re. >> you're watching an industry go from an underground -- what i like to call the "wild west days" -- into a respected, legal, licensed industry. >> there's endless business opportunities. it's like the internet boom. >> do you represent the new generation of cannabis entrepreneurs? >> this is america's new hot industry. >> so, it's always important to make sure that you have high-quality pot. >> with the medical marijuana, you take a hit of it, you're starting to feel, "okay, i hurt,

but i really don't care that i hurt." >> we know that the production of marijuana supports all the other drugs. it's tied into so many other crimes. >> police! search warrant! >> "yes" on 19 is a "yes" for personal liberty! "yes we cannabis"! >> there is nothing that any state or the federal government is going to be able to do to stand in the way of legalization of marijuana -- nothing. >> after more than 70 years as an illegal drug, could it be possible that marijuana's moment has arrived? medical-marijuana laws are already on the books in washington, d.c., and 15 states, and support for legalizing marijuana has never been greater. i'm trish regan. in the next hour, we'll take you inside a flourishing pot industry, one that's moved out of the shadows and into the mainstream of american life.

the story of america's ever-increasing acceptance of marijuana begins here in the colorado rockies, the newest front in the war over pot's future, where cannabis is meeting capitalism head on. >> we're gonna do a quiche today. quiche gives you a lot of options. >> once a month, at his downtown denver restaurant, chef scott durrah teaches a cooking class. >> turn that up there. >> it's well-attended -- mostly retired and affluent boomers. it's nice to see a lot of familiar faces in here. >> it's exactly the market durrah and his wife and business partner, wanda james, want to reach. >> what we're seeing, which is really interesting, are older people -- i would say over the age of 30 -- and definitely women. >> tons of women. >> women -- and these women are your mom, you know, your grandmother. i mean, these are women that you see, you know, at the post office, at the daycare center. >> remember -- it's quiche. so, you can add whatever you'd

like to your quiche. >> it's their new twist on classic cuisine that draws this crowd. the ingredients are common... >> we're gonna put a little sprinkle in there. >> ...except for one -- a colorado-grown herb. >> so, it's always important to make sure that you have high-quality pot. >> the secret ingredient? marijuana -- used only for medical purposes, of course, by those with a state license. >> so, right there alone, you have a pie which is actually pretty daggone strong. this is breakfast. >> pot is going mainstream. >> come over here, guy. give me love. give me love. >> and leading the way are people like scott and wanda. they're one of denver's power couples... >> kingston, come here. >> ...prominent in the local political and business scenes. he's a former marine. she's an ex-naval intelligence officer, a successful p.r. executive, and a top political fundraiser. in most places in america, they would be dope dealers. >> hey, mike, you did a phenomenal job on the logo design. >> in colorado, they are savvy

entrepreneurs in a fast-growing, state-sanctioned industry, branding and marketing medical marijuana under their label, simply pure. >> it's all grown here. this is pure colorado bud. >> it's a new kind of company in an old industry, one that generates tens of billions of dollars a year in this country, most of it illegally. wanda and scott are taking the high road, using their business know-how to take america's most popular drug from the back alley to the corporate suite. do you represent, in a way, the new generation of cannabis entrepreneurs? >> definitely. when you look around this industry and the people who have come into the industry, there's lots of professional people. there are people who were laid off from corporate america. this is america's new hot industry. >> wanda took us to the heart of their operation -- a lush marijuana farm inside this temperature-controlled warehouse. a typical plant that's, you know, about this size...

