06/16/2011 11:46 am ET Updated Aug 16, 2011

Medical Marijuana -- No More Wild West?

This is part two about living with legal medical marijuana in CO, and why Attorney General Eric Holder fears that this is de-facto legalization. To read part one, CLICK HERE.

After applying for a license to use medical marijuana, Sam* drives to the closest dispensary to his home in Boulder. It's called Holy Herbs and looks like a crash pad, with shabby display cases containing jars of grass and an old refrigerator filled with pot-laced edibles. A live iguana, the owner's pet, sits in a corner.

The clerk, Rebecca, who has a Ph.D. in physics but was recently laid off from her teaching job, asks Sam what type of pot he likes.

"I don't know," Sam says. "I've just bought whatever was available."

Rebecca tells him there are two types: sativa, which is more cerebral and stimulates creativity, and indica, which works more to relax the body. There are also hybrids of the two, with names like Skywalker, Train Wreck and Afternoon Delight.

They move to the refrigerator and Sam picks a tiny round raspberry cheese cake made by the "Twirling Hippie," who's pictured on the label with a cowboy hat and curls.

"How much of this should I eat?" Sam asks.

"Depends on how much you smoke," Rebecca says. "How long will an eighth of an ounce last you? Two days? A week?"

"Oh... six months," Sam says.

"So you're a non-smoker," Rebecca says with a laugh. The cheesecake is marked "one dose" but she tells him to start with half, although it takes her two cakes to feel anything. That night Sam splits the little cake with a friend and neither can move or complete a sentence for the following 12 hours.

The dosage, he learns, is geared to regular smokers who've built up a tolerance. With smoking, one can tell right away how high one is getting but with edibles, the effect takes about an hour to be felt. As a marijuana attorney in Denver said, "Either the dose doesn't work, or your legs don't work."

Most of the strains are now organic but growers have yet to develop a strain that's low-cal -- that doesn't bring on the munchies. As Sam puts it, the problem is: if you've eaten half a brownie and are craving something sweet, the other half of that brownie starts pulling you like a magnet even though you don't want to get more stoned. "It's an attractive nuisance," he says.

Sam was happy with Holy Herbs. The cheesecakes were delicious and as Rebecca said, "Where else can you have a great time all night for $5?"

A few months later, though, Sam discovered that other dispensaries were giving products free to people who assigned them their growing rights. He checked around and switched to Majestic Mountain Meds, which gave him $50 worth of products as a signing bonus and one free gram of pot each week. All he had to do was fill out the "change of caregiver" form and Majestic Meds notarized and sent it to the state registry. In a short time, Sam had collected enough free pot for a year.

It was the Wild West. No one was monitoring the quality of the marijuana or integrity of the dispensaries. Nobody was making sure the product was all being accounted for and not slipping out the back door and being resold.

Politicians and local communities had been caught unprepared. They scrambled to regulate the booming new industry, with some cities passing laws to limit the number of dispensaries that could operate and preventing them from being built within so many yards of a school. As if! Kids don't move around town and see the dispensaries? This year, on April 20, also called 420 -- the national pot smoking day -- more than 10,000 young people gathered on the commons at CU to smoke, while the police stayed away.

The big question was: how much tax revenues were being generated by medical pot sales? Nobody knew. All sales were subject to tax by state and local governments, but merchants weren't required to report what they were selling. It could be shoes or marijuana.

The authorities did know how much they were getting in application fees: $90 for every person seeking a license and $7,500 to $18,000 for each dispensary, plus $1500 for a grow license.

In 2010, the state took charge and passed a law setting up a regulatory board for medical marijuana centers. They also passed 70 pages of regulations, starting with the requirement that all pot sold in the state be grown in the state, and all patients must be state residents. All edibles must be produced in the city or town where they're sold. No such rules apply to any other product sold anywhere.

The new rules go into effect July 1, and will also prohibit dispensaries from giving free products to patients. The state wants the tax revenue and if products are given away, they won't be taxed.

The regulations are voluminous and minute, stipulating what locks must be installed on dispensary doors and what kind of video security cameras must be operated at what hours. Marijuana will be monitored "from seed to sale." Every stalk of weed will be assigned an electronic traceable number -- a radio-frequency identity tag like those attached to merchandise at stores to track inventory and set off alarms at doors.

The monitoring of pot from planting to processing to final sale to the patient creates a "closed loop," whereby no marijuana crosses state lines. This may protect Colorado from intervention by the feds, who recently sent notices to the 16 states that have legalized medical marijuana. Governors were warned that they're putting state employees at risk of federal prosecution for regulating a substance that's illegal under federal laws.

This makes no sense. Why prohibit regulation of a controversial and ungainly new industry? Because regulation will make the business seem legitimate? Attorney General Eric Holder promised on June 2 to clarify the Justice Department's position, which seems untenable. How can the feds, as they've threatened, prosecute everyone from growers to legislators and regulators, now that 16 states and D.C. -- nearly a third of the country -- have legalized medical marijuana?

Jeff Gard, a Boulder attorney who's an expert on marijuana laws, says, "I'm hopeful that we're at the beginning of the end of prohibition and moving toward responsible use and regulation, in the same way we regulate alcohol and tobacco." Gard adds that in 15 years of criminal defense work, "I've never seen a guy who smoked a joint and beat his wife and kids. But alcohol is involved in almost every criminal case."

What seemed impossible just a few years ago -- the decriminalization of marijuana -- may indeed happen in our lifetimes.

I'm eager to hear your thoughts -- please leave a comment.

* Because of the shifting sands, the names of marijuana dispensers and users have been changed, but make no mistake, they are real people.