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Tax-Free Storage Wars

Atossa Araxia Abrahamian | Longreads | May 2018 | 15 minutes (3,575 words)

On September 17, 2014, the art world’s upper crust convened in Luxembourg City to fête Le Freeport, a warehouse where the ultra-rich hoard paintings, cars, jewelry, wine, and other luxuries in duty-free comfort. Waiters in red uniforms dodged oversize bouquets of white lilies to pass around trays of champagne, and an orchestra played an overture written especially for the occasion before an audience that included the Grand Duke of Luxembourg and top executives at Deloitte.

That evening, two American businessmen mingled among the government ministers, gallerists, and local bigwigs. Kenneth Cayre, a wealthy real estate developer, and Tom Sapienza, an accountant who’d worked for years in art shipping and handling, were planning their own entrée into the fine art storage business. But instead of operating in the luxury tax haven of Luxembourg, they would open their storage facility in a place not known for its low taxes: New York City.  

This story is published in collaboration with Artsy Editorial. Artsy is a global platform for readers to learn about, discover, and purchase art.

The terms “free port,” “free trade zone,” and “foreign trade zone” are used interchangeably in the art world. They generally denote a place that’s free of customs duties and other taxes— but the extent of that freedom depends largely on the jurisdiction of the facility. That’s why most of these warehouses tend to be in existing tax havens, like Luxembourg or Switzerland.

In the United States, these areas are called Foreign Trade Zones, and they’ve existed under the protection of Customs and Border Patrol since the first opened on Staten Island in 1937. Today, they’re located in airports, in seaports, and on waterfronts, but also in warehouses and urban centers. They’re a big part of the U.S. business landscape: There were 263 of these zones in 2016, employing 420,000 people across the country, with hundreds of billions of dollars worth of merchandise, from car parts to pharmaceuticals, moving into and out of them. The zones typically take advantage of what’s known as an inverted tariff. When there are federal duties on the imports of raw materials, like steel, but not on the import of a finished product, like a tractor, it makes sense to bring the steel into the duty-free zone, manufacture the vehicle there, then formally import it without incurring the taxes.  

None of this applies to artwork, though, because there are no federal import duties on art. Nor are FTZs home to any art studios engaged in manufacturing. Until recently, there was only one American FTZ dedicated to art, and it was in Delaware, which from a tax perspective is as close to a Luxembourgish freeport as you can get in the continental United States, so the facility was not only free of customs duties, but also most local and state taxes.

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A few inside the Arcis art storage facility in Harlem. (Zoe Wetherall for Artsy)

What Delaware lacks is prestige and proximity to auction houses, museums, and galleries, so Cayre and Sapienza recognized potential in a New York competitor. “We saw the attention at the opening,” Sapienza recalled at a 2017 art business conference, “and we decided we’re coming to market with a 21st-century storage facility. Why not, as the icing on the cake, add a Foreign Trade Zone?”

Their facility, which opened in April 2018 on a proletarian Harlem block on West 146th Street, is called Arcis Art Storage. “Arcis” is Latin for “fortress” — a fitting name for what’s essentially a museum-quality bunker, currently insured to store up to $3 billion worth of goods. Like Luxembourg’s Le Freeport, which is armed to the teeth and admits next to no one, security is tight: Guests at Arcis must have their retinas scanned to go through the first door, then present their bare forearms for a vascular scan at a second door.

Instead of operating in the luxury tax haven of Luxembourg, Arcis would open their storage facility in a place not known for its low taxes: New York City.

Once inside, visitors to the building will be wedged — geographically, at least — between a historic black church and a daycare center. But as far as the U.S customs agents are concerned, once goods are imported into Arcis — whether they’re coming from Shanghai or the Upper East Side — they are no longer within U.S customs territory.

This was going to be Cayre and Sapienza’s edge over a crowded New York art storage market. But there was a reason no one else had done it yet: Even though customs duties don’t apply, New York State taxes do. This means a painting bought at Christie’s and stored uptown would not get preferential treatment when it came to sales and use tax over a painting going anywhere else. Arcis got the competitive, insular art storage world wondering exactly what its executives were selling.

