Humboldt County News - ABC News Calls Arcata Marijuana Boomtown

Posted on Sep 5, 2008 - 7:55

Yikes. ABC News has an in-depth article on marijuana profits in, where else, Humboldt County, and how Arcata is basically marijuana central, home to weirdos and pot profiteers.

We're glad that Mary Spicuzza, author of the article published today on the ABC News website, noted that "tensions seem especially high" in Arcata due to the disagreements on the legality of such a highly profitable yet questionable industry. The article starts out describing Stephen Gasparas who owns the Arcata iCenter, and mentions that he makes about $100,000 from his marijuana business.

This surprises us, particularly because we are under the impression that it is not legal to turn a profit from medical marijuana, so it's interesting that Gasparas would reveal that he makes six figures and drives a brand new Toyota SUV. Are growers and dealers here so comfortable today that they don't even give a crap about the fact that growing pot for profit is illegal?

The article also discusses tax revenue from marijuana, stating that only $143 million in marijuana sales are reported annually statewide, netting $11.4 million in tax revenue. But conservative estimates of gross sales in Humboldt County alone are steady at $500 million, and Cal NORML even estimates that Californians grow/smoke/sell as much as $2 billion worth of marijuana each year. Where's the rest of the tax revenue? Oh right, there isn't any more, because the vast majority of marijuana growers and dealers in Humboldt County (and surely all of California) are actively evading taxes and dealing their cash crops to the highest bidders, especially out of state dealers. Then what do they do with their ill-gotten money? They buy fancy trucks and SUVs, of course.

So what happened to the feds? They rolled in and raided a fairly wimpy ring of suspected growers, somehow missing out on the half billion dollar industry that is largely criminal and illegal. Well, whatever. With articles like this getting national attention, it won't be long before they return...

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By no, on Sep 5, 2008 - 12:07

thems is some big numbers...

Taxes

By Humboldt Thug, on Sep 14, 2008 - 21:10

Those dispensary dudes obviously pay taxes, fill out the board of equalization paperwork, etc. or they wouldn't have storefronts as such. You are confusing legitimate business owners with Tony Montana. The dispensaries / cooperatives / whatever they are called these days have little to do with the hundreds of millions in lost tax revenue. Even the owners who do get busted, like that Luke Scarmazzo guy, have it come out that they paid a million dollars in tax. In his case, a small non-profit business makes enough profit to pay a million dollars and taxes and gets busted for being a continuing criminal enterprise based on intrastate commerce? Get real. These guys are not the problem, they are the solution to crap like Buddhaville and Southern Sweep.

profit

By Humboldt Thug, on Sep 14, 2008 - 21:13

Guess I meant to say "makes enough non-profit" up there, but Luke Scarmazzo's business wasn't made into a non-profit until after he paid all those taxes.

By Thomas Paine Jr., on Sep 16, 2008 - 7:50

So as for non profit...the collective has to be a non profit, but the employees can make a wage.
$100,000 is fair for working 7 days a week 10 hours a day.

non-profit/profit

By Humboldt Thug, on Sep 16, 2008 - 11:59

From what I understand about these cooperatives, the non-profit is achieved by paying out higher rates than wholesale value to the medicinal Cannabis suppliers who are members themselves.

I don't understand why people dislike these cooperatives so much. The alternative for patients is to buy off of the street corner or from shady criminals in apartment complexes and such, as if that is better. My personal opinion is that the naysayers are so prejudiced that they will continue to be against any progress. In private and anonymously, they use words like "doper" and we all know what word that sounds like.

Co-operative Operator

By halo, on Sep 24, 2008 - 21:56

It's very easy not to turn a profit in the world of MMJ. Just to name a few expenses calculated in operating expenses are : Loss of Medication (when the man comes in and steals it aka "confiscates" it from you), Legal Expenses, Taxes, Advertisement, Rent, Liability Insurance, Wages, Health Insurance for staff, Fees from all support personel like (accountants, lawyers,security personell,etc..etc...). Not to mention the expense of obtaining the medication. We operate in compliance of Prop 215, as a result medication is dispensed on a "reimbursement of cost" basis. "Cost" would include operations expenses. Some of them are outlined above. In the end I still reflect on the blessings this flower brings to everyone involved. From manufacturer to the man or woman who packs the bowl.

By Thomas Paine Jr., on Sep 25, 2008 - 7:34

Medical Cannabis torefronts must be Non profits (like goodwill, or the mateel), the employees, managers and providers may earn a WAGE + cost of production. It is not illegal to make money from cultivation, that is a common myth.

Ag guidlines sectionb part 4

4. Collectives Should Acquire, Possess, and Distribute Only Lawfully
Cultivated Marijuana: Collectives and cooperatives should acquire marijuana
only from their constituent members, because only marijuana grown by a qualified
patient or his or her primary caregiver may lawfully be transported by, or
distributed to, other members of a collective or cooperative. (§§ 11362.765,
11362.775.) The collective or cooperative may then allocate it to other members of
the group. Nothing allows marijuana to be purchased from outside the collective or
cooperative for distribution to its members. Instead, the cycle should be a closedcircuit
of marijuana cultivation and consumption with no purchases or sales to or
from non-members. To help prevent diversion of medical marijuana to nonmedical
markets, collectives and cooperatives should document each member’s
contribution of labor, resources, or money to the enterprise. They also should track
and record the source of their marijuana.

Ag guidelines pection B part 6
6. Permissible Reimbursements and Allocations: Marijuana grown at a
collective or cooperative for medical purposes may be:
a) Provided free to qualified patients and primary caregivers who are
members of the collective or cooperative;
b) Provided in exchange for services rendered to the entity;
c) Allocated based on fees that are reasonably calculated to cover
overhead costs and operating expenses; or
d) Any combination of the above.

Learn to read

Taxes, Drugs, Govmnt, big business

By rushbeno, on Oct 12, 2008 - 11:18

All the comments about who's paying taxes on the pot and who's getting busted.
Big business and Government work hand in hand. The biggest business in the US in drug running. Figure it out. Drug revenue is "money for nothing".
Do you really think the feds DON'T have a have their hand in the "POT" (so to speak).
Why is it still illegal (pot) that is.
Because legally it's too eaily "produced by the masses" and the gov't would lose lots of "$ for nothing".

no gov

By blancostine, on Oct 13, 2008 - 8:15

No, the reason pot is illegal in this country is because a bunch of super conservative religious freaks are blindly opposed to it, which is a result of the original "reefer madness" propoganda campaign that went on when marijuana was outlawed in the first place. it was blamed for all sorts of evils, and that stigma stuck with the bible belt and the loud, wealthy people who influence our lawmakers in this country.

Prices never dropped

By Shai Hulud, on Oct 6, 2009 - 13:57

Why are Californians still paying way too much for buds? I mean c.mon... $60 an EIGHT? Patients are so desperate they will pay it, but you know it is WRONG to charge sick people so much money for their meds.

Even at $350 and Oz, there is at least 700% profit being made.

blancostine, decide who you are

By its me, on May 13, 2010 - 8:23

Your comment of No GOV makes no sense. You say it's the conservatives that are the religious freaks. liberals are the ones that keep making more bigger government. When George Washington started this country as our first president, he wanted small government to keep the rights of the people. Washington was a member of the federalist party, now called the republican party. I do agree with you about the right wing nut jobs and the left wing nut jobs, real people are in the grey area in the middle.
Remember, An armed society is a polite society.