Medical pot returning to underground

By Joe Mozingo, Los Angeles Times

Sept. 6, 2012 4:57 PM PT

A stocky onetime mortgage broker is speeding through Costa Mesa in an old pickup with two pounds of weed in a paper bag. He wears gray cargo shorts and flip-flops and a faded cap with the image of a marijuana leaf stitched on the front. He just smoked a joint thick as a knuckle.

Cypress Hill thumps through the cab.

I’ll hit that bong and break ya off somethin’ soon

I got ta get my props,

Cops, come and try to snatch my crops

These pigs wanna blow my house down

For a man whose apartment was raided recently and now faces felony drug possession and cultivation charges, he doesn’t seem particularly worried about the mission at hand. Ricky rants about a federal and local crackdown on medical marijuana that closed various dispensaries that he ran and forced him back to the streets, where he began as a teenager in the 1970s. (Except then, he was a dealer. Now he is a “mobile dispensary.”)

“It’s too late!” he bellows. “The genie is out of the bottle. A huge demand has been created. It’s back to the underground. Anyone who is smart is just going to take it back to the streets.”

He says he knows lots of people scurrying to the shadows as the state has struggled and failed to regulate the medical cannabis industry and local law enforcement agencies and the federal government have tried to curtail it.

It’s an easy journey to the underground, as the line between the legal and illegal markets in California has always been sketchy. The medical cannabis trade did not rise from a boardroom meeting when voters passed the medical marijuana initiative Proposition 215 in 1996. It sprouted out of the marijuana networks that already existed, with largely the same growers, middlemen and customers.

As the medical cannabis industry evolved, sharp differences with the illicit market developed, but only at the extremes: the AIDS patient getting his lab-tested cannabis from a dispensary in a regulated city like Berkeley on one end, the street dealer selling Mexican cartel weed to high school students on the other.

In the middle was a vast, amorphous gray zone, and many operators have found it wise to stay there, keeping their heads low and leaving no paper trail.

Which is how Ricky does business —- no taxes, no permits and no paperwork. He stashes his cash in safe deposit boxes all over and buries it in the ground. But he still sells only to people with medical recommendations, he says, mainly in case he lands in court and needs a defense.

At 48, Ricky has been an entrepreneur in legal and illegal ventures since junior high school in Long Beach. I met him through a mutual friend, and he asked me to withhold his name and key identifying traits for this story. “Ricky” is an alias he has used and he agreed to be interviewed on condition he not be identified beyond that. If prosecutors knew he had resumed growing in the bedrooms of his apartment after the raid, or that he had 96 plants on the North Coast, or had two “girls” delivering packages all over Orange County, or that he used to distribute Mexican and Canadian pot in the 1990s, it would undoubtedly complicate his legal problems.

The strain of bud he has under his seat today is relatively mild, grown on a patch of Mendocino soil he had a stake in the previous summer.

His gruff voice overpowers my questions and even the rap music, and it is clear the joint he smoked has set loose a runaway train of thought.

Forget complying with city regulations, he says, or the state Board of Equalization, which collects sales tax. “All you’re doing is creating a record for when they come back to get you later.”

“The cops want to make this ‘weed’ again. It’s medicine. I believe in this. I need it. I got my card. . . . It helps me deal with every day. . . . I do get high on my own supply.” He laughs hard enough to cough.

“The above board thing is a recent phenomenon. It was always illegal, and it still is in Orange County.”

As Ricky tells it, he loved weed since the moment he first tried it in seventh grade. In shop, he and his friends made little wood pipes with a grinder and drill. He never thought it made sense that it was illegal when alcohol was not.

A friend’s older sister was a hippie with stoner boyfriends, and from them Ricky, at age 14, bought good Mexican sensimilla, divvied it up and sold it to his buddies. He broke even on the deal, but kept a portion for himself. He says he met more connections and cut more deals.

