Blanco Says His $50 Million Medical Marijuana Trial Changed The War On Drugs

posted Friday June 13 ,2014 at 11:45AM CDT | 0 comments

Blanco Says His $50 Million Medical Marijuana Trial Changed The War On Drugs

Exclusive: Blanco details his rise from a high school drug dealer to a legit multimillion dollar businessman while fighting a federal case and continuing his musical career.

There are very few artists who can lay claim to a narrative outside of the studio as supremely compelling as Bay Area emcee, Blanco. Before shedding any light on his tenure in Hip Hop—which houses collaborations with Nipsey Hussle, YG, Redman and Styles P among others—the Berkeley, California native details the tempestuous journey himself and his older brother Slow have endured over the past decade fighting a saga of superlative distortion between federal jurisdictions and state powers.

Blanco’s biography begins as a teenager, a High School drug dealer. However things suited up at the age of 20 when Blanco and his brother-turned-business partner opened up the Compassionate Collective Of Alameda County (later changed to Compassionate Patients’ Cooperative Of California), a medical marijuana dispensary based in Hayward, Alameda County, California. At its peak, the duo grossed $26 million in profits. However, in October of 2007, they were raided by the Federal Drug Enforcement Agency and booked on 23 counts. Despite paying sales and income tax on every dollar, being exposed to routine spot checks by the police and having a permit to dispense marijuana by County Sheriffs, the federal government shut down the dispensary and pursued legal action beginning at 15 years to life. Each.

Over the next six years, Blanco and Slow fought the federal government relentlessly. As Blanco goes on to explain, this whole journey is documented and detailed through his music. In the sphere of Hip Hop he has been steadily releasing projects for numerous years. His first solo album, American Psycho, was released through his own label Guerilla Entertainment in 2011, and he has since dropped collaborative efforts with Nipsey Hussle (“Raw”) and his latest, “One Hunnid,” with fellow Bay Area emcees The Jacka and Messy Marv. Looking forward, Blanco has projects in the works with DJ Burn One and YG, to name a few.

Blanco Details Founding The Compassionate Patients Co-Op Of California

 

HipHopDX: You started selling marijuana in High School and opened up a medical marijuana dispensary with your older brother, Slow, when you were 20. How did this rather professional transition transpire?

Blanco: Interesting question. It was a few things. It was a lot of ambition to begin with. I was young and impressionable, and that was an area that I knew well. Being from Berkeley, California it was always a progressive city, so I always had an edge on probably the rest of the people from a young age. I was so young, and I was so influenced by my older brother and other people. I was very educated at a young age on marijuana, the legalities of it, the new rulings in California and I had a passion. At the end of the day, I’ve seen what marijuana can do to help a lot of terminally ill people and sick people. So, how it transitioned into the business was I’m just kind of… I’ve always been, for lack of a better word, a hustler. So it transitioned to that because it was something that me and my brother could turn into something almost larger than life—which it happened to be.

DX: The dispensary was financially extremely successful. In 2004, your first year of operation, the dispensary generated $74,000. Two years later this rose to $26 million. Those are pretty impressive numbers. What were your initial reactions to such success?

Blanco: I was too caught up in it to even pay attention to my success. My drive was so competitive and so dedicated that I lost track of the numbers in a sense. Other people paid attention to the numbers. I cared more about running an extremely successful, reputable and precise business. That was my focus. I started the place when I was 20-years old, I wasn’t even allowed to drink alcohol; I was very young, and I was naïve. Bookkeeping, all those things and how to run an actual business that grosses $20 to 50 million a year, was above my head at the time. It was a learning curve. So those numbers are representing from when I was a beginner to where I got control of the business and understood it the right way. It’s more of the fact that I was so mentally involved in this thing that I couldn’t even pay attention to the numbers increasing that fast. I almost enjoyed the numbers increasing that fast, because whatever the number was, however many millions of dollars there were, I paid sales tax and income tax on every single penny. So the bigger the number, the more sales tax I paid, the more income tax I paid. I had a martyr-type complex. I felt like a martyr. At the end of the day, the larger the scale of the business, the more recognized the business was. So that’s what I took pride in. I thought that by paying three of four million dollars in sales tax every year and another million in income tax, plus employed 60 people, I thought I was changing history. I don’t know if the history books will write it that way, but being the first person ever to pay sales tax on marijuana in the history of medical marijuana makes me a pioneer, for sure. That’s what I focused on.