>> mm-hmm. >> ...how many pounds of marijuana might that yield? >> most plants, on the average, will only yield about 2.5 ounces of marijuana. >> and an ounce retails for about...? >> the high-end weed would be anywhere from, you know, $300 to $450. >> and i want an 1/8 of the headband. >> even at those prices, medical marijuana is flying off the shelves. >> these oyster crackers are really popular, too. >> i'll take a gram of the hong kong. >> the choices are exotic. >> the maui waui i like. >> if you think choosing a bottle of wine is tough, good luck deciding between these. need help? just ask the pros, better known here as "budtenders." >> thc is gonna keep us up, active, alert, ease the pain. >> okay. >> and as long as you have a state medical-marijuana license, you can sample all you want. >> oh, the chocolates. [ chuckling ] whoa, these are so good. >> in tough times, medical marijuana is one industry that's putting people to work. thousands are growing, trimming,

testing, cooking, and selling the leafy green plant. >> it smells amazing. that's sold. >> you're looking at a time when the economy has basically been in the toilet -- real-estate brokers, contractors... >> insurance. >> ...city agencies, insurance companies, suppliers -- >> and yet people are still smoking pot. >> exactly. >> and it's all regulated, all taxed, and all legal, as far as the state is concerned. federal law says pot is illegal, but back in 2009, president obama directed the u.s. department of justice to defer to state laws regarding medical marijuana. this single memo turned 70 years of prohibition on its head. it advised u.s. attorneys in medical-marijuana states to not go after individuals who are "in compliance with state laws." [ indistinct shouting ] the threat of raids by the drug enforcement administration seemed a thing of the past, and colorado's cannabis gold rush

took off. suddenly, people applied for medical-marijuana licenses in droves. the number of dispensaries jumped from about a dozen to more than 1,000 across the state, outnumbering starbucks 5-1. you can buy pot next to a pizzeria, an auto repair shop, inside a medical office building -- too close to home for some parents, like eric and stacey howell. >> you know, you don't want it invading your household, let alone your neighborhood, let alone your state. >> [ laughs ] >> ♪ ring around the rosie >> howell is an elementary-school teacher and a mother of three. >> as a parent, drugs are always in the back of your mind, from the minute your child is born. so, what goes in the middle? >> she supports the use of medical marijuana by those who are seriously ill but believes the state's embrace of pot is a threat to her children. >> how am i going to teach my kid that it's still an illegal drug? federally, it's still illegal.

you can't use it, even though the state of colorado says, "yes, you can, from a medical standpoint." they are making quite a bit of money, and it is a big tax revenue, but at whose expense? >> one of the big fears that i keep hearing over and over again is, "what kind of signal are we sending to our young people?" >> what kind of signal does it send to your children when you have a fully stocked refrigerator with coors light or with, you know, budweiser in it, and then the campaigns that are behind those alcohol products have the half-naked women? i mean, what kind of signal is that? we're not talking about some reggae concert or you being stoned in your dorm room. we're talking about a whole emerging business here, with responsible people. >> people like 23-year-old samantha sandt. >> how have you been? >> great. how have you been? >> she jumped at the chance to get in on the ground floor of the pot boom, selling seeds. >> we have a new strain out for you. we're a new enterprise. there's endless business opportunities. it's -- you know, it's like the

internet boom. the waipi'o hapa is a shorter plant... >> equipped with a business degree, sandt's first job out of college is with the centennial seed company. the seeds aren't cheap. they retail for $70 to $100 a dozen. >> so, we're gonna do one roughneck and two waipi'o today? >> that'd be great. >> well, we have close to 100 retailers in under six months. we keep receiving calls day in and day out of more people interested in seed. there you go. >> great. and there you go. >> but just as colorado's pot business took on an air of legitimacy and began thriving, the federal government fired a warning shot aimed right at this man -- chris bartkowicz. bartkowicz had been cultivating for years, long before medical marijuana was legal. >> this plant is sour diesel. it's been rated in magazines as a "10 out of 10" for growing, for medicine. >> he says he wanted nothing more than to go aboveground and become licensed and legitimate. >> you don't see back-alley deals with alcohol, but you do see them with marijuana.

