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Making the Medical Marijuana Market



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Making the Medical Marijuana Market
Cyrus Dioun
Cannabis, commonly known as marijuana,”“pot,or weed,is a owering
herb that has psychoactive and physiological effects when inhaled or
ingested. Societies have cultivated and consumed cannabis for millennia, yet
the cultural meaning and legal status of the herb have varied over time and
across cultures. Cannabis was rarely consumed in the United States until the
middle of the nineteenth century, when medical professionals began recom-
mending it for a variety of ailments. Cannabis was rst added to The Pharma-
copeia of the United States (1851), a list of medicinal preparations recognized by
medical professionals, at the 1850 National Medical Convention.
The follow-
ing year the Dispensatory of the United States, a list of legitimate medicinal
substances and preparations, described the efcacy of cannabis for neuralgia,
gout, rheumatism, tetanus, hydrophobia, epidemic cholera, hysteria, mental
depression, insanity, and uterine hemorrhage(Wood and Bache 1851).
Cannabis was sold in elixirs, tonics, and other homeopathic medicinal
remedies until moral entrepreneurs and state builders pushed for its prohib-
ition in the early twentieth century, framing cannabis as an evil plant that
caused madness, criminality, and violent, depraved acts in the user (Stanley
1931; Anslinger and Cooper 1937; Rowell and Rowell 1939; Becker 1963).
While Cannabis Sativa is the ofcial taxonomic designation for the cannabis
plant, the media and public ofcials popularized the term marijuana,a slang
word for cannabis used by Mexican-American farm workers, in order to tie the
plant to xenophobic fears of Mexican immigrants and other minority groups
Hemp, a non-psychoactive variety of the cannabis plant, had been used as a textile throughout
the early history of the United States.
in the early twentieth century (Bonnie and Whitebread 1970). Cannabis was
prohibited at the state and federal level in 1937 and removed from The
Pharmacopeia of the United States in 1942.
These campaigns not only successfully changed the legality, medical
status, and name of cannabis (i.e. marijuana), but also transformed public
perception of the owering herb.
In the decades following prohibition,
both prohibitionists and marijuana users primarily conceptualized marijuana
as a recreational intoxicant used for hedonistic pleasure. This recreational
intoxicant conception, still prevalent today, described the act of using mari-
juana as getting highor getting stonedand portrayed marijuana users as
potheadswith a hang-loose ethicin opposition to the laws and norms of
mainstream society (Suchman 1968). Prohibitionists classied marijuana as a
dangerous drug and associated marijuana users with criminal behavior and
a lack of motivation (Becker 1963; Drug Free World Foundation 2013).
Marijuana consumers described the herb as an intoxicant that was a safe and
pleasurable alternative to alcohol (McAdory 2013). While opponents and
proponents of marijuana use held diametrically opposing views, stigmatizing
or valorizing marijuanas intoxicating properties, both groups viewed it pri-
marily as an intoxicant, not a medicine, following marijuanas prohibition.
In 1970 the US government codied the recreational conception of mari-
juana when it enacted the Controlled Substances Act (CSA), which classied
marijuana, along with heroin, LSD, MDMA, and a number of other psyche-
delics, opioids, and amphetamines, as Schedule 1 narcotics with no currently
accepted medical valueand high potential for abuse(21 USC }812). This
classication prohibited the medical use of marijuana and obstructed research
into its medical applications. While the US government had prohibited mari-
juana use for decades, the CSA marked the beginning of the war on drugs,in
which federal, state, and local governments escalated the arrest and prosecu-
tion of producers and consumers of marijuana and other illegal drugs. In the
following decades, the number of marijuana arrests in the United States
increased from 59 arrests per 100,000 of the population in 1969 to 276 arrests
per 100,000 of the population in 2010 (US Department of Justice 19652010).
Economists estimate that federal, state, and local authorities spent approxi-
mately $13.4 billion in 2010 enforcing marijuana prohibition (Miron 2010).
Marijuana prohibition remained relatively unchallenged until the AIDS epi-
demic created a deadly crisis that pushed patients and their loved ones into the
illegal market to search for ways to combat the effects of the disease. During the
Proponents of cannabis prohibition were also active in the temperance movement to prohibit
alcohol and the movement to ban opioids.