When people say, “Oh you grossed $26 million,” I just say, “Well two million of that is sales tax. Another million of that was income tax.” And I—the local business owner or cooperative member—put that into our community. I put that back and exposed the financial value that marijuana has to this country. I mean, I was so young and stupid I said, “What I’m willing to do is throw myself under the bus to show what this can do to our country.” And since 2007—at the end of 2007 is when I was raided, arrested and indicted—the whole industry has changed. Now everything is about tax money. Now people use what I did as a business plan on how to go forward in the future…for the taxation and regulation of it. I opened up the first actual medical marijuana dispensary permit. Other places were allowed to operate, but I had the first one that was a medical marijuana dispensary that was permitted to dispense medical marijuana. This is as opposed to the city turning a blind eye. So I was still in touch with being innovative, competitive, and aggressive and being a martyr and being influential and making history that I wasn’t paying attention to the numbers. My ego is connected to how the business was, not necessarily viewed because everybody has their own point of view, but how it operated and what it was capable of.

I come from a total middle-class, nice part of Berkeley but at the end of the day my pops was in prison. My Mom was by herself. Me and my brother had to support ourselves and the rest of our family. So in that we just said, “Me and you, we need to be able to get to a million dollars. We need to be able to generate a million dollars so that we have the capability of making choices and making decisions that actually matter.” Because this is America and the cold thing about it is without money and without your roots deep in the ground, you can’t get anywhere. And for two young kids at the ages of 20 and 23, no one is going to listen us by asking, “How do we do it? What do we do? Hey, am I allowed to do this?” No, so me and my brother said, “We’re gonna do it.” When I was 17 and my brother was 20, we went to a dispensary owner and we said, “Hey man, what’s the secret? How do you open one of these? One day I want to open one of these.” He said, “I got one word for you. Balls. It takes guts. It takes a lot of guts to put yourself out there.” And that’s what me and my brother did. Then we decided we were going take it to the next level because we get involved in whatever projects we do.

It all transitions back into the music. I care more about the product I put out than I care about the sales. I care more about what I’m attempting to do. It’s about the whole journey, and the journey of the dispensary was a crazy one. It had all the glitz and glamor you can imagine, and it had all the attention. There’s dozens of articles about it while operating. I’ll probably never get the credit for it, but the truth of the matter is what me and my brother changed the war on drugs completely. And it was the final straw that broke it. And that’s why in Colorado marijuana is legal. That’s why in Washington [marijuana] is legal. And now over one third of our states in our whole country has medical marijuana and soon-to-be over half. It’s because of people like me, my brother and a handful of other people too that sat there and said, “I’m willing to take a risk for the rest of the people.” I wasn’t compensated financially for what I had to go through at all. I came out with less money than I went in with. Whether I grossed $26 million or $50 million, at the end of the day I came out with nothing except for my pride, my reputation and the fact that I did what other people are too coward to do. Because there’s many people in that same industry that would rather hide, and that wasn’t me and my brother. Me and my brother paid taxes. We walked down to the [State Board of Equalization] with a million dollar check. And they said, “Whoa, no one has ever done this before.” And I said, “Yeah, well we want to be the first. We have tax revenue. We want to pay you.” And they said, “Well I don’t know if we’re allowed to take it. It’s for marijuana.” I said, “Well you don’t get the million dollars unless you say this is for medical marijuana.” He said, “Okay, we’ll take it.” And then right after that, [they] demanded that every dispensary pay sales tax in California.

