Feb. 20 (Bloomberg) -- At the medical marijuana clinic in San Jose, California, known as Palliative Health Center, iPads are posted around the shop to cater to technology workers who buy their pot there.
The dispensary is four miles from Cisco Systems Inc. and 10 miles from Cupertino-based Apple Inc. About 40 percent of the shop’s clients are tech workers who use the iPads to select their buds before stepping up to the counter, said Ernie Arreola, the assistant manager.
“They’re the ones who really raved about it the most,” Arreola said of the high-tech answer to a price list. “We’re seeing people from some semiconductors, lots of engineers, lots of programmers.”
San Jose is the medical-marijuana capital of Silicon Valley with 106 clinics, about twice as many per square mile as Los Angeles. The number soared after 2009, when President Barack Obama’s administration told federal prosecutors not to file charges against legitimate dispensaries and their patrons.
The number of shops in the state’s third-largest city compares with 24 in San Francisco, the fourth-biggest, and five operating with permits in Oakland, the eighth most populous, according to officials.
The San Jose dispensaries are sprinkled amid the headquarters of technology giants including Cisco Systems Inc., Adobe Systems Inc. and EBay Inc. A short drive away are Mountain View-based Google Inc. and Redwood City-based Oracle Corp. Both communities have blocked similar dispensaries. Other neighboring towns have done the same or severely restricted them.
While California voters became the first to legalize medical-marijuana sales in 1996, distributors and retailers operate under constant threat of federal prosecution because marijuana is a controlled substance under U.S. law. San Jose taxes the businesses at 7 percent of gross receipts, amounting to $3.6 million in fiscal 2012, said Angelique Gaeta, an assistant to the city manager.
The city is awaiting a California Supreme Court decision on whether communities can ban dispensaries, Gaeta said.
“They’re all illegal -- our zoning ordinance does not allow them -- but our hands have been pretty much tied by the uncertainty in the law,” San Jose Mayor Chuck Reed said in an interview.
Their numbers in San Jose are “certainly many more than are necessary to meet the medical needs of our population,” Reed said. “It’s a demonstration that this is mostly about recreational drug use.”
Those buying pot at a dispensary are required to show that a doctor has recommended the drug for ailments as common as migraine headaches or arthritis, “or any other illness for which marijuana provides relief,” according to the 1996 ballot measure that started it all. Doctors charge about $40 for a recommendation.
Marijuana use is “extremely common” among tech workers, said Mark Johnson, 34, chief executive officer of San Francisco-based Zite. The company, owned by Time Warner Inc.’s CNN news channel, produces an application that offers a personalized news stream on iPads, iPhones and Google’s Android mobile phone.
“In the industry in general, from what I can tell, people just don’t care,” Johnson said in an interview. “If you do, you don’t need to hide it and if you don’t, you accept that there are people around you that do.”
The tech industry employs a lot of intelligent people, Johnson said.
“A lot of smart people smoked pot in college, and it’s a habit that never faded,” he said. “Pot is an extremely functional drug. Coders can code on it, writers can write on it.”
Johnson said he has bought marijuana in San Jose and San Francisco and smokes it daily to feel more relaxed.
“For me, pot is just a regular occurrence,” he said.
Per square mile, San Jose has about 1.7 pot dispensaries. That’s twice the density of Los Angeles, where 472 operating shops, or 0.94 per square mile, were documented in September, in a study by the University of California, Los Angeles.
MedMar Healing Center, a San Jose dispensary, offers a marijuana-infused chocolate toffee called “Veda Chews” that especially appeals to the roughly 15 percent of customers who are technology workers, said Douglas Chloupek, 35, the chief executive officer and co-founder.
“It does not give the high or intoxicated feeling that you would typically get from a lot of medical cannabis,” said Chloupek, whose shop is a half mile from Adobe headquarters. “Those who are coding for 15 hours a day with cramping hands, that is the product that allows them to have mental clarity and still get pain relief.”