if it was legalized, taxed, and government-regulated, we wouldn't have problems like this. i wouldn't be facing life in prison. >> that's right -- life in prison, done in by his own audacity. bartkowicz was just another pot grower when a local tv station asked for an interview. he agreed and proudly showed off the goods in his basement. >> i don't think the average person realizes how close to their front door it is. >> it was a sensational story with a dramatic ending. the d.e.a. raided bartkowicz's grow and arrested him. >> if you go on the news and you show this marijuana grow and you tell me what house it's in, what am i left to do? >> special agent jeff sweetin was in charge of the case. >> ...violation of federal law, clear and simple. >> but not so clear and simple to bartkowicz, who'd put his faith in that justice department memo, which said the feds would not enforce a crackdown. he was charged with possession of more than 100 marijuana plants, with intent to

manufacture and distribute. >> i was state-compliant. i had no fear. i was not worried about the feds coming. >> but you knew you were in violation of federal law. >> not according to the memo, i wasn't. no state charges have been levied against me, and no state investigation was conducted. why would i even have a hint of fear of the federal government? >> with a prior drug conviction, bartkowicz was looking at 40 years to life. he pled guilty and is now serving five years in federal prison. with so many medical-marijuana businesses here breaking federal law, bartkowicz's story sounded the alarm. but wanda and scott are taking their chances. doesn't it make you a little bit nervous that you could potentially face jail time? >> the federal government has been very, very clear in its guidelines that if you are operating under the guise of your state regulations, that it's supposed to be a hands-off

scenario, which is why we feel confident to be able to do this industry and not fear, every morning when we wake up, being arrested for this. >> come here, brooklyn. >> if wanda james is taking a risk, so are the doctors who recommend medical marijuana. coming up next... >> take this with your i.d... >> ...inside a cannabis clinic. is he healing sick patients... >> open wide and say, "ah." >> ah. >> ...or just giving potheads permission to get stoned? >> one, two, three... >> cannabis. >> aiding or abetting? >> cannabis. >> aiding or abetting? when "marijuana usa" continues.

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>> take this with your i.d. and head into room number 2, where it says... >> in a busy clinic near denver... >> thank you. >> ...a steady stream of patients files in to see a very popular doctor. >> how you doing? have a seat there. >> they fill out a detailed

questionnaire, and then james boland, m.d., gives each one a routine physical. >> now watch the fingers. watch them go over there. >> it looks like any other medical practice... >> open wide and say, "ahh." >> ahh. >> ...with the usual mix of complaints. >> severe pain from my right knee. i've had two surgeries. >> psoriasis. >> oh, boy. yeah. >> the headaches keep me from work... >> but here's the difference -- in this office, doctor's orders almost always include marijuana. >> don't smoke the medication. we suggest you use a vaporizer. >> with new ways to take the drug, like through a vaporizer, marijuana has been re-branded as a natural herbal therapy packed with healing power. >> the patient has had longstanding lower-back discomfort. >> after 25 years as a physician, boland is now sold on the medical benefits of pot. how long have you believed in marijuana as something that can combat pain? >> probably about two or three years. it wasn't until i came upon some

occupational-medicine patients that had just absolutely intractable back pain. and lo and behold, they said it helped them. their requests for increasing doses of narcotics started to level off. you got any funny feeling, tingling in the fingers when i do that? >> doctors can't prescribe marijuana because it's classified as a schedule 1 drug, like lsd. but they can recommend it, and for patients, that's the key to getting a medical-marijuana license. >> and that'll be $130. >> it's a profitable business. boland and the team here at relaxed clarity have brought in more than $1 million in just their first year. >> free optional high five. >> [ chuckles ] >> congratulations. >> thank you. >> they've given some 10,000 patients the go-ahead to buy pot. >> i want you to look at the camera, and i want you to say, "cannabis." one, two, three... >> cannabis. >> what happens once everybody gets their recommendation? what do you do then? >> well, that's the beautiful thing about this program, from a business perspective -- everybody renews every year. and they have to get the same

