Marijuana Mogul Bankrolls California's Prop. 19

Nov. 2, 2010— -- Of the more than $3 million put up to support California's Proposition 19 ballot initiative to legalize recreational marijuana, half the money came from one man, Richard Lee, the Oakland entrepreneur behind a medical marijuana dispensary, nursery and other pot-related businesses.

"It was a very bold move on his part and it was a bold move that -- win or lose -- will turn out to be the right move," said Ethan Nadelmann, executive director of the Drug Policy Alliance, one of the nation's leading advocates for reforming drug laws. "Win or lose, Prop. 19 is already an incredible win. It has transformed the public dialogue around marijuana policy not just in California but around the country, and even internationally."

For supporters, legalization would end what they term a hypocritical ban on a drug less harmful than alcohol. They claim it would cut law enforcement costs, raise tax revenue, and make it harder for children to get marijuana. Supporters include the California branch of the NAACP; the state chapters of the American Civil Liberties Union; the California Young Democrats; the Republican Liberty Caucus; the California Council of Churches; and several big labor unions.

For opponents, Prop. 19 represents a threat to public safety, violates federal law and drug-free workplace rules, and wouldn't generate much tax revenue at all. Critics include Mothers Against Drunk Driving; most law enforcement groups; all major-party candidates for governor, state attorney general and U.S. Senate; the California League of Cities; the California State Association of Counties; and business groups.

While residents of Arizona, Oregon and South Dakota will consider medical marijuana measures today, California's vote on legalizing pot outright has drawn the most attention.

With a last-minute $1 million contribution last week from billionaire financier George Soros, proponents managed to raise about $3.4 million to bankroll the controversial measure.

Still, Lee himself put up about $1.4 million for the petition drive to put the measure on the ballot. A young man who flew ultralight planes and loved motorcycles, Lee made the legalization of marijuana his life cause after a 1990 fall left him paralyzed from the waist down. Medicinal pot, illegal at the time, served to dampen the back spasms as he sat in his wheelchair, he told the San Francisco Chronicle.

By contrast, the campaign against the measure raised about $315,000 this year, with an additional $250,000 coming from the California Chamber of Commerce last week for radio ads.

Are Prop. 19 Supporters Blowing Smoke?

Roger Salazar, a spokesman for the campaign against Prop. 19, said the opposition's last-minute influx of cash appeared to be a sign of desperation as the measure sagged in recent statewide polls.

"I think they're in a little bit of a panic," Salazar said. "The more they spend, the more the public becomes aware of the flaws of Prop. 19."

Still, some Prop. 19 supporters were claiming victory before a single vote had been counted.

"Prop. 19 has elevated and legitimized the discourse around marijuana policy like nothing ever before," Nadelmann said. "This is the first time major elected officials and labor unions and civil rights organizations have endorsed a marijuana legalization measure. The debate is less about whether to legalize marijuana and increasingly about how to legalize marijuana."

Lee is seen as the force behind the ballot initiative to let people 21 and older grow and possess marijuana and allow local governments to permit retail sales and collect taxes. Supporters said Lee decided to push the measure even though veteran activists urged him to wait until 2012. Lee has said the recession made his tax-and-regulate message all the more relevant.

"I've always thought since I grew up in the 70s that cannabis prohibition is unjust and hypocritical," Lee, 47, told ABC News earlier this year.

Oakland's Oaksterdam University, which Lee founded three years ago, is the centerpiece of a small marijuana business empire that brings in as much as $7 million a year. The university, which has grown to three campuses in California and one in Michigan, has given his cause a platform.

The school, which boasts that it provides "quality training for the cannabis industry" and teaches more than 4,000 people a year, along with Lee's other businesses, have helped revitalize part of downtown Oakland and turned the city into something of an unofficial capital of the legalization movement.

"The bad economy has definitely helped us out a lot as far as opening up a lot of people's minds to seeing that this is a waste of money and that we need to use our public funds better and tax these people," Lee told ABC News.

Prop. 19: Millions Spent; Millions at Stake

Taxing marijuana sales could generate $1.4 billion in revenue for California every year, and save the state millions of dollars more in enforcement costs, according to advocates.

Lee's path as a marijuana mogul started after his disabling back injury. In 1990, on tour as a lighting technician for Aerosmith, Lee fell and suffered a severe spinal injury that left him paralyzed from the waist down.

Lee moved to California from Texas in 1997, one year after California became the first state to legalize medicinal marijuana. He started his own marijuana growing operation in a warehouse near the Oakland Coliseum.

Earlier this year, Lee told ABC News that he hoped to raised $20 million for the campaign, but the money didn't materialize. Two of Facebook's co-founders, Sean Parker and Dustin Moskovitz, reportedly donated $100,000 and $70,000, respectively. Billionaire Progressive Insurance Chairman Peter Lewis gave $59,500, and television producer Kevin Bright donated $77,000.

"The endorsements that were most important were not so much the individuals but more the California Chapter of the NAACP, the Black and Latino police organization and some of the labor unions," Nadelmann said. "To the extent that there were any endorsements that moved the public in a positive direction on Prop. 19, it was those endorsements."

But opponents remain undaunted. Salazar said Prop. 19 had done little to advance the legalization question.

"The discussion of the legalization of marijuana at a national level is not a new one and Prop. 19 didn't elevate or lower it, it just continued it," he said.