As marijuanawas the common term used to describe cannabis following prohibition, I will
use it when describing developments and events that took place after marijuana use was federally
prohibited in 1937.
Cyrus Dioun
height of the epidemic, many AIDS patients experienced cachexia (wasting syn-
drome), a complication of AIDS that diminished appetite and the ability to absorb
nutrients, leading to rapid weight loss and increasing the likelihood of death. Some
AIDS patients, searching for ways to cope with the disease, found that marijuanas
antiemetic propertiespopularly known as the munchies”—increased appetite,
helping patients retain weight and live longer (Grinspoon et al. 1995).
Marijuanas ability to alleviate some of the suffering caused by the AIDS
epidemic created an opening for social movement activists and illegal marijuana
sellers to construct a new conception of marijuana as a compassionate palliative
for the seriously ill and dying. This discursive opportunity did not lead to the
displacement of the recreational intoxicant conception of marijuana, but rather
provided a platform for entrepreneurs and activists to append it, carving out (or
layering on) an understanding of marijuana as a medical palliative for the sick
and dying, even though the state did not recognize its medical use.
Marijuanas ongoing prohibition obstructed the development of formal
market institutions, leading market pioneers in San Francisco, who were
located at the intersection of the marijuana market and the citys gay com-
munity, to build an interface between the illegal market and the legitimate
needs of dying patients. These strategic and value-rational actors constructed
the foundations of what would become a multi-billion dollar medical mari-
juana industry by openly defying the law and constructing informal institu-
tions, such as organizational forms (the marijuana buyersclub) and rules of
exchange (proof of medical need), that were sanctioned by society, while
remaining formally prohibited by the state.
Market pioneers helped legitimize and legalize these informal institutions by
developing frames and targeting political opportunities at the local and state level
where they could bypass lawmakers and win support for medical use through the
ballot initiative, a form of citizen legislation in which the public votes on a
referendum to approve or reject a law. These efforts were successful: San Francisco
voters passed a ballot initiative authorizing the medical use of marijuana in 1991
and California voters followed soon after to make it the rst state to authorize
medical marijuana use in 1996. By June 2016, twenty-ve states and the District of
Columbia had enacted laws allowing the medical use of marijuana, giving rise to a
$4.5 billion industry that was simultaneously state-authorized and federally pro-
hibited (ArcView Market Research and New Frontier 2016).
Theoretical Development
Theories of institutional change often describe how an exogenous shock, such
as a war, nancial crisis, or epidemic, can challenge institutional arrangements
previously taken for granted and create political and cultural opportunities
Making the Medical Marijuana Market
for the transformation of prevailing attitudes and social congurations
(Baumgartner and Jones 1993; Beissinger 2002). During these unsettled
times, actors seek ways to cope with the insecurity caused by the crisis at
hand. This back-against-the-wallreaction to crisis can lead those directly
affected, as well as those in the surrounding community, to reconsider
accepted truths; it can also give rise to new ways of understanding the world
and mobilize groups to develop support for institutions that codify these
emergent conceptions (Swidler 1986; Fligstein 2001).
For example, before the AIDS epidemic there was a wide range of consumer
products and related topics known to marketing professionals as unmention-
ables,dened as products, services or concepts that for reasons of delicacy,
decency, morality or even fear, tend to elicit reactions of distaste, disgust,
offense, or outrage when mentioned or openly presented(Wilson and West
1981: 82). Condoms, female hygiene products, sexually transmitted infec-
tions, and homosexuality could not be mentioned in commercial advertise-
ments because they were taboo. But the death and devastation of the AIDS
epidemic made it necessary to discuss previously unmentionable topics, cre-
ating a new openness regarding the advertisement of products related to sex
and the body (Wilson and West 1992).
Illegal products not only draw the stigma of society, but also the prohibition
of the state. Illegal markets are, by denition, banned by the state, which
obstructs the development of market institutions such as property rights, gov-
ernance structures, and rules of exchange (Campbell and Lindberg 1990;
Beckert and Wehinger 2013). Even if actors are successful in developing socially
legitimate uses for a stigmatized product, extant institutions prohibiting the
sale of that product can prevent the growth of institutions that coordinate and
safeguard exchange. Thus, a crisis might change public perception of an illegal
product without leading to the legalization of that product. In these cases
legitimacy and legality diverge, creating an ambivalent interface between the
illegal market for a product and its legitimate crisis-specicuse.