re-evaluation that they did initially. >> oh, so you're gonna have a steady clientele potentially for years. >> that's correct. it's just like getting a haircut. a month or so from now, you're gonna need another one. [ both laugh ] go make us proud, and we'll see you next year. >> well, thank you. >> critics call it "medical excuse marijuana"... >> try the strawberry cough. >> yeah? >> ...and say it's just a convenient cover for stoners. some people say you're running a prescription mill. >> i would dispute that characterization. we examine every patient. we look at medical records when we can get them. i apply the same observation, the same rationale that i would in any decision that i would make, medically. >> during our visits to the clinic, we noticed that boland signed off on nearly everyone who walked through the door. >> okay. >> we saw just one patient get rejected. >> who was your orthopedic doctor? do you remember? >> [ sighs ] god, i do not remember. >> the state's pretty strict about making sure that we have some real hard, fast, specific findings... >> do you ever get people in here that you clearly know just

want this for recreational purposes? >> yes, we do, and we deny those people. i should write a book one day about some of the things that i've seen. >> i mean, will they be that blatant? will they say, you know, "hey, doc, i need a recommendation for this? come on. just give it to me." >> yes, there have been a few people that have come in saying that, or somebody who says, "i have back pain," or, "my knees hurt," and then they make this aerobatic pirouette up onto the exam table. >> if you have any other questions... >> some may dismiss the legitimacy of medical marijuana, but patients like scott snouffer do not. he's been living with a rare blood disorder. recent surgeries and infections related to the disease have left him with a distended abdomen and in severe pain. >> what kind of pain pills were they giving you? >> vicodin, oxycontin. morphine at one time i had had, liquid morphine that they had given me that was very strong, but worked for like a half an hour, and then it would wear off. >> so, these weren't helping you with your pain? >> they weren't helping me.

they weren't helping long-term. i'd feel good for about an hour. then i'd start hurting again. and then when the two hours came, i was like, "i got to have more. i need some more." and i was starting to get scared that i was getting addicted, but i was also just scared because i was in pain 24/7. >> when that became unbearable, snouffer decided to look for relief at the end of a pipe. has it helped? >> it's helped greatly. and with the medical marijuana, you take a hit of it, and within anywhere from 10 seconds to 5 minutes, you're starting to feel, "okay, i hurt, but i really don't care that i hurt. it's not that big of a deal." >> hut! >> aah! >> snouffer now takes fewer pain pills, and he can do some things he couldn't do before... [ indistinct shouting ] ...like cheering on his son quinton. quinton and his brother, easton, say marijuana has helped their dad. >> hey, dude. >> sorry! [ both laugh ] >> he's more with it.

he knows what's going on. and we can talk to him now. >> yeah. >> he finishes his sentences. >> so your dad's more like your dad? >> yeah. >> yeah. he's back. >> it's stories like these, advocates say, that make the case for medical marijuana. but among scientists, it's much more controversial. >> i am actually very excited about the components to marijuana as potential medicines, but it has to be data-driven. it can't be anecdote. >> meg haney, a professor at columbia medical school, directs a marijuana research lab. she says the jury is still out. so many people swear by marijuana. they say this is the best medicine for them. >> clearly, i have empathy for people who are suffering, and i understand that, for them, marijuana is quite effective. but there's a process within the f.d.a. in which we compare a drug to a placebo and we determine that it works. so people who say marijuana's gonna be effective where there

is no evidence makes me very uncomfortable. >> and i want you to mark on this line... >> but some researchers have seen strong potential for treating neuropathic pain and muscle spasms. while haney recognizes the drug's medicinal promise, she warns of the small but real risk of dependency and the harmful effects smoking has on the lungs. she cautions against its widespread use as a cure-all. marijuana has essentially been re-branded as the new herbal medication. do you buy into that at all? >> well, actually [chuckles] herbal medications also make me uncomfortable because they also are absent in data. so what people don't realize is that the scientific investigation of cannabinoids is really very young. we don't really know enough -- under very carefully controlled conditions -- the potential medical benefits. large-scale clinical evidence is years away. >> inhale for five seconds. >> research has been hindered, advocates say, by federal restrictions. >> and how much pain are you in right now?

