Washington's Weed Whackers
For most of Stephanie Kahn’s life, medical marijuana was a tempting remedy that remained just out of reach. Her father, who suffered from multiple sclerosis, was told by doctors as early as the 1970s that medical marijuana could alleviate his symptoms. At first, he was repelled by the idea of using an illegal drug. But as the pain and muscle spasms grew worse, he eventually tried marijuana and found that, as the doctors said, it provided almost-miraculous relief.
Decades later, when her mother was undergoing chemotherapy for lung cancer, Kahn, a nurse, heard the same refrain. “She lost 45 pounds in a month and a half,” she recalls. “And the doctor kept saying, marijuana could help her handle the chemo, could help her get her appetite back.”
Months after her mother’s death in 2009, Kahn’s husband of 37 years, Jeffrey, a Reform Jewish rabbi who had retired from congregational ministry a few years earlier, floated an unorthodox idea: What if they opened a medical marijuana dispensary? “At first I thought it was totally insane,” she says. “But then I thought, this would be a great way to honor my parents’ memory. To have a place where people like them could come, and it would be warm and professional and safe. And they wouldn’t be doing something illegal.”
Today, the Kahns are the owners of Takoma Wellness Center, a new medical marijuana dispensary in Takoma, a neighborhood in northwest Washington, D.C. Their two sons—one of whom is also a rabbi—and daughter-in-law have all pitched in to help. Along with two other D.C. dispensaries—Metropolitan Wellness Center and Capital City Care—Takoma Wellness Center opened at the beginning of August, after more than three years of logistical headaches and months-long silences from the bureaucracy responsible for implementing D.C.’s new medical marijuana program—not to mention the byzantine state regulations and federal prohibition on marijuana that make it nearly impossible to get a family-owned dispensary off the ground.
By coincidence, the Kahns moved to Takoma just months before D.C. began a long and laborious process to establish its medical marijuana program. A ballot initiative legalizing medical marijuana passed in 1998 with 69 percent of the vote, but Congress, which has ultimate authority over the D.C. government, froze the use of local money for the program. In 2009, Congress freed D.C. politicians to allocate funding for medical marijuana, but it took several months to update the bill. Finally, in summer 2010, the City Council voted unanimously to allow doctors to recommend marijuana for D.C. residents with cancer, glaucoma, HIV/AIDS, severe muscle spasms, and other “chronic and lasting” diseases. Mayor Adrian Fenty signed the bill into law soon after.
If D.C.’s program had gone into effect when the initial ballot initiative passed, it would have been one of the first of its kind. But now, more than a decade later, there is a deluge of state-level legislation permitting the sale and growth of medical marijuana. Medical marijuana is legal in 20 states and the District of Columbia. Public opinion is on supporters’ side: According to a Fox News poll released in May, 85 percent of Americans believe that marijuana should be legal for medical use if a physician prescribes it.
In spite of these political victories, challenges abound for anyone who has considered selling or growing medical marijuana in the states where it’s legal. The federal government classifies marijuana alongside heroin, ecstasy, and LSD as an extremely dangerous drug with no approved medical use. Under this taxonomy, marijuana is a greater public hazard than cocaine or methamphetamines. The semantics and politics of the issue put medical marijuana dispensary owners and cultivators in a serious bind. Even if their business is sanctioned, regulated, and licensed by the state, the federal government could shut it down—and they could face prosecution under federal law. A series of raids on medical marijuana dispensaries in Montana in 2011 resulted in 33 convictions. Earlier this year, The New York Times profiled a California dispensary owner who could face a mandatory minimum of five years in prison.
Over the past 15 years, states have instituted increasingly sophisticated and restrictive regulatory processes in the hope of deterring federal investigation. This pressure for tight regulation, in turn, creates a listless, unpredictable, and expensive bureaucracy. In some ways, the Kahns were ideally situated to navigate this process. For the past 20 years, Stephanie has worked in regulatory compliance at hospitals and treatment centers across the country. Her extensive background in the health-care world was especially valuable in D.C., where the Department of Health (which could not be reached for comment) is responsible for standardizing and monitoring the medical marijuana program.
Even so, the Kahns were shocked by the amount of red tape they encountered. Across the country, no two medical marijuana laws are the same; each state is, to a certain extent, reinventing the wheel. This meant that after going through an extensive process to gain the support of their neighborhood—no small feat, Stephanie notes, considering that for many of their future neighbors, their dispensary might as well have been a recovery center for heroin addicts—and filing 350 pages of application materials, even the most basic elements of opening a small business, like getting a fire or health inspection, were glacially slow. “Every time we went to get a permit, people would ask us, can you really do this?” explains Jeffrey. “It was all new for them too. So it was the normal hassle of opening a business, but on steroids.”