Legitimate but illegal markets face a fundamental problem: consumers
without illicit ties lack access to the market. The precarious nature of such
markets pushes illegal exchange into the shadows, where informal networks
allow actors to develop trust and routinize transactions away from the surveil-
lance of the state, and where conicts and disagreements are often adjudicated
with violence (Portes and Haller 2005; Beckert and Wehinger 2013). Fearing
prosecution by the state and the uncertainty of selling to strangers, dealers of
illegal products sell through their personal networks, making it difcult for
those without a friend-of-a-friendto gain access.
Thus, when an illegal
In contrast, actors in legal markets may openly advertise and sell their wares to any qualied
customer without fear of state prosecution.
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product or practice suddenly becomes necessary during a crisis, law-abiding
consumers with a socially legitimate claim to purchase the product may not
have the chthonic connections to gain access to the illegal market.
In markets that are characterized by ambivalent interfaces and limited
access, market pioneers must broker between illegal producers and legitimate
consumers while also constructing informal market institutions that are
aligned with the new legitimate use for the prohibited product. By creating
visible and accessible institutions, market pioneers take on greater risk of
prosecution than they would when operating in the shadowy illegal market,
out of view of the state. Market pioneers who are willing to risk prosecution in
order to create an interface between the illegal and the legitimate often
resemble social movement activists in both motivations and tactics. First,
actors willing to face the possible consequences of jail time by operating
openly are more likely to be driven by transcendental, value-rational goals,
as it is safer and still protable to stay in the illegal market away from pros-
ecution. Second, founders of new markets and organizational forms are likely
to use social movement-like tactics and construct and deploy frames that
target the state and society to develop support for market institutions (Rao
et al. 2000).
Social movement activists and market pioneers can use strategic frames,
schemata of interpretation,that allow actors to locate, perceive, identify,
and labelthe world around them, in order to develop support for new or
contested markets (Goffman 1974: 21; see also Snow et al. 1986; Snow 2004).
Strategic framing is a process of theorization in which activists use language to
identify problems, express grievances, assign blame, suggest cause-and-effect
relationships, propose solutions, and act as signifying agents (Benford and
Snow 2000; Oliver and Johnston 2000; Weber et al. 2013). Activists and
entrepreneurs construct and deploy strategic frames to inuence public opin-
ion, reshape broader cultural logics, and apply pressure to policymakers.
Activists attempting to develop support for market institutions will target
parts of the state that are most likely to be sympathetic to their cause. The
structure of the state (federal versus unitary or open versus closed) shapes the
number and type of opportunities available to social movement organizations
and social movement-like entrepreneurs. For example, an open federalist state
is fragmented functionally and spatially, with multiple levels and centers,
creating opportunities for movement activists to win support for a market
(or any other institution-building project) at one level, even while that same
As Sarah Quinn (2008) notes in her study of the secondary market for the life insurance market,
if institutions act like lenses that lter, focus, and direct different cultural strands and direct and
refract otherwise diffuse cultural logics,then market activists use strategic frames to extend and
transform these institutionalized logics(797).
Making the Medical Marijuana Market
market or project is prohibited at another level (Schneiberg and Soule 2005).
Open institutional systems provide endless opportunities for protracted con-
ict and the development of parallel contradictory institutions (Campbell and
Lindberg 1990; Djelic and Quack 2007; Purdy and Gray 2009). Thus, even if
social movement activists and market pioneers are able to resolve the disson-
ance inherent in an ambivalent market interface by legalizing that market at
one level of the state, they may create a new form of ambivalence between
institutional regimes supported by different levels or parts of the state.
