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Steller: Tucson risks losing a longtime industry — marijuana

2014-03-02T00:00:00Z Steller: Tucson risks losing a longtime industry — marijuanaTim Steller Arizona Daily Star Arizona Daily Star

If there were one business at which Tucson would excel, surely it would be marijuana.

This is a city, after all, that’s been getting the nation high for the last 50 years. Day after day, week after week, year after year, our fine citizens have been shipping hundredweights of smuggled Mexican pot from the Old Pueblo’s stash houses to dealers in the Midwest, South and East.

But now the legalization movement, celebrated by cannabis consumers, is posing surprising threats to our traditional marijuana economy. It’s a real double downer.

Last week, Star apprentice Brittny Mejia reported on one shorter-term threat: Zoning limits on the size of medical-marijuana cultivation sites in the Tucson area have driven growers to set up in Phoenix, even if they’re selling down here. Bloom Dispensaries has two sites where it sells medical marijuana in Tucson, but when it came to setting up a grow operation, the company picked a 35,000-square-foot site in Phoenix. It employs about 50 people.

Then there’s the longer-term threat to Tucson’s marijuana economy: the legalization movement itself. While being a center of black-market commerce has drawbacks — underworld executions, home invasions, public corruption — it also has provided work for generations of Tucson families. In 2001, I wrote a series about Tucson’s marijuana economy, called Stash City, that estimated Tucson’s take from distributing Mexican marijuana at $350 million in 2000 alone.

“The same people who we dealt with 20 years ago, they’re still at it,” said Chris Nanos, chief deputy of the Pima County Sheriff’s Department. “And if it’s not them, it’s their sons and cousins and family.”

The problem of cultivation limits was born of the uncertainty surrounding medical marijuana when the law was coming into effect in 2011 and 2012. The city of Tucson limited medical-marijuana cultivation sites to 3,000 square feet, while Pima County, Sahuarita and Oro Valley limited the size to 2,000 square feet.

That has proven inadequate, not just due to growing demand for medical marijuana, but also because of the accompanying change in social attitudes toward marijuana.

“People need to understand there’s been a huge paradigm shift over the last 10 years about marijuana,” said Tucson City Council member Paul Cunningham. “There’s an opportunity here from a business and economic-opportunity standpoint.”

“This is a possible revenue source for the city as well,” he added.

That’s a pretty compelling argument in a city that has just awoken to an upcoming $33 million deficit.

Now Cunningham and fellow council member Richard Fimbres are asking the council to reconsider the issue at the March 18 study session.

“What we’ll probably find out is that, yes, it’s fair, but there’s a missed opportunity because if we continue to limit our growth, we’ll have our patients buying from dispensaries, and they’ll be furnished by places in Phoenix,” he said.

Bloom Dispensaries is looking to select another indoor cultivation site of about 100,000 square feet, said Lezli Engelking, executive director of Bloom Phoenix and marketing director of Bloom Dispensaries.

“We would love to go into Tucson and have a cultivation facility down there,” she said. “So many big empty warehouses are there already.”

As good as Tucson has always been at distributing pot, Phoenix has always been better at counting money.

Over the longer term, Tucson’s black market in marijuana faces the threat of obsolescence. You can’t tell that from official figures like the U.S. Border Patrol’s marijuana-seizure records. In the fiscal year that ended Sept. 30, 2013, agents in the Tucson sector seized 1.1 million pounds of marijuana, not far bellow the record of 1.25 million pounds seized in 2009.

But you can see changes out on the interstates of northern Arizona. When I was a police reporter in Flagstaff in the mid-1990s, Arizona’s Department of Public Safety was cracking down on load vehicles on Interstates 17 and 40. Almost all were coming from Tucson.

Down the road in Holbrook, that pattern appears to be changing, said Jim Molesa. He’s the chief deputy of the Navajo County Sheriff’s Office but retired in December 2012 after more than 20 years working for the U.S. Drug Enforcement Administration in Arizona.

“The bulk of the marijuana that we are now seizing does not come from Mexico. It comes from the Central Valley in California,” Molesa said.

Yes, it’s being grown there, perhaps semi-legally for California’s medical-marijuana program, then shipped illegally out of state. It’s a higher-quality product because of its higher THC content and sells for perhaps $3,500 to $4,000 per pound, rather than $600 a pound for the lower-grade marijuana typically coming from Mexico, Molesa said.

While Colorado and Washington have already legalized the personal use of marijuana without a medical reason, at least five more states are considering legalizing either medical marijuana or adult use of pot this year.

The ability to collect taxes on the product is one of the reasons, and for some people eliminating the black market is another.

But the black market will remain as long as the high-grade marijuana costs so much more than the “commercial” product that comes across the border, said Jon Gettels, president of AZ4NORML, the Tucson branch of the National Organization for the Reform of Marijuana Laws.

That price gap will remain until larger-scale marijuana-grow operations help bring the price down, Gettels said.

“I want Arizona-grown marijuana to be the product people use,” he said. “Every pound of marijuana that’s grown in Colorado, California, Michigan, Mexico is money that leaves here and doesn’t get put back in our economy.”

It would be silly to argue that marijuana will be the economic savior for Tucson — just as silly as ignoring that it has been significant in our economy for decades.

But why would we hand over our advantage in a growing economic sector where we have expertise?

Contact columnist Tim Steller at tsteller@azstarnet.com or 807-7789. On Twitter: @senyorreporter

Copyright 2014 Arizona Daily Star. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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