***

Kenneth Cayre, 74, has had a varied and eccentric career. His associates at Arcis, as well as friends and former colleagues, describe him as a sharp, family-oriented hustler. (He declined to be interviewed for this article.) Cayre began his import-export career in 1959 as a teenager, operating a floating duty-free store with his two brothers, sailing back and forth from Miami to the Bahamas with cigarettes, alcohol, perfume, and watches to sell to passengers who wanted to avoid high import duties. Over the years, he helped a cousin run a textile factory in Puerto Rico; operated a pantyhose manufacturer called Kandy Mills, in Hialeah, Florida; and, inspired by the rhythms of the Miami Beach club scene, started a record label with his brothers called Salsoul.

In the early 1980s, the Cayre brothers started Good Times Entertainment, which distributed VHS copies of Jane Fonda exercise tapes, knockoff Disney movies, and other videos whose copyrights were in the public domain. An early encounter with Walmart founder Sam Walton led to a long-standing distribution deal, but the company was eventually sold to a private equity firm in 2003. The company filed for bankruptcy in 2005.

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A client viewing room at Arcis. (Zoe Wetherall for Artsy)

Today, Cayre owns and manages property with his sons, Jack and Nathan, including a million-square-foot chain of self-storage warehouses in the New York tri-state area called Treasure Island. In 2014, real estate heavy Steven Guttman made a splashy transition from cheap self-storage to high-end warehousing with Uovo, which now has branches in Rockland County and Long Island City, Queens — home to a burgeoning gallery scene and the contemporary art museum MoMA PS1. During this time, the art market was growing fast: Between 2005 and 2015, annual sales doubled to reach $63.8 billion, and more contemporary art is being produced and sold every day. Nearly 80 percent of all artwork is in storage, according to one storage executive, and since new art is made every day, demand for storage facilities — at least in theory — will grow continuously.

In an application for property tax breaks from the city of New York, Cayre describes himself as “an artist at heart” and claims that after Superstorm Sandy ravaged the downtown gallery scene, he felt compelled to enter the art storage business. “Ken witnessed more and more galleries and Fine Art storage facilities vacating Manhattan for locations in New Jersey like Newark and Jersey City,” the application reads. A desire to clean up his image may have also provided motivation: In 2006, Cayre was accused by New Jersey con man-turned-FBI informant Solomon Dwek of having received stolen assets worth $2.2 million. Although he was never charged, Cayre was kicked off the board of a New Jersey medical marijuana foundation in the aftermath.

Guests at Arcis must have their retinas scanned to go through the first door, then present their bare forearms for a vascular scan at a second door.

In mid-2013, less than a year after the storm, Cayre spent $4.5 million on the Harlem parking lot where Arcis now stands and an adjacent property housing a childcare and eldercare center. Six months later, one of his sons ran into a real estate developer friend at a Super Bowl party, who offered to introduce the family to someone in the art storage business.

That someone turned out to be Tom Sapienza, now a 48-year-old dad of three from Long Island with dusty blond hair and the wholesome, slightly stiff demeanor of a Little League coach. An accountant by training, he’s a khakis-and-blazer kind of guy, which makes it hard to imagine him at a glitzy art opening in Luxembourg. But Sapienza had a Rolodex of potential clients at museums, galleries, and family offices — fruits of a decade working as a consultant and CFO at Crozier Fine Arts, one of the world’s biggest art storage firms. Sapienza’s tenure there ended on a sour note: According to legal documents, he was fired in 2012 and subsequently sued the company for allegedly denying him his share of equity. His ex-colleague, Simon Hornby, declined to comment on the termination and the lawsuit; Sapienza also declined to comment on the suit, which was settled in 2017.

Cayre and Sapienza hit it off, and before long, were en route to a castle in Maastricht for a business seminar designed to educate art world professionals about finance and to educate financiers about the art world. “It was to expose Ken to the new global art world,” Sapienza says. In the class, they heard a presentation by a business professor about Le Freeport and the business of Free Trade Zones for art. “We left with binders and binders of information,” says Sapienza. “He loved it.”

***

The first free ports were established in early modern Europe as way stations for goods like grain, coffee, or spices. Their extraterritorial status saved traders time and money, but since the contents of these warehouses were perishable, the facilities weren’t intended for long-term storage, let alone keeping valuables like paintings and sculptures. But as globalization made more and more types of business transnational, these facilities evolved too. Today, free ports are a crucial cog in the global art trade. Their contents are fiercely guarded, top secret, and largely tax-free. But which exact taxes they incur depends on their location.