In the remainder of this chapter, I will draw upon interviews with activists
and entrepreneurs who helped found, legitimize, and legalize the rst medical
marijuana markets in California, as well as recent histories, journalistic
accounts, and memoirs describing the emergence of the medical marijuana
industry in order to show how marijuana became medical in the contempor-
ary United States. In 2012, I interviewed sixteen market activists, entrepre-
neurs, and lawyers identied by the news media and various movement
histories as inuential actors in the development of the medical marijuana
market in California, including the founder of one of the statesrst medical
marijuana buyersclubs and the author of the statesrst medical marijuana
initiative (see Table 9.1 for a list of interview respondents). Most respondents
names are replaced by pseudonyms in Table 9.1, however, the interview
respondents quoted in the following section have agreed to use their real
The AIDS Crisis: Creating an Opening
The AIDS epidemic rocked the United States during the 1980s and early 1990s,
with over 500,000 reported cases and 300,000 deaths between 1980 and 1995
(amfAR 2016). AIDS was initially described as gay cancerdue to the diseases
predominance in the gay community. San Francisco, a self-proclaimed gay
mecca,was the epicenter of the crisis with nearly twice as many cases per
capita as New York City, the city with the second-highest incidence rate
(Kolata 1994). The widespread death and decimation that characterized the
epidemic devastated the city of San Francisco, creating sympathy for AIDS
patients and political and cultural opportunities for medical marijuana market
pioneers. Clint Werner, an activist and writer, describes the Castro district, the
historical heart of the San Francisco gay community, during the epidemic:
I landed here in San Francisco as a Deadhead, but Im also a gay man, and it was 1986,
which was really the beginning of the height of the peak of the AIDS epidemic ...If
you werentthereyoucant begin to imagine what it was like in the Castro in 1986. It
was a horror movie. It was like the show the Walking Dead [a television program
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about zombies] ...the look of the people, young people ...just emaciated, gaunt,
purple, their skin discolored, their faces had welts and lesions ...and just death,
death everywheredeathand suffering and misery and despair.
(Interview April 23, 2012)
The deadly nature of the crisis spurred individuals to take illegal, formerly
unthinkable actions. Legal sanctions paled in comparison with the wave of
death that was surging through the community. Reecting on the rise of
medical marijuana in San Francisco, Dennis Peron, an illegal marijuana dealer
and gay rights activist who is widely credited as the founder of one of the rst
medical marijuana buyersclubs in San Francisco, describes how the crisis
compelled patients and activists to break the law and pioneer a new market:
It had to happen here. It had to happen to persons affected by the
AIDS epidemic. It had to be someone who had nothing to lose(interview
May 18, 2012).
During this period, AIDS patients found that using marijuana helped miti-
gate the rapid weight loss associated with wasting syndrome, a complication
of the illness that made it hard for patients to maintain weight. Werner
describes nursing his close friend who was affected by wasting syndrome,
So I took him in and nursed him and took care of him ...I would make really
nutritious stews like one-pot meals ...and then Id get him high. Id give him three
or four bong hits and he would be like Arrg arrg.He would scarf all this food
down ...I mean there are drugs out there like compazine that will suppress your
nausea, but they dont give you the munchies, they dont make you really want to
eat, you still have to sort of force yourself to eat because you have the suppression
of the nausea. But cannabis is unique because it triggers that compulsion to
Table 9.1. Interview respondents
Respondent Description
Bill Marijuana grower
Quentin Dispensary founder
Amy Researcher/advocate
Clint Werner Activist/author
Wayne Justman Early medical marijuana patient/activist/dispensary founder
Arnie Marijuana activist
Jack Marijuana activist
Dean Member of marijuana club
Charlie Member of marijuana club
Barrie Patient advocate
Dennis Peron Market pioneer
Deborah Early medical marijuana patient; founder of medical marijuana co-op
Norm Executive director of medical marijuana dispensary
Ron Marijuana lawyer
Ken Marijuana lawyer
David Marijuana lawyer
Making the Medical Marijuana Market
ehhh[makes gesture like shoveling food in mouth]...and so he would eat and
people would eat and not waste away as quickly.
(Interview April 23, 2012)
By 1993 over 28,000 San Francisco residents were living with AIDS, represent-
ing approximately 4 percent of the citys population (Kolata 1994). Moreover,
many AIDS patients were politically active and socially embedded in a commu-
nity integrated by decades of organizing and activism, creating local solidarity
with and sympathy for patients (Armstrong 2002). Wayne Justman, an early
volunteer at Peronsrst medical marijuana club, describes local awareness of
and support for AIDS patients: San Francisco was receptive to this [medical
marijuana], but then again who the hell didnt see somebody that they didnt
know in church or in their community, a friend, who had not acquired AIDS or
was HIV positive(interview April 30, 2012). Werner echoes this sentiment:
jurors are drawn from the voter rolls, and theres no way they could seat a jury
who was going to convict a man who was selling marijuana to AIDS and cancer
patients(interview April 23, 2012).
