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Allen St. Pierre, executive director of The National Organization for the Reform of Marijuana Laws (NORML) says the human migration from state to state inspired by cannabis laws largely has been one of patients. He says there hasn’t been any empirical study of the phenomenon, but he’s received myriad anecdotal evidence that some states have become magnets for “a great wave of migration” because of medical marijuana.
“They call [NORML] from Illinois, Mississippi, Tennessee, or wherever, and they say, ‘Listen, I’m desperate and dying. I’m losing my sight, I’m throwing up all day long and marijuana helps me immediately, but I don’t want my house to be taken away, my children to be taken away, I don’t want to be arrested, I don’t want to go to jail,’ ” St. Pierre says.
University of Utah business professor Debbie Scammon says a similar migration has occurred because the federal Medicaid program is run by individual states, with individualized policies. Patients sometimes move from one state to another, she says, if the treatment they desire is covered by Medicaid in one state but not another.
But it’s not just patients and consumers who migrate due to state laws: so do businesses and business people.
“A good example of that is the financial-services industry with [Utah’s] LLC bank law. Many businesses have come to Utah to set up those because of Utah’s laws that allow that kind of bank to exist, and many states don’t,” Scammon said. “I don’t have any empirical evidence for this, but I would say there is definitely business impacts in terms of employment. … We have more LLC banks in Utah than any other state that I’m aware of.”
Scammon says having the LLC banks concentrated in Utah has far-reaching impacts. “They’re under requirements for community reinvestment. Whatever funds they manage, they spin off investments in the community, building low-income housing, offering scholarships to low-income families. There are definitely spin-off effects.”
St. Pierre says there are “spin-off effects” for legal marijuana, as well, each of which generates tax revenue for state and local governments and creates jobs.
“[Producers] have to buy lights and electricity, bat guano and all these other things. … Twenty years ago, you might hire five people who sat there with scissors to chop marijuana into little pieces, but today you can buy a $5,000 to $8,000 machine to put in a Christmas tree-size marijuana plant. Someone has to make that. There are [safety] testing services that are becoming very popular … and they have to hire people with advanced degrees to operate those machines,” St. Pierre says. “You’ve got universities—the biggest brand name is Oaksterdam University, but that’s one of about 20 that are certification schools for people involved in ‘canna-business.’ … And even down to things like jars and the type of devices cannabis is actually sold in.”
All of that adds up to a big payday for medical-marijuana states.
California already reaps roughly $100 million per year in taxes on just cannabis, but in 2009 the state Board of Equalization estimated that California could reap $1.38 billion in tax revenue if marijuana were legalized entirely and taxed similarly to beer, wine and liquor. And those numbers don’t even capture the economic impact of the spin-offs.
Californians will vote in November on Proposition 19 (visit the Vote Yes website; visit the Vote No website), which would legalize marijuana for any purpose, regulate and tax it as well. California currently has a state budget deficit of $20 billion.
Local governments also benefit. Oakland last year became the first city in the United States to approve a tax on cannabis sales—$18 on each $1,000 in sales—that the city estimates will bring in about $300,000 per year, according to the 2009-2011 budget. That city is currently considering increasing its tax rate.
But all that tax revenue, and most of the economic development and jobs, just slough off to other states when regulation hits its pinnacle. Scammon says, while laughing, that prohibition is definitely a regulation, of sorts.
“I’m laughing because I just came from my public-policy class today, and we were talking about the philosophy of using the least-restrictive intervention [to regulate business],” she says. “And a product ban is probably the most restrictive.”
But reform advocates say regulating cannabis with the most restrictive regulation has had the unintended consequence of creating an entirely unregulated black market. The marijuana black market is alive and well in Utah, as Zeke’s history as a supplier to the Beehive State demonstrates.
Zeke grew his first cannabis plant in 1997, but it was a total bust. It grew to about 3 feet in its pot, but the plant turned out to be a male—only female cannabis plants create THC, the primary psychoactive substance in marijuana.
Soon after, his two roommates began a small grow operation in the basement of the Weber County home where they lived, and Zeke helped care for the crop. That’s where he began to learn the best practices for growing the “kindest” kind bud around.