“The term ‘free port’ really does mean something phenomenal in Europe and Asia,” says Jason Kleinman, a partner and art-tax-law expert at Herrick Feinstein LLP. Those free ports exempt buyers and sellers from VAT and income taxes, and because of their clear perks, they have courted art collectors for decades. “These locations confer great tax advantages to the people who use them to store or conduct business,” Kleinman says, adding that when sales take place within a foreign free port, sellers also save on shipping and handling costs. For speculators flipping Picassos, free ports specializing in art and luxury items offer an attractive deal.

American FTZs, by contrast, have more limited benefits and have historically served the automotive, electronics, and oil industries. The art world got one of its own in 2015, when Austrian art shipper Fritz Dietl opened the 36,000-square-foot Delaware Freeport. His art-centric outpost allows clients who buy pieces in New York or Miami to avoid state sales taxes if they ship their pieces directly there — but the saving is due to the tax breaks offered by the state, not because it’s a FTZ.

For speculators flipping Picassos, free ports specializing in art and luxury items offer an attractive deal.

That’s because while American FTZ rules do waive federal customs duties when they are applicable, they don’t eliminate state or city sales and use taxes; in that respect, FTZs are part of the state they’re in, but not part of the country. Federal law further stipulates that goods can’t be bought and sold within the zones, so under-the-radar handoffs aren’t possible either. And New York’s sales and use taxes on art are levied based on the location where the buyer gains possession of the item, whether it’s acquired at a domestic sale or at an auction abroad — so the most an FTZ could possibly do is defer that cost while the item is in storage.

In other words, if a $10 million painting ends up hanging on a billionaire’s wall in New York after passing through an FTZ, the FTZ alone will not save its owner from the state’s 8.875 percent tax on sales and use. It might be more convenient or indeed more prudent to store a painting bought in Manhattan just a few miles uptown from the auction house than in Delaware or Long Island, because moving art is risky, but an FTZ won’t save money. And in the event that a painting was bought in London and brought to New York, the most the FTZ would do is defer tax until the piece leaves the zone. Since artwork isn’t dutiable, there’s nothing to gain from avoiding customs. “I spent hours researching it,” Kleinman says, “and I concluded that Arcis is a tax-free zone in search of a tax.”

Nevertheless, a tax-free anything sounds good to a certain clientele, even if the actual benefits are limited (or, as Kleinman suggests, virtually nonexistent). “People toss the term around all the time,” Kleinman says. “It’s P.R.”

***

After the Maastricht seminar, Sapienza called a former Crozier colleague, Kevin Lay, who joined Arcis as director of operations in 2016. For Lay, a rakish former punk rocker who is more visibly artsy than Sapienza, art preservation is a matter of philosophical import. “Art storage is time travel,” he says. “When you look at a painting you’re standing where the painter stood, and as custodians of culture it’s up to us to return this in the same condition it came in.”

Now complete, the warehouse looks a bit like a steely blue iceberg: monolithic, windowless, and blank. There’s no obvious signage save for a large purple A, for Arcis, on the north face of the building, about 10 feet above a 16-feet-high and 40-feet-wide loading dock that opens onto 146th Street. “If your art doesn’t fit here, it won’t fit anywhere in the city,” says Sapienza. (The largest dock at Uovo’s New York City facility is 13 feet 7 inches high and 11 feet 10 inches wide.) A discreet black car entrance leading into the loading area and visible only from one-way mirror windows in the executives’ offices will accommodate the rich and wary.

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Detail of the Arcis storage facility. (Zoe Wetherall for Artsy)

Inside, the newly painted facility smells disconcertingly like an Ikea stockroom and looks, at first glance, like an ordinary industrial warehouse: exposed beams, large metal columns, huge mechanical doors, and stark white walls. The ground floor is divided into viewing rooms with $1,000-a-bulb lighting, per the company,  and ceiling rigs for moving heavy sculptures. There’s also a loft-like space where artwork will be inventoried, and, on the higher levels, private storage units in different sizes, along with larger shared spaces.