In contrast, the federal government actively obstructed the use of medical
marijuana by AIDS patients. Prior to the start of the AIDS epidemic, the federal
government was forced by the courts to create a small medical marijuana
program in response to a lawsuit by Robert Randall, a glaucoma patient who
used marijuana to relieve eye pressure. Randall sued the government in 1976
and settled, leading to the creation of the Compassionate Investigational New
Drug (IND) program, which provided government-grown marijuana to ser-
iously ill patients.
When AIDS patients discovered that marijuana helped
alleviate some of the complications of the disease in the late 1980s and early
1990s, Randall created the Marijuana AIDS Research Service, an organization
to help AIDS patients navigate the process of applying to the IND program
(Randall 1991; Randall and OLeary 1998). Soon afterwards, the number of
applications by AIDS patients to the IND program surged, leading the federal
government to stop accepting new applicants in 1991. Dr. James Mason, the
United States Assistant Secretary for Health, gave the following explanation
for the programs demise: If its perceived that the Public Health Service is
going around giving marijuana to folks, there would be a perception that
this stuff cant be so bad. It gives a bad signal ...theres not a shred of evidence
that smoking marijuana assists a person with AIDS(Isikoff 1991: A14;
Werner 2001).
The IND program, supervised by the Food and Drug Administration, was a federal program that
would grow marijuana and send pre-rolled marijuana cigarettes (joints) every month to
approximately fteen patients suffering from serious illnesses such as multiple sclerosis and
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Thus, the AIDS crisis did not lead to the displacement of old institutions
prohibiting marijuana for medical use. It initially did just the opposite, lead-
ing the federal government to reify its prohibitory stance and shut down the
IND program that could have legally provided marijuana to AIDS patients.
Unable to gain access to marijuana through state-authorized channels, AIDS
patients were pushed to the illegal market, where medical marijuana activists
and pioneers developed informal institutions to distribute marijuana for med-
ical use, creating an interface between the illegal market for marijuana and the
legitimate needs of AIDS patients.
The BuyersClub: Building an Interface
In 1991, Dennis Peron started one of the rst openly operating medical mari-
juana buyersclubsin the United States, dispensing marijuana to AIDS
patients in San Francisco. Peron had sold recreational marijuana in the illegal
market for decades, most notably maintaining a speakeasy-type shop over a
restaurant in San Franciscos Castro district during the 1970s. Peron had long
been an activist promoting the legalization of marijuana for recreational
use and had sponsored a pro-marijuana ballot initiative with legendary San
Francisco supervisor and gay rights activist Harvey Milk in 1978. Peron pursued
medical marijuana legalization after his partner died of AIDS in 1990. Peron
explains: So when my lover died ...I set upon a path ...for people like him.
He had suffered so much and marijuana helped him so much. It was my
personal eulogy for him. And it was for the world, but it was to him(interview
May 18, 2012).
The creation of a medical marijuana market for AIDS patients required an
interface between the illegal market for marijuana and the law-abiding AIDS
patients who did not have the illicit connections to purchase it. Prior to selling
medical marijuana, Peron sold recreational marijuana through interpersonal
networks. To avoid the consequences of taking part in an illegal act, Peron
would only sell marijuana to a new customer in the illegal market if an
existing customer vouched for them. Once Peron started providing marijuana
to AIDS patients, he had to create informal market institutions in order to sell
to patients whom he did not know through his interpersonal networks. Peron
describes this shift from networks to informal institutions:
I sold black market pot, you know, if I knew you and you had been referred, it
would be alright, I would sell to you. But I remember the rst time I sold to
As of January 2016, federal prohibition of marijuana remains in place, and the Food and Drug
Administration still maintains that marijuana has no accepted medical use.
Making the Medical Marijuana Market
someone I didnt know at all. He had a little piece of paper that said, I have AIDS.