DX: How did you navigate the fact that at the time marijuana was illegal but medical marijuana was just starting to blossom in the United States?

Blanco: We had to work with the county supervisors, the local sheriffs and the local police force to draw up rules and regulations. Me and my brother actually sat at those tables and wrote out the rules with these people that are now used all over California and all over the nation. I didn’t write them myself, but we were there creating them with a handful of other people.

The money was the least of our concerns. Ironically, that is what me and my brother got in trouble for was money—money laundering, essentially. Out of the 23 charges that they filed, that is the one that stuck the hardest. I couldn’t get out from money laundering. Ironically, I paid all of the taxes. Sometimes I feel like I even overpaid because I didn’t understand how taxes worked. I didn’t know at the time, so I just overpaid taxes.

Slow: Most of our focus had been on operating it legitimately, not trying to make a profit. When we first opened the dispensary everyone looked at it as an opportunity to get rich, and we thought, “Well there goes the niche right there…what if you opened one of these dispensaries, not for profit, but to do the right thing? Not to just go out and charge as much as you can, but to actually say, ‘Okay, marijuana really has medical value and how shall we do this the correct way so that it can become legal?’” That’s where most of our focus went.

Blanco Recalls Six-Year Trial Fighting The Federal Government

DX: Operations went sour in October 2007 when the facility was raided by the Federal Drug Enforcement Agency. Although the dispensary was legal under California state law, it was illegal under the federal government causing a media frenzy and a prosecution that took over six years. What’s the whole process been like for you? 

Blanco: There are people out there that can tell you what it’s like to fight the federal government for six years. It was a long, enduring and difficult process. When we first got raided, six years ago, our charges were 15 years to life, mandatory. That was the federal mandatory minimum. That means there’s no way for the judge to get under the mandatory minimum. Now the feds in the courtroom are vicious fighters. So most people, and after being locked up you see this, they say, “The second they get you down to 10 years or five years, take the deal. It’s the best you can get.” But me and my brother, in our hearts, believed what we did was right, correct, viable and was for the greater good. The thought of being put away for 15 years to life under the mandatory minimum was a stressful process. That’s where a lot of my music is derived from, that stress. You live your life thinking you’re going away for five, 10, 15 or 20 years. And there are people in jail to this day that were in similar situations that are still rotting in federal prison. And that must be horrible for those people.

Over the course, I probably had six or seven attorneys. Now federal attorneys don’t take less than $100,000 to do the case. So you do the math. This almost cost me a million dollars and six years of my life. I spent every penny that I had, plus debt for this fight. Most people, just like most of my lawyers after I had paid them $100,000 a piece, what did they recommend? Take the deal and go to jail. Me and brother said, “No. I believe in my heart that this was right. This is for the people. This is what our country needs. It’s time for change.”

Medical marijuana was passed in California in 1996, when I was 12-years old. So to someone of my generation, we think marijuana is legal. And not until I opened the dispensary did I understand, and really until the day I got raided, what the difference was between state and federal law. The common man doesn’t understand that there is a certain set of rules that overrides a certain set of other rules…that trumps other rules. People think rules are rules. So when I got sheriffs telling me that I’m legally allowed to distribute marijuana to these patients, then I say that puts me in the guidelines of doing so.

Slow: You think of police officers as the people that arrest you when you do something wrong. And in our community we had got a permit from the city. We got our sales tax. The police had come by, we did all our checks and everything was okay. [So] you start to think, “Well what I’m doing is legal.” We didn’t understand at the time that there’s a federal law that was still saying medical marijuana is illegal. You don’t see the presence of who the [federal government] are.

Blanco: [The federal government] aren’t even around. You see local law enforcement. That’s what most people see as what rules to follow.

Blanco Describes Initial Reactions To Federal Sentencing

DX: You were prosecuted in October 2013 and have served six months in prison and are currently serving six months in a halfway house. You accepted this sentence in a plea agreement back in April of 2013. What are your reactions to the sentencing of both you and your brother?

