patients--they say the drug needs
more study before it is dispensed--but they worry more about the effect of the
marijuana-rich gangs on the Canadian economy. It is not just the possible
violence (U.S.
guns have been traded for Canadian pot), but the business considerations. "There
are many millions of dollars here, wrecking the legitimate business," says Rafik
Souccar, director general of drugs and organized crime enforcement for the
Mounties. The contraband dealers launder money through unprofitable concerns,
which then charge artificially low prices for legit goods.
Police also worry
about the hazards of poor electrical wiring, hazardous molds and excessive
chemical use at grow houses--and a public too blasé about the dangers of drug
use. "Part of the problem is a laissez-faire attitude on the part of the
public," says Charlie Doucette, a Mountie in charge of drug enforcement in
Vancouver. "We don't have
an appetite in Canada to say 'This isn't right.'"
Some police think
the battle may well be over. Rollie Woods, head of vice and narcotics
enforcement for the
Vancouver police
department, noticed indoor growers throwing out unwanted leaves and dirt at a
site the city uses for refuse collection. He told the staff there to note the
license plate numbers of every such farmer but called off his plan a few months
later. "There were hundreds [of cars]. No way we could track them all." At this
point he supports legalization, if only so he can concentrate on Vancouver's
growing crack problem.
"If it wasn't for
pressure from the
U.S., we'd just regulate
this," says Woods, who has all of six agents pursuing the pot trade. Investing
millions more in a crackdown may be of little consequence, he adds. "You could
give me a hundred people, and it wouldn't make a difference."
Newshawk:
Forbes Cover Story
Pubdate: 10 Nov 2003
Source: Forbes.com
Contact:
privacy@forbes.com
Website:
http://www.forbes.com/free_forbes/2003/1110/146.html
Author:
Disclosure Statement
This web page and related elements are for informative purposes only and thus
the use of any of this information is at your risk! In accordance with Title 17
U.S.C. Section 107 and The Berne Convention on Literary and Artistic Works,
Article 10, news clippings on this site are made available without profit for
research and educational purposes. Any trademarks, trade names, service marks,
or service names used on this site are the property of their respective owners.
Back to News Article Listings...