I signed him up and think [to myself], Im setting on a path I had never been on
before, selling to strangers at the house.I had never done that before. I did it fully
expecting to get busted.
(Interview May 18, 2012)
Peron moved from the safer system of personal networks, where he would sell
marijuana to a customer if they were a friend-of-a-friend, to a riskier informal
institution, where a persons claim to illness, in this case AIDS, granted them
the right to purchase marijuana without an interpersonal connection. While
the state continued to prohibit and prosecute the exchange of medical mari-
juana, effectively obstructing formal market institutions, Peron and other
market pioneers created an informal system in which patients gained access
to the market, not based on who they knew (networks) or the support of the
law (formal institutions), but through a moral claim to purchase marijuana
based on physical inrmity.
Medical marijuana markets that were prohibited by the state, but socially
legitimate, gave way to a work-aroundsystem, in which doctors would write a
recommendationrather than a Food and Drug Administration-required pre-
scription in order to bypass the law. This system would lay the groundwork for a
quasi-legal recommendation program that became the basis for patient access
in state-legal marijuana markets.
Perons pioneering efforts created not only an
informal set of rules guiding exchange but also a new organizational form, the
medical marijuana buyersclub, to distribute marijuana to AIDS patients.
Peronsrst retail store, the San Francisco Cannabis BuyersClub, borrowed
from two contemporaneous organizational forms: illegal clubs for buying
experimental antiretrovirals in San Francisco and New York and marijuana
coffee shops in Amsterdam.
In the late 1980s and early 1990s, AIDS patients, doctors, and nurses organ-
ized buyersclubs,where club members illegally imported experimental
antiretroviral drugs from other countries without the approval of the Food
and Drug Administration. These organizations enabled patients to test the
efcacy and dosing of different experimental drugs without waiting for the
lengthy federal approval process (Lindemann 1994; Epstein 1995). Werner
describes how these buyersclubs functioned:
So what happened was gay men ...werent going to sit by and just die. So people
started researching drugs that werent approved for use and drugs in other coun-
tries that were approved for other things that might have anti-viral activity and
might be used ...then they would smuggle them in from other countries or would
In todays medical marijuana markets, marijuana providers can sell marijuana legally under
state law to patients only if the patient presents a doctors recommendation.
Cyrus Dioun
nd ways to buy them ...This was part of what was so incredible about it, they
would bring in these drugs and they would smuggle them in, they would research
and nd them and they would write up ...what the effects were, what people were
using for dosages.
(Interview April 23, 2012)
Just as AIDS patients illegally smuggled antiretroviral therapies from other
countries for off-label use, an illegal but legitimate act, the rst medical
marijuana buyersclubsmodeled on these self-organized, antiretroviral buy-
ersclubscreated an interface between the illegal product and the legitimate
needs of dying patients.
The medical marijuana buyersclubs were more than just a distribution
channel, they were also a value-rational community center dedicated to help-
ing AIDS patients in a variety of ways. They provided marijuana to the
seriously ill and also helped give patients purpose and bring them out of
isolation. Feldman and Mandels (1998: 181) ethnography of Perons club
conducted in 1996 depicts this scene:
Perons concept was to provide not only a cafeteria of cannabis productsincluding
marijuana of varying potencies, cannabis pastries, and smoking paraphernaliabut
to create a life space where persons with life-threatening or seriously debilitating
diseases could gather, relax, and consume their medications in an accepting,
friendly, and colorful surrounding. Some critics referred to Dennisplace as a
circus,but considering that it was both staffed and utilized by sick and dying
people, more sensitive observers might conclude that he had created a therapeutic
atmosphere that encouraged relaxation, friendly interaction, laughter and healing.
Justman, the security guard at Perons buyersclub, describes Perons value-
rational hiring practices:
Dennis asked me ...when you try to hire and replace, give people that are HIV
positive the rst shot. He wanted to let them have something to do in life. Get
them out of the hotel. Get them out of the negative ...and it was really wonderful.
A lot of people pushed people with HIV/AIDS away ...We wanted to help people
with HIV/AIDS.
(Interview April 30, 2012)
The clubs value-rational ethos not only shaped hiring practices but also
inuenced pricing decisions. Justman describes how the club tried to cater
to the poor and indigent:
Most of the people [we served] were very low income. Tenement housing clinics ...
