The Tibetan prayer flags suspended on a string over the sleeping body of Captain Blue rose and fell in fluttering counterpoint to the wheezy rhythm of his breath. Lifted by a gentle breeze off the Pacific Ocean, each swatch of red, white, yellow, or green cotton bore a paragraph of Asian script. Every time a flag flaps in the breeze, it is thought, a prayer flies off to Heaven. Blue’s mother says that when her son was an infant he used to sleep until noon, which is still the time that he wakes up most days, on his platform bed in a one-bedroom apartment overlooking Venice Beach, a neighborhood of Los Angeles.

California now has more than two hundred thousand physician-sanctioned pot users and hundreds of dispensaries. Illustration by Adrian Tomine

It was now three o’clock in the afternoon, and Captain Blue was dozing after a copious inhalation of purified marijuana vapor. (His nickname is an homage to his favorite variety of bud.) His hair was black and greasy, and was spread across his pillow. On the front of his purple T-shirt, which had slid up to expose his round belly, were the words “Big Daddy.” With his arm wrapped around a three-foot-long green bong, he resembled a large, contented baby who has fallen asleep with his milk bottle.

Captain Blue is a pot broker. More precisely, he helps connect growers of high-grade marijuana upstate to the retail dispensaries that sell marijuana legally to Californians on a doctor’s recommendation. Since 1996, when a referendum known as Proposition 215 was approved by California voters, it has been legal, under California state law, for authorized patients to possess or cultivate the drug. The proposition also allowed a grower to cultivate marijuana for a patient, as long as he had been designated a “primary caregiver” by that patient. Although much of the public discussion centered on the needs of patients with cancer, AIDS, and other diseases that are synonymous with extraordinary suffering, the language of the proposition was intentionally broad, covering any medical condition for which a licensed physician might judge marijuana to be an appropriate remedy—insomnia, say, or attention-deficit disorder.

The inside of Blue’s apartment, where he spends most of his time, measures less than four hundred square feet. It opens onto a huge wraparound terrace that offers mind-bending views of the ocean and the Hollywood Hills. The apartment, which is in the vicinity of Washington Boulevard, used to be occupied by another pot dealer, who moved out a few years ago, leaving Blue with his crash pad and a list of about a hundred patients. The building is near Abbot Kinney Boulevard, the commercial drag in Venice that, in recent years, has been transformed from a low-rent strip of bars and secondhand-clothing stores into a destination for well-heeled shoppers and restaurant-goers. The building retains a funky seventies vibe, with white wood floors, murky brown walls, and faded Morrison Hotel-style carpets. The sounds of “Tom and Jerry” episodes blare through locked doors in the middle of the day.

I recently spent six months, off and on, with Blue—at his apartment, in private homes, on farms, in pot grow rooms, and in other places where “medical marijuana” is produced, traded, sold, and consumed in California. During that time, I saw thousands of Tibetan prayer flags. The flags identify their owners with serenity and the conscious path, rather than with the sinister world of urban dope dealers, who flaunt muscles and guns, and charge exorbitant prices for mediocre product. For Blue and tens of thousands of like-minded individuals, Proposition 215 presented an opportunity to participate in a legally sanctioned experiment in altered living. The people I met in the high-end ganja business had an affinity for higher modes of thinking and being, including vegetarianism and eating organic food, practicing yoga, avoiding prescription drugs in favor of holistic healing methods, travelling to Indonesia and Thailand, fasting, and experimenting with hallucinogenic drugs. Many were also financially savvy, working long hours and making six-figure incomes.

Blue and I have known each other for almost two decades. Our fathers were both professors of political science, and, starting in the mid-eighties, we both attended Ivy League colleges in the Northeast, where we shared a fondness for illegal drugs. After graduation, Blue spun records and taught nursery school in Manhattan. He left for California in 1998, not long after the state banned cigarette smoking in workplaces—Blue is highly allergic to cigarette smoke—and passed Proposition 215. After working for a while as a bouncer, he began selling pot full time.

In 2003, the California State Legislature passed Senate Bill 420. The law was intended to clear up some of the confusion caused by Proposition 215, which had failed to specify how patients who could not grow their own pot were expected to obtain the drug, and how much pot could be cultivated for medical purposes. The law permitted any Californian with a doctor’s note to own up to six mature marijuana plants, or to possess up to half a pound of processed weed, which could be obtained from a patients’ collective or coöperative—terms that were not precisely defined in the statute. It also permitted a primary caregiver to be paid “reasonable compensation” for services provided to a qualified patient “to enable that person to use marijuana.”

The counties of California were allowed to amend the state guidelines, and the result was a patchwork of rules and regulations. Upstate in Humboldt County, the heartland of high-grade marijuana farming in California, the district attorney, Paul Gallegos, decided that a resident could grow up to ninety-nine plants at a time, in a space of a hundred square feet or less, on behalf of a qualified patient. The limited legal protections afforded to pot growers and dispensary owners have turned marijuana cultivation and distribution in California into a classic “gray area” business, like gambling or strip clubs, which are tolerated or not, to varying degrees, depending on where you live and on how aggressive your local sheriff is feeling that afternoon. This summer, Jerry Brown, the state’s attorney general, plans to release a more consistent set of regulations on medical marijuana, but it is not clear that California’s judges will uphold his effort. In May, the state Court of Appeal, in Los Angeles, ruled that Senate Bill 420’s cap on the amount of marijuana a patient could possess was unconstitutional, because voters had not approved the limits.