Lay and Sapienza can — and do — talk for hours about the building’s technical specs. If a storm surge were to occur, a protective envelope of panels made of insulated metal panels between its inner and outer walls would help protect it from the elements. Its power supply is uninterruptible, with every function intentionally redundant in case a power source goes out. The generators have backups located on the roof, which run on natural gas; in theory, they will keep the building going until any emergency is over. The faint whir of the air-conditioning system, which filters the air three to six times an hour, is a constant presence; otherwise, it’s completely quiet. “They’re not taking any chances,” says Lawrence Bovich, a partner at Mechanical Technologies, LLC, one of the firms that installed part of Arcis’ HVAC system. “These guys are many folds more risk-averse than any museum might be.” Arcis would be a great place to hide during a natural disaster, or allergy season.

Cayre applied for and received $13 million in tax breaks on construction by promising the warehouse would bring six full-time and 10 part-time jobs to East Harlem.

Serious protection costs serious money. The price of storing a painting at Arcis can range from just a bit more than at your average self-storage facility to thousands of additional dollars a month depending on the size of the unit, whether there’s custom shelving, and where in the building it’s located, says Lay — but he won’t say by how much.

Cayre applied for and received $13 million in tax breaks on construction by promising the warehouse would bring six full-time and 10 part-time jobs to East Harlem and calculating that its benefit to the city, mainly in other taxes, would total $20 million. But employment at art storage facilities typically goes to aspiring artists who know how to handle, crate, and transport the art; even Arcis’s own filings note that the business will require “employees with specialized skills sets similar to those of a museum registrar.”

That could explain why an administrator at a community organization on the south side of the block called Street Corner Resources, which does job placement for young people as part of its larger mission of reducing gun violence, said on a recent afternoon that he’d heard nothing about Arcis, let alone the possibility of jobs there. Staff at neighboring bodegas, a barbershop, and a local diner were aware of the facility because they’d served chatty construction workers from the job site; none of them knew they would soon share a block with million-dollar paintings. At the senior center next door to Arcis, whose building Cayre’s company acquired, a coordinator said they’d received assurances from the newcomers that they would not be displaced.

Because FTZs are regulated by the federal customs agency, local elected officials don’t participate in the approval process. When asked how Arcis might affect this part of his district, City Councilman Bill Perkins grew aggressive, demanded more information, and directed questions to his predecessor, current State Assemblywoman Inez Dickens, who didn’t respond to requests for comment.

***

In April 2017, Arcis was a sponsor of the Art Business Conference, a glitzy annual networking event for the fine art world, at the Time Warner Center in Manhattan. “Kevin and I both keep getting calls from people pushed from locations in Manhattan,” Sapienza told the crowd during a panel about freeports. “People wanted us to commit space. We have a warehouse reservation binder, with clients signing up for the space.”

In the audience were Delaware Freeport founder Fritz Dietl and Crozier president Simon Hornby. Hornby says Crozier also consulted with advisors on the utility of an FTZ, and the benefits came up short. “Art is not a dutiable good. There are no duties on art in the U.S.,” he says. “So what’s the point of a FTZ for art if there’s no duty in the first place and it’s designed to suspend duty?”

Even Dietl says the free port part of the Delaware Freeport saves little money. But branding something as a free zone or free port sends a powerful — if empty — message to potential clients. “It absolutely works because it’s a term that’s so widespread in the art world,” he says.

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A freight elevator at Arcis. (Zoe Wetherall for Artsy)

Self-storage king–turned–fine art protector Steven Guttman says his team studied the possibility hard before they opened Uovo and found no significant benefits. “We did not take this lightly,” Guttman says. “We knew about this a long time ago and kept saying this makes no sense. I’ve been in the business for three years, and never heard a tenant request an FTZ.” He adds of Arcis, “They may be onto something just by confusing people.”

Sapienza declined to comment on tax hypotheticals, insisting that it’s the client’s responsibility to obtain appropriate counsel and follow the law. Kevin Lay insists there’s some tax value to the FTZ — though that depends on how you define “art.” “Antique furniture that’s a hundred years old can be imported duty-free, but if you have a lamp from 1921 that you bought in Paris at auction for $1 million, if you were to bring it here, you would avoid those duties,” he says. The idea is that the lamp could hang out in storage until duties weren’t due. Other valuables, like some jewelry, also carry duties. In those scenarios, an FTZ can also be useful to avoid or defer them.