>> breath here. >> in the meantime, boland and the 1,200 or so physicians in colorado recommending marijuana are in unchartered territory, caught between conflicting state and federal laws. >> all right. thank you very much. >> be safe, now. >> you're in this real kind of no-man's-land where there's some regulation, but not a lot of regulation. and the medical community doesn't thoroughly recognize this. >> you're definitely walking a little bit of a tightrope and sailing between a lot of reefs by doing this, yes. but there are a lot of patients for whom this is the last best hope for a quality life. >> whether medical marijuana is real or a ruse, it has taken root across the country. but some states are having no part of it. >> i look out west, and my fear is -- if we ever give up any ground, are we gonna be battling that here in kentucky? are we gonna be running gun battles over marijuana?

>> a trek to appalachia, when battles over marijuana? >> a trek to appalachia, when "marijuana usa" returns.

[ helicopter blades whirring ] >> this is cannabis country. down below, hidden in the wilderness of kentucky's appalachian mountains, are gardens of marijuana worth at least $1 billion, all of it illegal. there may be a growing acceptance of marijuana across the country, but not here in kentucky, where a small army refuses to go down without a fight. >> they went up through there, didn't they?

>> i'd say this is probably it for us. >> lieutenant brent roper is the commander of kentucky's marijuana strike force. during the busy summer months, he leads 120 men and women from state and federal agencies. as they hike up and down plunging hills, they work in 95-degree heat and extreme humidity, combating the relentless onslaught of weed. >> we have a pill problem, a meth problem. we've got other drug problems, just like everybody else does. >> mm-hmm. >> but ours in kentucky have one thing all in common, and that is marijuana is supporting all these other drugs because it is the most profitable. when you're getting $3,000 a pound for marijuana... >> there's an incentive to grow it. >> ...now you see where the money's at. >> lieutenant roper was raised in eastern kentucky and knows that pot has always been part of the culture here. >> traditionally, it has always been, you know, the cash crop in kentucky.

it was probably easier to get than a pack of cigarettes. >> the federal campaign against marijuana began 40 years ago, and the results, at best, are questionable. cultivation has spread to all 50 states, and the u.s. is now among the world's leading producers of pot. kentucky's marijuana production is estimated to be worth at least three times the value of its tobacco crop. and so far, demand for the plant has outstripped the ability of law enforcement to snuff it out, but they try. their mission starts up here, as hawk-eyed spotters in d.e.a. choppers scour the ground below. >> yeah, there's one right here under us, right in here. >> typical plots used to have as many as 1,000 plants, but those are too easy to spot from the air. now growers have as few as five

plants in many more plots, which helps them avoid detection... sometimes. >> ah, there's some right under us, on the right. >> okay. >> if they haven't started budding yet, we'll do this -- chop it up in as many pieces as we can, make sure the root system's gone, toss it out through here. >> growers can and do resort to violence to protect their crop. many use firearms, explosives, and booby traps. these nail-studded boards are intended to pierce the feet of intruders. >> see? they've been covered up with leaves. >> how do you figure out who the marijuana belongs to? >> time and effort. you know, local law enforcement hears, "well, so-and-so, we've heard, may be growing some marijuana in this particular area." and then it's just a lot of man-hours dedicated to going in, doing surveillance. >> a cornerstone of kentucky's "get tough" strategy is a federal initiative to arrest,

convict, and punish the biggest growers and discourage the rest. >> i mean, there's always gonna be somebody out there who's gonna take the risk to try to grow it. what we want to do is get to a point where the risk, you know, is outweighed by the consequences of what happens if you get caught. >> with jobs disappearing in the coal-mining and tobacco industries and one out of five people here living below the poverty line, there are those willing to take that risk. for john, who asked that we use only his first name, life hasn't been easy. >> there's just nothing -- you can't make money on tobacco. you can't make money on anything. >> to get by, he raises goats and lives off his land -- hardly the life of a drug kingpin. but in 2010, he was one of more than 900 marijuana growers arrested by lieutenant roper's team. >> they got me on the ground, and the one was standing on my

head, with an ar-15 automatic assault rifle pointed at my head. >> he was charged with cultivating 150 marijuana plants, a federal offense that carries a sentence of 5 to 40 years in prison, something he says he didn't consider when he threw down some marijuana seeds. >> all the factories are shutting down and moving, so if you wanted to make any type of a living at all, it's really the only way, and the demand is so incredible. >> he pled guilty to growing 30 plants. after 90 days in jail and a hefty fine, john says he'll never grow marijuana again. but there are others to take his place. >> is it realistic to think that you ever get rid of marijuana completely in kentucky? there's no way. >> so the kentucky mission continues, with no end in sight.