Most researchers agree that the value of the U.S. marijuana crop has increased sharply since the mid-nineties, as California and twelve other states have passed medical-marijuana laws. A drug-policy analyst named Jon Gettman recently estimated that in 2006 Californians grew more than twenty million pot plants. He reckoned that between 1981 and 2006 domestic marijuana production increased tenfold, making pot the leading cash crop in America, displacing corn. A 2005 State Department report put the country’s marijuana crop at twenty-two million pounds. The street value of California’s crop alone may be as high as fourteen billion dollars.

According to Americans for Safe Access, which lobbies for medical marijuana, there are now more than two hundred thousand physician-sanctioned pot users in California. They acquire their medication from hundreds of dispensaries, collectives that are kept alive by the financial contributions of their patients, who pay cash for each quarter or eighth of an ounce of pot. The dispensaries also buy marijuana from their members, and sometimes directly from growers, whose crops can also be considered legal, depending on the size of the crop, the town where the plants are grown, and the disposition of the judge who hears the case.

California’s encouragement of a licit market for pot has set off a low-level civil war with the federal government. Growing, selling, and smoking marijuana remain strictly illegal under federal law. The Drug Enforcement Administration, which maintains that marijuana poses a danger to users on a par with heroin and PCP, has kept up an energetic presence in the state, busting pot growers and dispensary owners with the coöperation of some local police departments.

In the past five years, an unwritten set of rules has emerged to govern Californians participating in the medical-marijuana trade. Federal authorities do not generally bother arresting patients or doctors who write prescriptions. Instead, the D.E.A. pressures landlords to evict dispensaries and stages periodic raids on them, either shutting them down or seizing their money and marijuana. Dispensary owners are rarely arrested, and patient records are usually left alone. Through trial and error, dispensary owners have learned how to avoid trouble: Don’t advertise in newspapers, on billboards, or on flyers distributed door to door. Don’t sell to minors or cops. Don’t open more than two stores. Any Californian who is reasonably prudent can live a life centered on the cultivation, sale, and consumption of marijuana with little fear of being fined or going to jail.

Captain Blue displays his pot on a shelf by his bed, next to two new laptop computers and an assemblage of high-end stereo equipment. The weed is kept in silver Ziploc bags. All the pot that Blue sells is grown in accordance with California state law, he says, and is provided only to dispensaries of which Blue is a member, and to patients for whom he is the primary caregiver.

Blue has a photo I.D. card from the City of Los Angeles confirming that he is a bona-fide medical-marijuana patient. His malady is anxiety. On a side table by his bed, he keeps a Volcano, a German-made vaporizer that resembles a stainless-steel coffeemaker. The Volcano, which costs five hundred dollars, warms dried marijuana, releasing vapor into a plastic bag and leaving behind a toasted brown chaff that smells oddly like popcorn. When Blue uses the Volcano, he inhales the contents of the plastic bag through a bong, which purifies the vapor.

While Blue napped, I wandered around his apartment, and counted nearly a dozen images and carvings of the elephant-headed Hindu god Ganesha. The proliferation of Ganesha dates back to a well-publicized federal bust in January, 2007, when the D.E.A. seized the medicine and cash of eleven pot dispensaries in Los Angeles. The only major dispensary that wasn’t busted had a Ganesha in its window. Now it is hard to find a karmically inclined ganja dealer in Los Angeles who doesn’t own a herd of lucky figurines.

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Blue’s cell phone rang several times in succession, rousing him. His phone rings, on average, once every two and a half minutes between noon and 2 A.M., and I soon developed a Pavlovian aversion to his ringtone, a swirling, Middle Eastern-inflected electronica tune called “Lebanese Blonde.” Blue switches phone numbers every six months or so. Although it is unlikely that the D.E.A. would tap his phone, he told me, it doesn’t hurt to take simple precautions, if only to reassure his more paranoid clients.

Blue answered the phone, rubbed his eyes, and began rattling off numbers. “Three hundred fifty? Three-fifty? Three-twenty-five? We could do three-twenty-five,” he said, quoting a final price per ounce. Assuming a sitting position on his bed, he punched numbers into a calculator and suggested some designer strains that his patient might enjoy.

“Try Sour Diesel,” he told the client. “Take that and the Bubba Kush.” In addition to Sour Diesel and Bubba Kush, which are grown indoors, he also had AK Mist, an outdoor strain; Jedi, which is brown and fuzzy; Purple Urkel, whose hue is suggested by its name; O.G. Kush and L.A. Confidential, two particularly potent strains; and Lavender, a fragrant purple grown up North. Modern Kush plants are derived from a strain that is said to have originated in the Hindu Kush mountains, in Afghanistan and Pakistan, and, according to stoner lore, was imported to Southern California by some hippie surfers in the seventies, and then popularized in the late nineties by the Los Angeles rap group Cypress Hill. Stronger, better-tasting varieties of pot can sell for more than five thousand dollars per pound, more than double the price of average weed. The premium paid for designer pot creates a big incentive for growers and dealers to name their product for whatever strains happen to be fashionable that year. The variety of buds being sold as Kush has proliferated to the point where even the most catholic-minded botanist would be hard pressed to identify a common plant ancestor.