Blanco: Outraged, initially. I don’t feel I was vindicated, which I should be. I feel like I deserve a pat on the back. I feel that me and my brother took on the federal government, and in most people’s eyes, won. Now I don’t feel like I won. I gave six years of my life, all of my finances, a year of prison and three years of probation. By the end it’s a decade. So I did lose this fight but at the same time, everyone that is in federal prison right now says I took on the federal government and won.

Me and my brother didn’t stand down. They did a superseding indictment when we turned down. They said, “Okay. Five years. That’s the best you’re getting. If you don’t do it, we’re going to raise it so that you can’t even get out from under a 20-year sentence.” And me and my brother said straight up, “Fuck you guys. We’ll take it to trial.” That was me and my brother’s answers. The people won’t convict us.

But my attorneys didn’t like that because they didn’t want to go to trial. Everyone wanted it over. Everyone wanted me and my brother in prison. For six years me and my brother stood on our feet and said, “We will go to trial anytime you guys want to, and we have things to say.”

Slow: In federal court, all that was going to be presented to the jury was the amount of marijuana sold and the amount of marijuana collected. That is why we got money laundering charges. We didn’t actually launder money, but under the federal jurisdiction…

Blanco: Any money derived from marijuana is a form of money laundering. Changing over marijuana to money or extending the paychecks when we paid our employees, paying rent, buying employees lunch every single day and bonuses. Whatever we could do to make people feel good, is what they interpreted as money laundering.

Slow: So with money laundering charges and the evidence that they used was the fact that we paid rent on the dispensary. So the building that we rented from some other landlord, they called that money laundering because the money derived from the sale of marijuana was used to pay for the rent. The way the [federal government] painted the picture was just so unfair to the reality of what happened.

Blanco: When you think of money laundering, you think the movies. You think taking bundles of cash and transferring it into a new situation where it cannot be traced. Me and my brother have a completely open book policy. There was so much money going through the place we said, “Hey, take a look at our books anytime.” I mean at the end of the day, our place got so big because we had the best product at the cheapest price. We didn’t actually want to have a large scale of profit. We wanted to make just enough to cover the cost of running the business. That mentality made the quality control go up and the price go down in a time when our competition were doing the exact opposite. Just being benevolent and caring about people slightly more than the next man, made it why our gross sales were so large.

How Blanco’s Independent Approach Impacts His Music

DX: Guerilla Entertainment, which you are the co-founder of, has been going for a little while now. What have you found the advantages of putting music out under your own label to be?

Blanco: Well I’m a control freak, so I get total reign over how, what, when and where they’re going to come out. Now, I personally love that. I like being in control of these things, because I feel every single album and every single thing we do is tied together. I’ve had people recommend how to do our music career, and sometimes it’s not about selling out but I don’t know if I catch what other people’s idea of a road to success in the music industry [is]. Because when I was younger, that’s what I thought you had to go with your friends. Go with the people that are doing it, people who are signed to labels or whatever is just trending. You just want to hop on the bandwagon and you just keep riding it until eventually it pays off. But I’m personally not good at that. What I’m good at is creating and having a process to creating. So I start at the beginning. The album covers coincide with the name of each song and the overall feel when I bring in a producer. That’s why now I stick to one producer per project, because I want each one to be a story. And if I was not doing that independently, I think it would be hard for me to have that control.

Slow: We do it all ourselves: all the mixing, and we work with engineers ourselves. We work with the people that master the project. Everything is hands-on for us. There’s no person that tells us, “You can’t do that. That’s not a good idea.” We might have peers that suggest it, but ultimately every decision is made by Blanco.