We didnt have people drive up, get out, and come inand buy a hundred fty dollars
[of marijuana]. We had people come up and get a three dollar bagor if they didntdo
that we would be giving them [marijuana].
(Interview April 30, 2012)
Making the Medical Marijuana Market
Movement activists and socially minded entrepreneurs affected by the epi-
demic created a new informal institution, the marijuana buyersclub, to build
an interface between the illegal market for marijuana and the needs of dying
AIDS patients. This change not only transformed the criteria for how one
became socially qualied to purchase marijuanashifting from interpersonal
networks to medical necessityand created a new organizational form (the
marijuana buyersclub), but also affected the underlying logic of the market,
moving from a market that was mainly driven by money to one that was also
driven by morals.
Framing the Market, Winning State Support
The creation of informal institutions, such as buyersclubs, helped create a
path and a place for the distribution of marijuana to the seriously ill during the
AIDS epidemic, but the small medical marijuana market that developed in San
Francisco would have been ephemeral without state backing. In this regard
the medical marijuana market is no different from legal markets (Fligstein
2001). To create an enduring market, medical marijuana activists and entre-
preneurs targeted the state to win support for the market. While the AIDS
epidemic created a political and cultural opportunity in which much of the
public was sympathetic to AIDS patients using marijuana, government of-
cials by and large felt that legalizing marijuana for any use, medical or recre-
ational, was a political liability. Thus, activists and market pioneers turned to a
tool of citizen legislation, the ballot initiative, in order to win legal recognition
for medical marijuana.
Marijuana and AIDS activists spearheaded ballot initiatives authorizing the
medical use of marijuana, rst in San Francisco in 1991 and then in California
in 1996. In order to develop state support for medical marijuana laws, activists
abandoned the recreational intoxicant conception and recast marijuana as a
compassionate palliative for the dying. Peron, a self-described hippie,
explains that he consciously decided how to (and how not to) frame
To get the answer you want you got to ask the right questions, you got to frame it
right. So I framed it in such a way, marijuana is medicine that helps people [who
are] sick and dying ...As far as the potheads ...too much cultural baggage my
main thing was with senior citizens and doctors and nurses ...I realized I had to
In both the city of San Francisco and the state of California, citizens who collect enough
signatures can sponsor ballot initiatives that are voted on by the public, bypassing elected
representatives. If a ballot initiative is passed, it becomes law.
Cyrus Dioun
get away from the potheads. I already got their vote...they had so much
baggage that I couldnt carry them. Cultural baggage, long hair, whatever it
was. Im a hippie, but I had to, not renounce it, but I had to put it aside for the
greater goals.
(Interview May 18, 2012)
In contrast to the recreational intoxicant conception, the compassionate
palliative conception characterized marijuana as a medicine, not a narcotic,
and its users as patients, not criminals. Drawing on a framing initially pioneered
by Robert Randall in the 1970s, proponents of the compassionate palliative
conception described marijuana as a medicine that soothed the pain and
suffering of the seriously ill and dying. AIDS, cancer, multiple sclerosis, and
other serious and debilitating illnesses were cast as legitimate conditions that
justied patientsmarijuana use. The compassionate palliative conception not
only transformed marijuanasuse, but also reframed its intended administrator
and user, shifting from an image of drug dealers selling marijuana to long-haired
hippies to one of doctors recommending marijuana to senior citizens and
AIDS patients.
The compassionate palliative conception was integral to gaining public
support for ballot initiative Proposition P in San Francisco in 1991 and then
Proposition 215 in California in 1996. A poll of California voters conducted by
the National Center on Addiction and Substance Abuse weeks before the vote
on Proposition 215 showed that a majority of respondents polled would
support the ballot initiative only if it was framed using the compassionate
palliative conception (CASA 1996).
