Nov. 21 (Bloomberg) -- Tony Aquino, 58, is a self-described “1 percenter” who’s bought and sold more than 30 Southern California properties from the coast to the desert. Walter Jimenez, 29, is a short-order cook and air-conditioning installer. They’re joined by a common interest: California’s latest Gold Rush, medical marijuana.
The investor and the cook shrug off federal crackdowns in an industry valued at $1.3 billion by the California Board of Equalization, the state’s tax collector. They joined more than 30 people who paid Los Angeles-based MedMen University $100 to $250 for one-day courses on how to cash in as “bud tenders” and dispensary operators.
Since California first legalized marijuana for medical treatment of diseases such as cancer under a “compassionate use” law in 1996, the practice has spread to 17 other states. This month, Massachusetts became the latest, while Colorado and Washington went further, approving recreational use. There’s nothing but growth ahead, said Adam Bierman, MedMen’s co-founder.
“The momentum in the country is shifting and it’s not going back,” Bierman told pupils in a Santa Monica hotel conference room on a Sunday morning. “The cat’s too far outside of the bag in California and you can’t put it back.”
Bierman, who said he doesn’t use marijuana medically or otherwise, urged students to operate their businesses openly and to market themselves without fear of “harassment” by authorities.
“You’re protected by the state,” Bierman said. “Don’t hide.”
Federal law continues to ban use of marijuana, even for medical purposes with cancer and AIDS patients, and the U.S. Food and Drug Administration deems state medical-marijuana laws “inconsistent” with federal policy.
A commercial, for-profit industry was never intended to sprout around medical marijuana, said Scott Imler, 53, a West Hollywood minister who was an author of California’s 1996 law.
“It was all supposed to be of, by and for the patients,” said Imler, who said he used marijuana to deal with epileptic seizures caused by a 1993 skiing accident. “Unfortunately, that quickly went out of the window.”
Into the breach stepped a new generation of entrepreneurs. Aquino, who lives in the Los Angeles neighborhood of Echo Park, said he’s cultivating more than 500 marijuana plants in a “semi-legal” operation that brings him a profit and helps the suffering. It’s also a hobby of sorts, Aquino said.
“The way the plant responds when you’re taking care of it -- to me, that’s what motivates me,” he said at the MedMen seminar, where he wore an orange T-shirt and purple Uggs boots. “I don’t know how to explain it.”
Jimenez, who lives in Watts, said he endured salary and benefit cuts as an air-conditioning technician and short-order cook during the recession in Florida before the prospect of medical-marijuana wealth lured him to California last year.
Jimenez, who said he uses marijuana, said he was drawn to the renegade nature of the industry. He took the “bud-tending” course to learn to grow and market marijuana with the dream of one day running his own dispensary, he said.
“This is a new industry that’s mostly unregulated, so there’s an opportunity to make some money in it,” Jimenez said. “I see it like Google or the Gold Rush.”
Bierman urged his students to view medical marijuana as a business “like a dry cleaner or a shoe store.” That means spending money on advertising and marketing, and focusing on customer service, he said.
“Since you’re in business, be in business!” he said, raising his voice for the last three words. “Where else can you be in business and make seven figures in 1,200 square feet? I’ve never seen it before.”
Authorities are closing down for-profit medical marijuana clinics and arresting their operators, said Thom Mrozek, a spokesman for the U.S. Attorney’s office in Los Angeles. On Oct. 25, 12 people associated with nine dispensaries in Los Angeles and Orange counties were arrested on suspicion of violating federal drug-trafficking laws, the prosecutor’s office said.
“All of the commercial storefronts we’ve seen across California are in violation of California law for two reasons: they are for-profit operations, which is not allowed under California law, and secondly, these storefronts are not functioning as the primary caregivers for patients,” Mrozek said in an interview. “Certainly, the federal government’s efforts in California are continuing.”
Bierman and co-instructor Tyler Denham, a bearded 25-year-old who said he uses marijuana to deal with a bipolar disorder and depression, told their students that the law-enforcement efforts are bluster and will fail in court.
The classes were split between a lecture on how to avoid the hammer of the law and discussion of the fine points of the difference between the indica and sativa species of marijuana, and the relative medical benefits of smoking pot versus consuming it in brownies and other edibles.
Denham was careful to use medical terminology, referring to marijuana as medicine and users as patients.
Outside of the class, Bierman said that many users aren’t smoking pot or eating brownies for medical purposes, at least not in the traditional sense. He said he has mixed feelings about the growth of a billion-dollar industry out of what began as small collectives serving people suffering from cancer, AIDS and other diseases.
“There’s a problem with this whole word, ‘medical,’” Bierman said in an interview. “How can you call something medical that you won’t even allow a doctor to prescribe? If they want to make this purely medical, they can do it.”
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