in this steep and rugged terrain, some plots are virtually inaccessible. >> clear on your left, sir. >> clear to throw ropes. >> helicopters transport state troopers to rappel into the tiniest gardens in the most remote spots. >> then right here's some more. >> they burn through fuel and money. the air-and-ground campaign together costs $1.4 million a year. how many plants is that? >> seven. >> seven? it's now the end of the harvest season here in eastern kentucky, and authorities are wrapping up their search-and-destroy campaign. they've actually confiscated less marijuana this year, but they say that's not a sign of failure, but rather proof that the state's zero-tolerance policy actually works. how can it be a success if you're cutting fewer plants? >> you know, in the early '90s, if you're cutting a million plants but you're only getting maybe 30% of it, you know, it's

a start. where we've progressed to in 2010 is we're cutting, you know, 250,000 to 350,000 plants. the snapshot is we're probably getting around 60% of what the plant count is here. >> by the end of the 2010 season, roper's team destroyed more than $600 million worth of marijuana. and he vows that kentucky will be the last state ever to legalize pot as just another taxable commodity. >> why would anybody ever consider that legalizing one more drug -- especially one that we're winning -- why would you ever consider that just for money? because in the end, you're gonna lose. you'll lose. >> and that's the fear -- that legalizing pot would lead to more people smoking, more crime, and more dangerous drugs. or would it?

>> you go to many places like this, where people are smoking in the street and the police don't say nothing, and i think it's a good policy. >> when we come back, a trip overseas to the most permissive pot culture in the world. and, no, it's not amsterdam. that's next, when and, no, it's not amsterdam. that's next, when "marijuana usa" returns.

>> along the streets of lisbon, the monuments and cathedrals date back centuries. portugal is a country steeped in tradition and also home to an unlikely policy designed to

address a modern drug crisis. in 2001, portugal became the first country in the world to fully decriminalize the possession of all drugs. do this in a public square in the u.s., and you could wind up in handcuffs. here, it barely raises an eyebrow. >> you go to many places like this in lisbon, especially at night, where people are smoking in the street and the police don't say nothing, and i think it's a good policy. >> in portugal, you can smoke pot, shoot up with heroin, or use cocaine, and your punishment is no more severe than a traffic ticket. joao goulao directs portugal's drug policy and is the chief architect of this strategy. you took a very innovative, very aggressive, and -- a lot of people would say -- very risky step.

this policy came out of the trauma the country experienced in the 1990s, when it was ravaged by a drug epidemic. in this small nation, as many as one out of 100 people were addicted to heroin. in this notorious drug ghetto, thousands of users bought and sold heroin openly every day. but rather than strengthen their drug laws, the portuguese chose to relax them. i know a lot of people that are watching this show right now are probably thinking, "they decriminalized all drugs. are they crazy?" dr. goulao says drug addiction is a disease just like any other -- not a matter of weakness, but biology.

still, there's a difference between eating too many cupcakes and shooting yourself with heroin. >> yes, but... >> here, instead of going to jail, anyone caught with drugs meets with a panel led by a street-smart counselor like nuno capaz... >> [ speaking portuguese ] >> ...who encourages users to get treatment. >> in portugal, if you want to get treatment, it's possible to do it for free. >> why do i, as a taxpayer, want to pay for your heroin use or his cocaine use or her marijuana use? >> if a person needs to be imprisoned because he committed some crime, it will also be your tax money that will be used to imprison that person. and i think it's better to pay for people to get treatment and eventually be socially productive again than to put them in jail. >> since the reforms took place, portugal has seen a decline in the number of teens using marijuana and almost every other category of drugs, especially