The compassionate palliative conception did not displace the recreational
intoxicant conception because it neither addressed nor disputed marijua-
nas use as an intoxicant. Rather, the compassionate palliative conception
carved out a legitimate medical use for those who deserved compassion: the
seriously ill and dying. Similarly, the rise of state-legal medical marijuana
markets did not displace prohibitory institutions at the federal level, but
rather led to the co-existence of contradictory institutions supported by
different parts of the state. Over the next twenty years, these contradictions
would intensify. By 2016, the California medical marijuana market had
grown to over 700,000 patients, with the number of patients using mari-
juana for serious illnesses such as AIDS, cancer, and multiple sclerosis
dwarfed by patients with less deadly chronic conditions such as pain,
anxiety, and insomnia (Reinarman et al. 2011; Marijuana Policy Project
2016). Moreover, in these two decades, laws authorizing the medical use
of marijuana spread to twenty-ve states, even as the federal government
maintained its classication of marijuana as a Schedule 1 narcotic with no
legitimate medical use.
Making the Medical Marijuana Market
In recent years, historical institutionalists have revisited the mechanisms
underlying sudden institutional transformation, often described as a punctu-
ated equilibrium model, in which an exogenous shock leads to the breakdown
of extant institutions that are then rapidly displaced by a new set of social
congurations (Mahoney and Rueschmeyer 2003; Streeck and Thelen 2005;
Mahoney and Thelen 2010). Scholars have elaborated upon and complicated
theories of institutional change by showing how an exogenous shock is often
assisted by endogenous actors who have the material, social, and symbolic
resources to help win support for one set of new institutional arrangements
over others (Deeg 2005).
The case of medical marijuana markets in the United States brings to light a
number of processes through which social movement activists and market
pioneers can leverage an exogenous shock to build social support for informal
institutions that create an ambivalent interface between the socially legitim-
ate and formally illegal. The deadly crisis forced entrepreneurs and activists
affected by the AIDS crisis to create a new, public interface, the medical
marijuana buyersclub, where they put themselves at risk of prosecution
and incarceration in order to supply the sick and dying with medicine. After
developing this informal institution, market pioneers and social movement
supporters partially legalized the market by deploying strategic frames that
resonated with the public and by targeting parts of the state that were more
responsive to public sentiment.
Although this exogenous shock led to the rapid displacement of institutions
preventing marijuanas medical use at the local and state level, prohibitory
institutions at the federal level remained unchanged. Thus, even as social
movement activists and marijuana entrepreneurs were able to resolve one
type of ambivalencethe construction of a socially legitimate but illegal
marketby passing ballot initiatives legalizing medical marijuana at the
local and state levels, their successes led to another type of ambivalence,
between local and state institutions that supported medical marijuana mar-
kets and federal institutions that prohibited them. In this case, institutional
transformation at the local level combined with federal intransigence created
a form of oppositional and contentious institutional layering, where institu-
tional entrepreneurs responded to a political opportunity at one level of the
state in a way that directly conicted with extant institutions at another level
of the state.
Once activists gained a foothold in one state, they were able to expand their
efforts incrementally to other states without the aid of an exogenous shock.
Even as federal incumbents continued to block changes to institutional con-
gurations from the top down, local and state activists and entrepreneurs
Cyrus Dioun
developed a $4.5 billion market from the bottom up. It is likely that this
diffusion process was slower than it would have been if the federal govern-
ment had supported (or at the very least, no longer opposed) medical mari-
juana markets.
Together, these ndings suggest that scholars of institutional change should
consider both unsettled times and unsettled places. An exogenous shock
even one with the global consequences of the AIDS epidemicwill not neces-
sarily have a uniform effect across geographies. San Francisco became the rst
city to pass a medical marijuana initiative in response to the AIDS epidemic, in
part, because its population had the highest incidence of AIDS, and because
the most affected population, gay men, had developed political and social
capital while ghting for gay rights and inclusion in preceding decades.
Scholars of institutional change should focus not only on the social geog-
raphy of institutional change, but also on the political geography, particularly
the opportunities inherent in the structure of the state. The multi-level and
multi-centric structure of an open, federalist state means that even when a
rupture leads to rapid discontinuous change at one level of government,
extant institutions at another level of government may slow the diffusion of
markets, moderating the pace of institutional change.
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Cyrus Dioun
... These political actions can sometimes create the conditions for new markets. Indeed, sometimes social movement organizations can, on occasion, turn into market actors who come to structure new markets [e.g. the market for medical marijuana in the USA (Dioun, 2017)]. Third, social movement organizations can directly attack incumbent firms in stable markets in order to get them to alter their strategies for making money. ...
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