“This was an op-er-ation,” he says, accentuating each syllable, “with an actual light system, not just some seed you put in a pot and put outside. You get duct work, you get lights, you get electricity, carbon dioxide.”
For more on the methods of cannabis growing, read
"Cops and Pot: What every cop should know about pot growers and growing pot."
The marijuana business merely supplemented his income; he maintained a day job installing appliances and luxury products in homes. After a year—and three or four harvests—he moved out and didn’t grow for several more years. It was always a fear of getting caught and going to jail that kept him from growing—which he says is inherently more risky than selling small amounts.
“But I was always selling,” so around 2001, he took another stab at growing pot. “It’s a no-brainer in any business: If you can just create the product you’re buying to sell, you may as well just create it to sell,” says the Weber State University business graduate.
That experiment was also short-lived, as life got in the way. “We had a few [plants] in the closet there for a minute that we were holding for a friend, and then I had one of my own that I did, but it wasn’t really much to speak of.” Before he expanded the operation, the girlfriend whom he lived with had a death in her family that rocked their relationship. They broke up, he moved out, and his first real attempt at creating his own marijuana farm ended.
But not for long. In 2002, he was living with a new set of two roommates in rural Weber County. “We had the best there was to offer,” he says. “We were stoked. We were all organic, even then.”
He says the giant outdoor-grow operations frequently seized in Utah are like the “Walmarts” of the cannabis industry. Not only are local growers completely independent of the mountainside super-growers—which both law enforcement and Zeke say are primarily agents of Mexican cartels—the locals have open disdain for the giants.
“I’ve always been in a special part of the industry because I have super-progressive friends and most [growers] don’t even go organic. Most people … go hydro, they use Miracle-Gro, and I never have,” he says, complaining about the chemical pollution and litter he says mega-growers leave in the national forests.
Around 2004, Zeke was caught with about a quarter ounce of marijuana for his personal use that an officer found in his car. He spent the night in jail on suspicion of driving under the influence and eventually took a plea deal that involved no more jail time.
That one night in jail reminded him of what he already knew: He was engaged in a very risky business. As a result, for the next two years, during the housing boom, he focused entirely on his day job, which on unusually good days brought in $800 per day, but $200 to $300 per day wasn’t uncommon. He bought a house in Salt Lake County in 2006 and might have never grown marijuana again but for the bust in the housing market.
“I pretty much lost my job in [2007],” he says. “Within a year of buying my house, both companies [he did contracting for] shut down ... It didn’t slow down, it halted. I didn’t have work for months at a time.”
He did odd jobs to get by, like painting, laying tile, moving, even gambling, but before long, he was visiting friends in California and bringing back small amounts of marijuana and sundry equipment—like a spare light his friends weren’t using. His basement became a cannabis farm.
The odd jobs were nothing compared to the $4,000 per month his basement grow house generated. It was “ghetto fabulous” he says. “I was struggling to make my mortgage each month. I had no money, but I’m pulling off some pretty sick nuggets that helped me keep my house. … That only came to an end because I came out here [to California]. My second opportunity to return to the promised land arose. I took it and sunk my ship in Utah.”
He says he could have made his basement a $40,000 per month operation, but he fears that the resulting electric bill would have tipped off police.
He’s now part of a team, getting paid $3,000 per month to tend to a number of plants, though he wouldn’t say exactly how many. He’s worked in all sorts of communities, from Mendocino to Humboldt counties, even near Sacramento in Grass Valley, but always with friends he’s known for years. As a one-man grow show in Utah, he spent a lot of time at home without many guests, tending to his plants and keeping a low profile.
“I felt very vulnerable in Salt Lake that I would get robbed,” he says, explaining why guests rarely—if ever—were invited over. But he still worries about getting robbed in California, too. “In Utah, the biggest worry is police, and in California, if you’re abiding by the rules they’ve given you to be in this industry, your biggest worry isn’t police, it’s being robbed.”
Even still, with less pressure to keep operations secret, Zeke has partners who tend to the plants as he drives to the coast to go surfing, for example. He dreams of someday being the head of that kind of operation: his own gig, with his own rules and people whom he employs to help him. That could never happen at home. In Utah, he watched his plants like he was raising a new puppy, never leaving them alone for more than a few hours.
