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Pot grower cultivates murky business

By Nigel Duara

Associated Press

POSTED:
LAST UPDATED: 07:33 a.m. HST, Jan 03, 2012


PORTLAND, Ore. » Paul Stanford had lived a life of error, missteps and regrets, one laden with betrayals and failure. Then, on Nov. 3, 1998, Oregon voters approved the medicinal use of marijuana.

And in this way he was saved.

Stanford's business is medical marijuana, and he is the nation's leading gateway to the drug. In Oregon, Hawaii, Michigan and three other states where it's legal, he charges a small fee for access to sympathetic doctors. People walk in as customers and leave, mostly, as patients.

It's an idea that has garnered him thousands of dollars -- or, depending on who you believe, millions. His Hemp & Cannabis Foundation has established clinics or traveling practices in 20 cities in six states, with plans to expand. In 13 years Stanford, 50, has climbed out of a hole of debt and into the warm lap of the nation's medical marijuana community.

Stanford isn't just a marijuana-license distributor. He's also a gifted grower whose plants have earned him first-place awards at medical marijuana competitions in the U.S. With such a green thumb, several patients have designated him as their pot grower, and he's responsible for 80 plants at a warehouse in southeastern Portland.

But there is another side to Stanford. Creditors say he has deceived them, the government says he's a tax dodger; charged with felonies, he has pleaded down to lesser offenses. He has filed for bankruptcy at least twice. For at least three years, he paid off his personal bills with money from the foundation, and when the feds found out, he simply gave up the foundation's nonprofit status.

When cornered, time and again, Stanford wriggles his way out. His most recent legal problem, a state court matter that took him to a rainy corner of Oregon in the spring, also ended with a deal. As punishment for avoiding personal income taxes for two years, he paid more than $10,000 and was sentenced to 160 hours of community service.

For the moment he has quieted his creditors and worked out a deal with the IRS. He presses onward; he next plans to expand his business into Nevada.

But the questions persist. Is Paul Stanford the beleaguered yet sincere advocate for marijuana that he presents himself to be, or is he something else?

A SAVIOR TO SOME

Stanford's eyes flit about a cramped storefront in southeastern Portland. He's surrounded by true believers, the men and women of the pro-cannabis movement who have stood by him and his cause for nearly three decades. If he were a politician, this would be his hard-core base.

Stanford -- his bulky, 6-foot-3-inch frame uncomfortably tucked into a small folding chair -- is fronted by a table full of the accoutrements of the medical marijuana trade. There's no fresh bud, but there's lots of hemp in the form of hemp oil and hemp lotion and even hemp shampoo.

The pro-cannabis rally is the site of the launch of the Oregon Cannabis Tax Act, Stanford's 2012 ballot measure intended to legalize, tax and sell marijuana. The room reeks of pot, the goods in the hands of a few people who likely got their first legal toke after walking out of one of Stanford's clinics.

To some dope enthusiasts, Stanford is something of a savior. It was he who brought the medical marijuana law from theory to practice, the one who went beyond the idea of asking patients' personal physician for permission to use marijuana and, instead, simply brought marijuana-friendly doctors to them.

These are the folks Stanford has inspired in 30 years of marijuana activism. But he has angered others, among them hopeful venture capitalists left empty-handed, pro-marijuana political donors who feel cheated and fellow medical-marijuana campaigners who insist Stanford's motives are impure.

Stanford, a former member of the Youth International Party -- the Yippies -- started down this road when he drove to a smoke-in on his 18th birthday in Washington, D.C. By 1980 he was in college in Washington state and running legalization drives there.

He moved to Oregon in the mid-1980s. Here it's worth considering how a novice computer science major rose to such a high station among medical marijuana advocates. It began with the boot of a police officer plowing through the lock on his apartment's front door in 1986.

Stanford, joint in hand, was caught growing pot. He served five months' probation and forged ahead with plans to legalize marijuana in Oregon.