Some of these challenges are unique to D.C. Perhaps because it’s literally in the federal government’s backyard, D.C.’s law is one of the most restrictive in the country. In Massachusetts, for example, patients with a wide range of illnesses—including Crohn’s disease, hepatitis C, and Parkinson’s disease—qualify for medical marijuana; DC’s list of approved diseases is much narrower. Unlike in California, where doctors can write unlimited prescriptions for medical marijuana, patients seeking access to the program must have a recommendation from a physician with whom they have an established relationship—and if their doctor disapproves of medical marijuana, tough luck. D.C.’s regulations also made for an inauspicious beginning, when the dispensaries finally opened their doors. Since patients were not permitted to start registering for the program until the dispensaries were ready to open, there are all of nine card-carrying medical marijuana patients in D.C. today.
“This is exactly what we expected,” Jeffrey says. “From the health department’s perspective, until there was a dispensary open, there was no point in opening registration for patients. We don’t have a line around the block, but why should it be quick? Nothing about this process has been quick.”
Others are less sanguine about the dearth of paying customers. “We’re wondering how we can sustain ourselves without patients,” says Vanessa West, the general manager of Metropolitan Wellness Center, a medical marijuana dispensary in southeast D.C. “Every day, I get phone calls from people who are qualified—they just don’t know how to go about getting registered. We can help them to a certain extent, but physicians need to be more aware of the program.”
To complicate things further, physicians employed by federally funded hospitals can’t write recommendations for medical marijuana. But many doctors who are technically free to direct their patients to medical marijuana are also anxious about running afoul of the federal government, which has a large financial investment in medical research. “It would be hard to find a doctor who thinks that cannabis is more dangerous than pharmaceutical painkillers,” Jeffrey explains. “But nobody wants to damage their relationship with the government, and risk losing their funding.”
The federal government’s prohibition on medical marijuana continues to haunt dispensary owners even after their businesses open, hampering their relationships with banks and the Internal Revenue Service. Because of federal regulations that bar banks from doing business with drug traffickers, medical marijuana dispensaries have found it difficult to find a bank who will give them a small-business loan or even let them open a checking account. Like other D.C. dispensary owners, the Kahns were unable to find a bank to accept their business, and have been bankrolling the Takoma Wellness Center’s substantial start-up costs—they have been paying rent on their space since 2011—with their own savings. They were reluctant to discuss their lack of a checking account, but dispensary operators and their advocates have been vocal about the perils of operating a cash-only business. “Apart from being inefficient, it makes the owners and the patients vulnerable to all kinds of security issues,” says Kris Hermes, a spokesman for Americans for Safe Access, a group that advocates for safe and legal medical marijuana.
Filing taxes is another hurdle that the Kahns have yet to cross, although they’re aware of its hazards. They have a California-based accountant on retainer to help them navigate a law called IRS Code Section 280E. This provision, which was passed by Congress in the early 1980s after a drug kingpin successfully wrote off yachts and guns as business expenses on his taxes, prevents business owners from making deductions related to a federally controlled substance—in this case, marijuana. Under 280E, the IRS has been aggressively auditing medical marijuana dispensaries and refusing to allow them to write off hiring, rent, health-care benefits for employees, and, of course, product. “When 280E was passed, there were no state-legalized cannabis dispensaries,” says Henry Wykowski, a San Francisco-based attorney who represents medical marijuana dispensaries under audit. “Nobody thought about 280E for 20 years, and then all of a sudden the federal government, which wasn’t having much success in closing down the state authorized medical cannabis dispensaries in California, decided they would tax them out of business.”
The Kahns remain cautiously optimistic that these financial obstacles will be removed before they face an audit. Earlier this summer, a bipartisan group of representatives, primarily from states with legal medical marijuana, introduced legislation that would exempt marijuana dispensaries from 280E, allowing them to operate like other small businesses. A second bill would prevent the federal government from penalizing banks that provide services to medical marijuana dispensaries.
Meanwhile, the threat of a federal raid still looms over their heads, although others like West, who previously worked at a dispensary in California, say they’re less concerned about non-financial intervention. In other states, the federal government has shut down dispensaries by threatening landlords with the confiscation of their property. But they also conduct old-fashioned raids, smashing windows and kicking down doors. According to Jeffrey, Takoma Wellness Center is fully compliant with D.C. regulations, but that doesn’t guarantee safety from the federal government. His hope, he says, is that because many federal employees live in their local community, if the government intended to shut down the medical marijuana program, they would have done so before the dispensaries opened.
Now, their focus is on attracting patients. Despite the tortuous process, full of long waits and large up-front costs, the Kahns say they have no regrets. “I keep myself from getting emotional when I talk to the patients,” Stephanie says. “But it’s hard, because being able to open this dispensary was something that was just so meaningful to me. As a nurse, I’ve been in the helping business all my life, and this is another way to give back.”
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