He earned a business degree from a respected Southern California university (which he asked to remain unidentified; officials there confirmed the degree), and met a friend from Santa Cruz whose brother was a pothead. Making a couple of dope runs up there, he supplied his dorms when the rest of the region was going through a weed drought.

With capital from his dealing, he says, he started a car repo business while he was still in school and managed to buy two homes in the Inland Empire by the time he was 26. He kept his hand in the marijuana racket, and in the early 1990s, started working with a man who was importing 100-plus-pound shipments of Mexican and Canadian pot every few weeks.

Ricky helped distribute the drugs in addition to his legitimate jobs. He sold the repo business and started a heavy equipment rental firm, bought real estate and got into the mortgage game. But in 2002, he says, the cannabis importer lured him away from what he calls a six-figure job at an Orange County mortgage firm to work full time.

“I used to be a money-hungry yuppie, believe it or not. I drove a new BMW. My problem was how to deal with the money physically,” he says.

Years of hard partying with booze and drugs culminated in heart failure in 2005. Then the weed importer’s foreign supply dried up, he says. Ricky tried to regain his health, giving up heavy drinking and drugs other than marijuana, and set off on his own. He bought cannabis from growers in Humboldt County (and always grew some on his own) and sold it to dispensaries popping up around Los Angeles. In the new verbiage of the medical pot world, he was a “broker” or a “vendor.”

He saw how the dispensaries sold his weed for more than twice what he paid, which showed him how lucrative the retail end could be. So with a partner, he opened his first shop in 2008 in Long Beach. He did well, but it closed in a year and a half due to new city rules and he started another, and then another, growing plants in his apartment to supplement the supply brought by other brokers and growers. The shops did well, and he says he felt pride bringing quality marijuana to people for low prices.

Despite the problems, he was in the sunlight for the first time in his marijuana career and enjoyed it. He had always known he could end up in prison, and he prepared for it mentally, but things seemed to be changing.

Then he got busted.

From a tip, police put his apartment under surveillance and noticed his Edison meter was spinning like a ballerina, a sure sign that grow lights were guzzling power. They served a search warrant last year, seized his plants and about $20,000, and charged him with drug possession and cultivation. He’s preparing for trial now.

With the cities and the federal government cracking down, he closed his last shop in March.

He says he learned a lesson from his dispensary interlude, but it’s not about staying away from pot. It’s about thinking the government is ever going to accept the drug as legitimate.

“Everybody old school was amazed at first: You can have a store and advertise and be above board. But the reality is you can’t do that. . . . Everyone is just registering for their own take-down.”

Now his headquarters is his three-bedroom apartment, which is once again filled with pot plants. Young seedlings and clones sprout like little green starbursts all over his deck. His back bedrooms are jungles of various strains — Master OG, Blue Dream, Skywalker, Mad Man, Rigor Mortis — shimmering under blazing sodium lights. Branches of marijuana hang on lines over his own bed, drying.

Like many growers, he loves to show visitors his plants: “Smell that one. . . look at that bud. . . feel how gummy that is. . . Check out this picture from up north.”

He takes a swim in the ocean and sits at his coffee table watching TV as he trims the buds to sell and texts his “girls” on where to deliver it.

He says he makes sure to deliver only to people with a doctor’s recommendation for marijuana to comply with the medical marijuana laws, but keeps no paperwork. “A lot of the medical market is still underground because people don’t want to be registered — nurses, teachers, firemen. They can get fired for using marijuana,” he says.

Two young women do the smaller deliveries. Ricky does the larger transactions.

On this day, he is meeting a friend, a manager of a marine supply store whose mother is in a senior citizens’ home. “They don’t have a supply so he gives it to her and she distributes it,” Ricky says. “He sells it to other people too.”

He pulls up in front of a liquor store, next to a green sedan. “What’s up brother,” he says, as he gets out. “How you doing?”

“Hey bro,” his friend says, slipping him an envelope with $3,000.

Ricky hands him the bag of bud, and they part, not much different than it would have gone down 30 years ago, except for a broader clientele.

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