“They either need something for the stress from work to relieve them or for the pain that they physically have, whether that’s from arthritic hands from typing for 15 to 20 hours in a two-day time period, to sitting down at their desk for multiple hours on end,” Chloupek said.
Veda Chews sell for $13. The shop also stocks $10 marijuana cigarettes with names like “Sour Grapes,” “Skunk” and “Super Silver Haze,” along with cannabis-infused breath sprays, brownies and chocolate.
John Lee, a 57-year-old San Jose resident, said he uses medical marijuana to manage pain resulting from a car accident and as a sleep aid.
Lee, who works part-time as a quality systems auditor at a semiconductor foundry he declined to name and as an independent consultant, said he tends to buy flowers and concentrates about once a week.
Lee, who said he doesn’t use marijuana at work, said that pot consumption is common among his technology-industry peers, for both medical and recreational purposes.
“It’s been accepted in this area for a very long time,” Lee said. “It’s not looked down on, partly because many Silicon Valley pioneers have acknowledged their use of marijuana.”
Steve Jobs, Apple’s co-founder, began smoking marijuana between his sophomore and junior years of high school, according to a biography written by Walter Isaacson.
“I got stoned for the first time that summer,” Jobs is quoted by Isaacson in the book. “I was 15, and then began using pot regularly.”
Part of Silicon Valley’s legacy is tied to the 1960s counterculture, said Paul Saffo, a managing director at Discern Investment Analytics Inc. in San Francisco, which advises institutional investors.
“Anti-establishment is one of the deepest traits,” he said. “Silicon Valley is a youth culture. When you have a young workforce, they’re bringing their habits to their work.”
Indeed, the number of potential tech industry employees showing positive results in pre-employment drug screening has increased, said Dr. Barry Sample, director of science and technology for Quest Diagnostics Employer Solutions. The company is a unit of Quest Diagnostics Inc., a clinical laboratory chain based in Madison, New Jersey.
“The Silicon Valley data supports recent news reports citing some employers who say they are having a hard time finding candidates that can pass the preemployment drug test,” Sample said.
Adobe doesn’t conduct drug testing, the company said in a statement, though “the use of illegal drugs and intoxicants is prohibited on Adobe premises.”
Cisco forbids use or possession of “illegal drugs while on Cisco owned or leased property, during working hours, while on company business or while using company property,” Robyn Jenkins-Blum, a company spokeswoman, said in a statement.
Besides California, 17 states and the District of Columbia have legalized medical marijuana. Voters in Colorado and Washington made their states the first to legalize recreational use.
At Palliative Health, three iPads are perched on silver, waist-high posts. Patients can scroll through and check prices on moss-like buds with names such as “Sour Diesel” and “Master Budda.”
The dispensary, which provides monthly classes on cooking with marijuana-infused products, draws tech workers from employers including Adobe, EBay, Cisco, Hewlett-Packard Co. and Applied Materials Inc., said Arreola, a 38-year-old San Jose resident.
Clients from tech companies tend to stop by late in the evening and buy more per visit while shopping less frequently than typical customers, Arreola said.
San Jose could close the dispensaries “but there are so many, and it is an issue of resources and where we want to focus those resources,” said Gaeta, the assistant to the city manager. Enforcement focuses on shops that aren’t paying the marijuana business tax, are too close to a school or are creating a nuisance, she said.
The city’s 2011 efforts to limit the number of pot clinics to 10 were stymied by the medical-marijuana industry, which challenged rules approved by the City Council to regulate the shops. That left the door open and the industry has flowered.
The marijuana dispensaries “go where they think they can make a buck,” said Mayor Reed. “We don’t have the capacity to stop them from operating.”
Johnson, the Zite CEO, said recreational marijuana use is essentially legal in California.
“Lots of people leaving college have smoked a joint or two or know friends who have smoked pot and realized that it’s not the demon that it’s made out to be,” Johnson said. “I see good days ahead for pot.”
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