In 1989 Stanford founded a hemp importation business. It was called Tree Free Ecopaper, and it was not successful. Stanford lost a court battle when he broke his probation by traveling out of the country, and served a five-month prison sentence in 1991.

Upon his release he returned to the business but managed to anger investors and lose lawsuits to people who accused him of taking money while running up debts he has yet to repay. Stanford explains it now as a simple problem of paying his employees too much and not managing expenses.

By 1997 Stanford's hemp-importation company had gone bust. Creditors, and bankruptcy, were closing in.

A year later 600,000 Oregon voters decided marijuana had a medicinal purpose, and for Stanford everything changed.

Business is now booming for Stanford. In Oregon, 99 percent of applicants get weed, and more applicants go through Stanford than anyone else. At $160 per visit-- less for low-income patients -- the company grossed $4.2 million in 2009 and $4.9 million in 2010, he said.

Marijuana exists in an odd state of legal limbo in the state.

The law says patients can grow marijuana or have it grown for them, but they can't sell it. Further, there are restrictions on height and maturation, two solid indicators of how much cannabis a plant will yield.

For example, 1.5 ounces of the strain White Widow in one user's hands is a legally approved palliative; in another's hands it's a maximum sentence of 10 years in prison. A foot-tall Strawberry Cough plant is a producer of medicine; a 13-inch plant is a felony.

The genius behind Stanford's business model is simple. As long as the state of Oregon and others like it wink and nod at the medical qualifiers of marijuana and legislate it to semilegal status, Stanford's business will thrive.

EXPANDED EMPIRE

Stanford expanded his marijuana-certification empire beyond Oregon's borders, to Michigan, Montana, Colorado. Each time a state legislature approves medical marijuana, it's a safe bet that Stanford will be there.

Bruce McKinney, an investor and former Micro-soft programmer, would warn them to be wary. Mc-Kinney made millions in the Seattle tech market and began to donate some of it to marijuana activists. One of them was a bright upstart named Paul Stanford.

Based on a friend's referral and an article in a Seattle newspaper, McKinney gave Stanford a loan in 1999. Then he gave him another one. By 2000 McKinney realized Stanford wasn't planning to pay him back.

What followed was a series of suits for more than $38,000. McKinney tried to seize Stanford's house, his car -- anything -- to no avail. He has now resigned to the fact that he'll likely never see the money.

"Paul doesn't cheat his enemies," McKinney said in an email. "He cheats his friends."

The IRS has no fewer than three judgments against Stanford, the largest of which was for $200,751 on Feb. 23, 2009. Stanford refused to comment on the judgment other than to say that he's on a payment plan.

The state of Oregon, meanwhile, has filed more than $33,000 in tax liens against him, which Stanford said he's close to paying back.

PUSHING HEMP

Stanford says medicinal use isn't his only interest in marijuana and hemp cultivation. Stanford thinks hemp seed oil can power our cars and hemp paper can save whole forests.

For now most of his publicity comes from his push for legalization. On July 13 an $11,000 donation was delivered to the Oregon Cannabis Tax Act 2012 coffers.

The source? Stanford himself, from a separate campaign account.

Unfortunately, the check bounced.

"Cash-flow difficulty," he said.

"So far, I have made over 98 percent of money raised and spent" in support of the initiative, he said. "I'm a believer. I am trying to get others to donate, too."

It would seem that the legalization of marijuana in Oregon would kill Stanford's business.

But a grow house in southeastern Portland, providing for many patients and owned by Stanford, tells a different story.

Inside are rows upon rows of towering marijuana plants, organized by strain, standing stock-still at attention like a well-trained rifle brigade. There's White Widow, AK-47 and Strawberry Cough, all cultivated by Stanford's expert hand, all ready for the possibility that marijuana is legalized in Oregon.

It's all legal now, each set of plants dedicated to a person who is entitled to get it. And if Stanford, medical-marijuana activist, gets legal weed to pass at the ballot box, this grow house could be one of the epicenters of marijuana production in the city and perhaps the state.

And Paul Stanford, as always, would stand at the head of the pack.






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