Herrick’s Jason Kleinman, whose job it is to help collectors manage (or as he puts it, “control”) their U.S. tax bill, says Arcis “doesn’t change anything for me or present me with any tax-planning opportunities.” Some of his clients were curious about Arcis, he says, but none had serious plans to relocate their assets. “I’d suggest anyone look at Arcis and apply to it criteria you’d demand of any other facility,” he says.

In the end, the biggest draw might be to collectors looking to keep their art close to home, and eventually sell at a New York auction. If there’s one thing everyone can agree on, it’s that the less you move art, the better. And the tax-averse, art-collecting global elite? They’ll always have Luxembourg. 

***

Atossa Araxia Abrahamian is a journalist and the author of The Cosmopolites: The Coming of the Global Citizen.

***

Editors: Michelle Legro and Anna Louie Sussman
Photographer: Zoe Wetherall

Fact checker: Ethan Chiel
Copy editor: Jacob Gross

Special thanks to the editorial team at Artsy.

 

Etta or Bessie or Dora or Rose

AP Photo / CSA-Printstock, Photo illustration by Katie Kosma

Elisa Albert | How This Night Is Different | May 2018 | 23 minutes (5,706 words)

October 2004

Dear Philip,

You must be aware of the intimidation factor inherent in anyone’s writing to you, but I wonder if maybe the paradigm is similar to what happens when a stunning woman walks into a room: no one approaches her, she’s simply too beautiful; everyone assumes they have no shot. Maybe you don’t get many letters. Maybe you haven’t received a truly balls-out, bare-assed communiqué since 1959.

You once signed a book for me. That’s the extent of our connection thus far, but it’s something, isn’t it? The book was The Counterlife, but I had yet to read it when I presented it to you for signature. You were unsure of the spelling of my name, and so there’s an endearing awkwardness, a lack of flow, to the inscription. For E, you wrote, and the pen held still too long on the page, leaving a mark at the point of the lowest horizontal’s completion while you waited for me to continue spelling. L, you continued on, and then, again, a spot of bleeding, hesitant ink before the i and the s and the a, which proceed as they should before your slanted, rote, wonderful autograph. I remember being all too aware of the impatient line behind me, people clutching their copies of Portnoy’s Complaint, Goodbye, Columbus, The Human Stain, the odd Zuckerman Unbound. I tried to meet your eye, I tried to communicate something meaningful. The others, of course, didn’t get it. I wanted you to know: I got it. Later, when I found my way to reading the book, I actually purchased a whole new copy so I wouldn’t sully my signed paperback. I cherish our moment of eye contact, your pen hovering over the title page, my name circulating in that colossal mind of yours.

But wait. This is no mere fan letter; no mere exercise in soft-core intellectual erotica constructed for your amusement. I have an objective. How old are you now, Philip? Early seventies, is it? You are, of course, notoriously private. I have the books, sure, like everyone else. And the reviews of the books, each of which mentions the notorious privacy. And there’s the Claire Bloom debacle, which I hesitate even to mention, given its complete disrespect of the notorious privacy (though you might be happy to know that I couldn’t find “Leaving A Doll’s House” in any of the four sizable bookstores I checked and had to finally order it on Amazon). And The Facts, which I made a point of reading after the Claire Bloom, for balance. A graduate school friend of mine was your research assistant for a few years while we pursued our MFAs and it took her almost a year of post-workshop drinking to slyly confess, to a rapt audience of salivating young writers, her association to you. (Otherwise you’ll be happy to know she was loyal; she professed total ignorance of your life, your private matters, even your address. She seemed, in retrospect, somewhat terrified of you. I half-seriously offered her boyfriend a blow job if he’d get me your address. The table of young writers giggled madly and took big sips of beer.)

Read more…

Bundyville Chapter Two: By a Thread

Illustration by Zoë van Dijk

Leah Sottile | Longreads | May 2018 | 26 minutes (6,578 words)

Part 2 of 4 of Bundyville, a series and podcast from Longreads and OPB.

I.

It’s mid-November, the end of the first week of the trial in Las Vegas. I’ve found that my favorite time of day here is early morning, when the only people to talk to are those calling “good morning!” from the doorways and brick plazas where they’ve slept. It’s when Fremont Street is free of tourists and populated only by guys with hoses whose jobs are to wash away the things that seem always to fill this city street: spilled margaritas and cheap beer and puke.