among the vulnerable 15-to-19-year-old age group. we saw it firsthand at this club scene in lisbon. so, have you ever used hashish? >> no. >> no, no, never. >> never used it. >> why not? >> it's bad for us. >> it's bad for you. >> today, portugal's relaxed approach to pot is met with surprisingly little drama. but critics doubt its success and believe it would never work here at home. gil kerlikowske, the u.s. drug czar, is flatly opposed to legalizing pot. if marijuana were to become legal, do we run the risk that young people would start down a slippery slope? >> we know that if an illegal substance becomes legal, it becomes more widely available. i've seen the devastation that drugs, including marijuana, can cause in neighborhoods with young people. and i think we need to be smart about how we handle it. i think we need to be as least punitive as possible. but i don't think we want to see

it legalized at all. >> recent findings from the national institute on drug abuse show a rise in marijuana use among american teens, with one in three high-school seniors reporting that they'd used pot within the previous year. >> "yes" on 19. >> on the street, the debate rages. >> that's "yes" on 19, november 2nd! >> in california, the birthplace of america's marijuana movement, there's a push to become the first state to legalize pot beyond medical use, to recreational use. >> so, do you think we can count on you to vote "yes" on proposition 19 tomorrow? >> on the 2010 ballot, the effort was called proposition 19, an historic campaign led by a successful pot entrepreneur named richard lee. >> 'cause one plant's illegal under federal law... >> lee wrote the measure, which proposed that any resident over the age of 21 be allowed to grow, possess, and use small amounts of pot for any reason.

>> why let one more genie out of the bottle? you've already legalized alcohol. >> alcohol prohibition didn't work, and cannabis prohibition isn't working, either. it's hypocritical, unfair, and unjust to lock up people for cannabis while we not only have booze legal, but advertised like soda pop. >> in oakland, richard lee runs his cannabis college, called oaksterdam university. here, students learn the best techniques for growing and selling marijuana. >> if you're growing in a space this size or even double this size, you're not gonna need more than two lights. >> california may be pushing the boundaries, but some, like senator dianne feinstein, are saying, "enough." >> the last thing we need to do is make it easier for drug dealers to increase their consumer base by pushing pot on young people. >> in the end, prop 19 went up in smoke. it failed by a 9% margin.

is this gonna end the chances of legalization of pot in california? >> no. i think the fact that we got the debate started and, you know, got people thinking about it seriously will help us win in 2012. >> the quest to legalize pot may have stalled, but the effort to legitimize it has not. when we come back, a look at marijuana's extreme makeover. >> what you're watching before your eyes in the united states is an industry emerging out of the shadows. >> that's next, in the the shadows. >> that's next, in the conclusion of "marijuana usa."

>> across colorado, they are springing up like weeds -- pot gardens like this one, owned by scott durrah, one of a growing breed of entrepreneurs finding their way through a thicket of conflicting rules in the state's fledgling medical-marijuana industry. staying out of trouble isn't so easy. >> i'm at the farm every day, you know, with our plants and everything. and every time someone does knock on the door, your mind goes back to that 'cause you don't know. >> police! search warrant! >> police department! search warrant! >> in early 2010, police raided a number of grows, including scott's. >> our first operation was

raided. and, you know, they went through our front window. and we were totally legitimate, and i was... >> he and his wife, wanda james, thought they had done everything by the book. no charges were filed, but the experience left them unsettled. >> it encompasses your life. all of a sudden, you know, you do have people probing in your background and asking you questions and this and that. >> well, i keep telling folks... >> to escape the legal limbo, these restaurant owners joined other pot entrepreneurs and lobbied for what most industries try to avoid -- to be taxed and regulated. >> okay, barb, would you tell me about your plants and your patient count? >> matt cook, with the colorado department of revenue, is the man charged with creating a blueprint for a state-taxed, for-profit marijuana industry. >> questions -- a lot of questions out there, huh? >> cook is a former law-enforcement officer who's put hundreds of people behind bars for growing and selling pot -- not exactly the first person you'd think of to help