Blanco: Me and my brother bounce ideas off of each other, and that’s what we go through. We ask for others opinions. If we were going through a record label, they would master the way they want to master it. But we took our mastering to Brian “Big Bass” Gardner at Bernie Grundman Mastering who has mastered all of [Dr. Dre’s] albums, Eminem’s albums and Linkin Park’s albums. So he’s basically the best of the best. Maybe someone else would say it’s just not worth it. But I’m putting these albums out, and I want them to be perfect, so I do want to take it to him to get mastered. And now all our projects are mastered by him. That was an executive decision made by me and my brother that I think was a right one. It’s not about one project, and it’s not about one song. We’re presenting a movement here…a whole bigger picture.

DX: Contextually, what direction were you guys heading in with your recent collaboration EP, “One Hunnid,” with The Jacka and Messy Marv?

Slow: There’s a phrase, “keep it 100,” and that means to be solid or to be 100 percent. So the initial idea was to be like, “We’re keeping this solid. We’re keeping it true to the game.” With that project we brought on The Jacka and Messy Marv—two artists that have helped shape Bay Area music. The concept of the album was just to come with a really solid project, and that’s why we got Tha Bizness on there to produce the whole project. We wanted to do something super for Bay Area fans. Bay Area artists usually only work with Bay Area artists. A lot of the production is from the Bay Area. One thing we are trying to do is step out of that box. That’s not to say that we don’t want to work with Bay Area artists, but we just don’t want to limit ourselves. So with “One Hunnid,” we were trying to elevate everything. From there we thought of the idea of naming all the songs after lies that presidents have said. So each of the tracks has to do with a lie that some president has said before. The Grassy Knoll was sort of a cover-up for the [John F. Kennedy] assassination or No New Taxes—one of the first of [George H. W. Bush’s] statements.

Blanco: Or 9/11 for September 11.

DX: Your 2013 collaboration LP with Nipsey Hussle, Raw, was produced entirely by Cookin’ Soul and with “One Hunnid,” the production was handled entirely by Tha Bizness. What’s it like doing projects with the same production team?

Blanco: When I used to make albums, I used to cherry-pick the best beats off of each producer, and that’s still how a lot of people do their albums today. [But] because most of these albums are kind of short, they’re not 20 songs on each one, I wanted to have a congruent and smooth feel to it. When I get one beat off of a producer it’s like, “Okay.” We shake hands, “Nice to meet you and I hope the song goes great.” But when I bring them in for the whole album, I put their name and their reputation on the line. So now we’re creating music together, and we’re creating the whole album. Now opposed to them just handing me a beat and saying “Do what you want,” they’re listening to the songs and saying, “Hey, I got more I want to do to this,” or “I think we should do this.” The chemistry actually stacks on top of each other. So now I got the producer in on the album, and I got me in on the album. I got [The Jacka] in on the album or whoever I’m working with. So it turns into a way better atmosphere. Everything can grow organically as opposed to forcing it. Earlier on in my career I feel like I did way too much forcing. And now, that’s what I don’t do. I don’t sweat the little things. If I like my idea, I want to go forward with it.

DX: What’s next for you music wise?

Blanco: Okay so One Hunnid just dropped. The next thing coming out is The Tortoise & The Hare and that’s a project that me and Husalah put together. It’s me and him on every song. The album is produced by DJ Burn One, and then we have Kokane, who sings on every hook. After that, me and my brother brought a buddy in, Nate, who plays guitar over the whole album. That gave it even a little bit more flavor to it. It’s called The Tortoise & The Hare I guess because it’s about stories. Each one’s a short story. Old fairy tales always had kind of dark sides to them, so this is kind of a dark fairy tale story. Musically, it’s one of our best albums. I flew DJ Burn One out for two weeks. I just locked him in the studio, he made probably 15 beats and we chose the best seven. The synchronicity of how it is—I feel like it’s on a higher level. It’s our best-composed album. This album’s like a symphony. It was built piece by piece and never really went backwards at any moment. It just kept getting added to and made better.

 

RELATED: Nipsey Hussle & Blanco "Raw" Cover Art, Download & Album Stream [News]

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