WASHINGTON — The medical marijuana industry is beginning to show its age. After humble California beginnings in 1996, 15 states and the District of Columbia now have legalized marijuana use for ill patients who have a doctor’s recommendation.

Medical marijuana has been found to help with chronic pain, nausea and other symptoms of diseases including cancer, muscular dystrophy and AIDS. Nearly 25 million Americans are medically eligible to buy marijuana.

Sales are expected to hit $1.7 billion this year. Just last week, a San Francisco-based outfit, the ArcView Group, formed the industry’s first investment network to link cannabis entrepreneurs to qualified investors with “seed” money.

“It doesn’t take a rocket scientist to realize that this industry is growing and that there are untold riches to be made here,” said Troy Dayton, the chief executive of the ArcView Group.

In coming months, Arizona, New Jersey, Rhode Island and the District of Columbia will launch programs, joining eight states where medical marijuana is sold legally. Those states are California, Colorado, Maine, Michigan, Montana, Oregon, Washington and New Mexico.

But around the country, some law enforcement officials have expressed concern that medical marijuana could be obtained by relatively healthy people who could get a recommendation from a physician by lying or overstating their pain and suffering.

They also worry that some dispensaries could grow more marijuana than their patients could consume, leaving an excess that could make its way to the illegal market.

While legal for medical purposes in many states, marijuana remains an illegal controlled substance under federal law, although since 2009, the Justice Department has said it won’t prosecute medical marijuana use within the bounds of states’ laws.

With more than 1,500 growing operations and dispensaries nationwide, the medical marijuana industry has defied the recession and prospered even as the broader economy stalled. This month, Maine became the first state east of Colorado to allow dispensaries to provide cannabis to seriously ill patients.

One of the new operators, Maine Organic Therapy, has been making home deliveries to more than 20 patients for about three weeks, said chief executive Derek Brock. Patients in Maine can purchase as much as 2.5 ounces every two weeks, or a maximum of 5 ounces a month.

Strong public support has helped fuel the industry’s eastward expansion, but that growth has also brought growing pains.

Industry reps say section 280E of the Internal Revenue Code unfairly bars legal medical marijuana operations from deducting business expenses from their income taxes. Dispensaries nationwide are facing Internal Revenue Service audits over the measure.

Other dispensaries have found that banks won’t maintain their business accounts, fearing federal scrutiny over reporting requirements for ties to businesses that violate federal law.

The National Cannabis Industry Association was formed late last year to help address these concerns. On Wednesday, the trade group held its first national lobby day, visiting lawmakers on Capitol Hill as part of a push for greater legislative clout.

“These kinds of days are necessary, because it puts a face on the industry,” said Rep. Jared Polis, D-Colo., one of the industry’s staunchest supporters.

While 76 percent of medical marijuana sales nationally are generated in California, Colorado has the nation’s fastest-growing market. More than 131,000 Coloradans are registered marijuana patients, up from only 7,000 in 2008.

Colorado Dispensary Services, which operates three dispensaries and three commercial growing operations, has had five different bank accounts in three-and-a-half years, owing to state regulatory friction. Owner Jill Lamoureux said it’s impossible to manage nearly 50 employees and $120,000 in monthly payroll without a bank account. State regulators have taken notice.

“These regulators need to see our bank accounts, and if we do not have access to banking, it makes it impossible for them to regulate,” Lamoureux said. “Frustrating is an understatement to say how difficult it is to run a business” without banking services.

Last year, Polis and seven other Democratic lawmakers wrote a letter asking the U.S. Treasury to declare that it wouldn’t target banks with account holders that operate in compliance with state medical marijuana laws. Federal regulators deferred, arguing that banks must make those calls themselves.

Polis said he’ll introduce legislation soon that clarifies banks’ responsibilities when dealing with marijuana dispensaries. He said support for the issue is bipartisan, citing Republican Reps. Ron Paul of Texas and Dana Rohrabacher of California as sympathetic to the industry’s plight.

Harborside Health Center, a nonprofit dispensary in Oakland, Calif., serves 79,000 patients, pays more than $3 million in state, federal and local taxes and employs 80 people who get paid vacations and 401(k) retirement plans. Yet they’ve had their bank accounts closed three times and are facing an IRS audit.

Stephen DeAngelo, the executive director of Harborside, said the center is being treated like an illegal trafficker rather than a community service organization.

“We do not deserve to have our accounts frozen or to be taxed out of existence,” DeAngelo said. “280E (of the IRS code) was intended for cocaine kingpins, international smugglers and crystal meth dealers. It wasn’t intended for organizations like ours, and it shouldn’t be applied to organizations like ours.”

Last year, Polis and five other Democrats asked the IRS to allow legal medical marijuana operations to deduct their business expenses, but the agency said it couldn’t do so. Only Congress could amend the Internal Revenue Code or the federal Controlled Substances Act.

Polis said that Democratic Rep. Pete Stark of California will soon offer legislation to do just that.

Recent history suggests that clearing up the industry’s tax and banking concerns could boost its growth. In 2009, the Justice Department issued a directive that people won’t face federal prosecution if they use or provide medical marijuana in compliance with state laws.

That proved to be a “major growth driver” for the industry, prompting hundreds of new marijuana businesses, while causing raids on marijuana operations to drop 58 percent, said David Guard, a researcher at See Change Strategy, an independent financial-analysis firm.

Becky DeKeuster realized medical marijuana’s healing potential soon after she quit her high school teaching job to work in a dispensary in Berkeley, Calif., in 2002.