legitimize the marijuana industry. >> ...where you intend to have any product, medicine at all. it's a huge pill for me to swallow because of where i come from. i'm gonna do what's right to ensure that we can regulate the industry. >> if he can't beat them, at least he can keep them in line. >> we can't issue a license till the local government's approved it. what's driving it is the need to get it under control, to ensure that the medicine that patients are receiving meets quality standards, and to ensure that the cartels and all the other bad guys out there aren't profiting from it. >> what started out as a few vague rules has now become a strict state code of regulation that goes further than any other jurisdiction in the country. >> you cannot have any felonies within the last 10 years. you have to be able to show years of your tax returns. >> everyone involved in the marijuana business -- even investors -- must be fully licensed, requiring rigorous

background checks and steep fees. >> those are both yours. >> okay. >> you're all set. >> wanda james and scott durrah have spent more than $25,000 on application fees alone. >> that was a very expensive -- it was a 26-page application that wanted everything from your high-school diploma to any divorce that you've ever had. >> the rules now specify precisely how much medical marijuana can be cultivated and sold. and the state will be keeping a close eye on the industry... literally. >> 16 cameras covering the entire area and the perimeter. >> every marijuana grow and retail facility is required to install 24-hour live cameras that feed directly to matt cook's enforcement office. he's tracing the money and the product from seed to retail. >> violators will be subject to

two kinds of actions. i can fine them up to $100,000. we can arrest them and make them go to court. >> do you ever just shake your head and say, "oh, my god, this is too much regulation"? >> every morning, every morning. but, you know, i got to tell you -- there's a sense of pride in which we go through this because we know that this is just the beginning. and we knew that this was gonna be difficult... >> even before the state stepped in, wanda james and scott durrah say they made quality control a top priority and had their marijuana tested at an independent lab called full spectrum. it's the first of its kind in colorado. bob winnicki, the company founder, tests a lot of pot. >> everyone thinks that we're a bunch of guys sitting around a table smoking pot and saying, "oh, this one's better than this one." >> [ laughs ] they're actually is a science to it. the chemists here analyze the bud for its medicinal and psychedelic effects. what happened to the days where someone said, "gee, this really makes me feel good"?

now suddenly they want it tested? >> you're watching an industry go from an underground -- what i like to call the "wild west days" -- into a respected, legal, licensed industry. not since you saw alcohol come out of prohibition has anything similar to this ever happened in this country. >> winnicki's scientific analysis has been crucial to scott and wanda as they roll out their new venture -- simply pure, a line of cannabis-infused edibles. what makes your products different from those marijuana brownies that someone had back in college? >> oh, boy. [ chuckles ] >> it's done in a professional kitchen. our consistency -- every time you have one of our products, they will affect you the same all the time. it's like going to starbucks. you know what you're gonna get every time you have one. >> colorado has come a long way from homemade brownies. and the rewards are pretty sweet. in just the first year since the boom, the state has collected more than $21 million through

sales tax and a host of licensing fees. >> the governor took $9 million out of the marijuana coffers and used the money to help balance the budget here in colorado. so we are now intrinsically a part of running this state. you can't take our money and then arrest us. >> fast-forward for me five years from now. where do you see this industry? >> i honestly believe in my heart and soul that there is nothing that any state or the federal government is going to be able to do to stand in the way of legalization of marijuana -- nothing. >> not so long ago, that prediction might have been laughable. but colorado's experiment is bringing us one step closer... >> comes to $217. >> ...to imagining what the legalization of marijuana might look like. i'm trish regan. thanks for watching.

>> coming up on "the suze orman show"... is homeownership still part of your american dream? i'm going to tell you why it is time to wake up. also... >> debt is obviously in the forefront, but, i mean -- >> let's stick on you, brian. i don't think debt's in the forefront. i thiyou are in the forefront 'cause your wife couldn't even talk about it. and you ask me, "can i afford it?" >> i want approval to buy myself a pair of slightly expensive diamond earrings. >> $7,000, in my book, is not "slightly expensive." hi, everybody. i'm suze orman, and you are watching "the suze orman show." tonight, i want all of yo