“On my first day there, I saw a patient in a wheelchair having (multiple sclerosis) seizures. And, literally, with two puffs off a joint, he stopped tremoring, and it was like, ‘wow, this is amazing,’” said DeKeuster, now the executive director of Northeast Patients Group, which operates four dispensaries in Maine. “I’m grateful to be in this industry and I consider it a blessing to be able to do the work I do.” By Tony Pugh. Source.

OVER — The Delaware Senate approved legalizing marijuana for limited medical purposes Thursday, despite reservations from some supporters who indicated the legislation has flaws.

The bill would decriminalize parts of the state’s drug laws and allow adults with debilitating diseases such as HIV or cancer to get permission from their doctors to purchase marijuana from a state-licensed dispensary.

On an 18-3 vote, the Senate sent Senate Bill 17 to the House, where supporters believe they have enough votes to get the legislation to Gov. Jack Markell’s desk for a signature. Critics said the bill puts Delaware on a path toward legalizing marijuana altogether.

“If you don’t think this is a step in that eventual process, you are sorely mistaken,” said Sen. Colin Bonini, R-Dover South.

Markell, a Democrat, supports the concept of the bill and changes that have been made to address concerns by doctors and law-enforcement agencies, spokesman Brian Selander said.

“There’s a long road between the concept of providing medical marijuana to people with medical needs like cancer patients and the implementation of that effort,” Selander said.

Fifteen other states and the District of Columbia already have legalized marijuana possession and use for medicinal purposes. Pennsylvania and Maryland lawmakers are currently considering similar legislation.

“This is really out of compassion for people who have been suffering unnecessarily,” said Sen. Margaret Rose Henry, the bill sponsor and a Wilmington Democrat.

After the bill passed, Henry handed out packages of brownies from BJ’s Wholesale Club, making a joke about the recreational use of “pot brownies” as an edible form of ingesting marijuana.

“They were just regular brownies,” Henry said afterward. “It was done in jest and not to take away from the seriousness of the bill.”

Under the bill, individuals with qualifying illnesses would be issued identification cards and be limited to purchasing up to six ounces of marijuana each month. Marijuana could only be purchased from a dispensary, and home cultivation would be prohibited. Qualifying conditions would include cancer, multiple sclerosis, HIV/AIDS, hepatitis C, post-traumatic stress disorder, glaucoma, Crohn’s disease, Lou Gehrig’s disease or other chronic wasting diseases.

Republican Sens. Joseph Booth, David Lawson and Bonini were the three senators who voted against the legislation.

Since the bill was introduced in January, lawmakers have heard testimony from individuals with debilitating diseases about how marijuana, used illegally, has helped them with pain management or helped them fight nausea caused by toxic cancer and HIV drugs.

“You don’t have witnesses and people whose personal lives, their family lives, have been irrevocably scarred by drug use,” Bonini said. “In lots of those cases, that drug use started with the product we’re talking about today.”

Despite the lopsided vote, some of the senators who voted “yes” expressed concerns about certain provisions in the bill.

Sen. Brian Bushweller, D-Dover, said he was concerned the bill could encourage unscrupulous doctors to recommend marijuana for patients in order to make money off additional visits.

Bushweller also expressed opposition to a section of the bill that could allow someone with a written doctor’s recommendation to use marijuana to make an “affirmative defense” in court if they were caught with marijuana before receiving their marijuana purchasing card from the state.

“I think that’s going to lead to a lot of unnecessary court cases, and I don’t think it needs to be in [the bill],” Bushweller said.

Still, Bushweller said, he felt the bill was tightly written to prevent the type of abuses in medical marijuana laws that have been documented in California and other states.

“This is not a California bill,” Bushweller said. “I believe the therapeutic value outweighs concerns about legitimizing it for recreational use.”

Henry said many details of the regulation of marijuana dispensaries will have to be crafted in the rule-making process by the Department of Health and Social Services.

“You don’t see everything written because we’re still evolving,” Henry said.

Department of Safety and Homeland Security Deputy Secretary Liz Olsen said her agency and the Delaware State Police remain neutral on the bill. But law-enforcement officials have worked with lawmakers to ensure police will have access to a database that tracks marijuana sales at the dispensaries or so-called compassion centers, Olsen said. During two hours of debate, the Senate added an amendment sponsored by Sen. Robert Marshall that would let individuals 18 years or older obtain medical marijuana. Marshall had sought to allow children with qualifying illnesses to get access to medical marijuana with permission from their parents, but that amendment was withdrawn because of lack of support. Henry said the American Academy of Pediatrics had written her a letter, warning of the negative health impact on children smoking marijuana.

Henry had another amendment added that would protect doctors who refuse to recommend marijuana use from being sued by their patients.

Markell will be examining the changes “to see how they impact implementation” of the law before considering signing the bill, Selander said.

Support in the Democratic-controlled House is seen as hinging on convincing retired police officers who are representatives that the benefits outweigh the potential problems of having two different marijuana laws in Delaware.

House Majority Leader Pete Schwartzkopf, a retired state police captain and Rehoboth Beach Democrat, said he had not read the Senate bill yet, but he’s convinced marijuana “does have medicinal value.”

Rep. Dennis P. Williams, a former Wilmington police detective, said “times have changed,” and the stigma of marijuana use is fading with recognition of its medical value.

“There’s some people in this building who smoked marijuana,” said Williams, D-Wilmington North. “They just won’t admit it. By Chad Livengood. Source.