I’m staying in a cheap casino on Fremont Street in a room that’s not expensive enough to have a coffee maker, which means I have to eject myself into the world without any caffeine, a thing I would never do at home but here I’ve come to look forward to. It’s the only time it’s quiet enough to think, to not lose yourself in the things Vegas asks you to become.

At night on Fremont, blocks from the federal courthouse, you will be offered whatever you need. Booze, drugs, money, beautiful women, beautiful men. Your fortune, told to you in cards. Your name etched on a bottle opener, a license plate, a flashing keychain, a pair of dice. Get drunk. Get high. Get wild. It’s Vegas, baby — a line people repeat here like a mantra in packed elevators, in coffee shops, in the security line of the “fed castle” where Bundy’s followers empty their pockets of change and pocket-size Constitutions before going through the metal detector. When Judge Gloria Navarro strolls to the bench each morning — always late, always carrying an iced coffee — people explain it with a shrug: “Vegas, baby.”

I’ve avoided the Vegas life this week, but on my last night — a Thursday — I stop into a bar on Fremont Street and take the only seat left at the bar, next to a Mr. T impersonator. There’s no court tomorrow, so I’m OK with staying out a little late and seeing what’s so appealing about this city. Vegas at night, despite my resistance to it, is fun — and I’ve had enough to drink with Mr. T that I strike up a conversation with a couple of guys who’ve traveled here from the East Coast to sample the legal marijuana. I ask them if they’ve heard of Cliven Bundy, and one responds immediately, “He’s that cowboy the government is trying to steal land from, right?”

This must be what poker face feels like.

The next morning, I’m a little hungover and way out in the suburbs of the city. I’m sitting in this bright-white, fluorescent-lit office, guzzling complimentary bottles of water. I’m in the office of an ex-Bundy follower who used to be close with the family, Melissa Laughter. She went to Bundy Ranch in 2014 and to Malheur in 2016. She has spent holidays with the Bundys.

She’s since become a vocal detractor of the Bundys and the wider Patriot movement that supports them. She says the Bundys demand loyalty, allegiance. She has come to think of them as cult leaders.

“A cult is is a blind following of some enigmatic leader,” she says. “They don’t question. They don’t act independently. They act as one.”

Laughter is a devout member of the Mormon church, and the granddaughter of a Utah dairy farmer. She explained what initially attracted her to the Bundys. “I’m like, OK, we have something in common. I’m interested in talking to them and hearing what they have to say,” she says. “So like many people, I was sympathetic to them to begin with.”

Laughter is a staunch conservative — a woman who has run for public office in Nevada as a Republican. She has bright white teeth and wears big cowboy boots with dresses. She’s pro-gun, vehemently anti-marijuana.

She grew up in the church and felt like something was off about how the Bundys talked about the Gospel to friends and family. “We would often have these philosophical religious debates where they would talk about LDS doctrine,” she says. According to Laughter, her differing perspective on church teachings wasn’t well received around the ranch. “They constantly take offense if you say anything against what they’re saying.”

But the Bundys were seeing things in the Gospel she couldn’t understand.

“I’m going to show you something else no one else has but the federal government,” she says. She reaches to grab something from the floor, then plunks a big black binder onto her desk.

“Have you heard about The Nay Book?”

Yeah, I’d heard murmurs of it. I just didn’t think it was real. Read more…

One Consequence of Cannabis Legalization is Market Saturation

Photo by Alex Milan Tracy/AP

In the same way resin gums up your bong stem, an overabundance of quality cannabis has gummed up Oregon’s marijuana economy. For Willamette Week, Katie Shepherd and Matt Stangel examine this young hot industry’s newfound problem: too much weed, man. The Oregon Liquor and Cannabis Commission cannot limit the number of operating licenses it provides to growers and dispensaries, and yet, in the summer of 2018, Oregon’s cannabis growers will double. Who the hell is going to smoke / vape / eat / illegally transport all of this weed? In the meantime, the glut has forced dispensaries to sell grams at unsustainably low prices, and hardworking growers are gauging if and when they’ll have to switch to other crops. The frontier has taken a new form out West.

This month, WW spoke to two dozen people across Oregon’s cannabis industry. They describe a bleak scene: Small businesses laying off employees and shrinking operations. Farms shuttering. People losing their life’s savings are unable to declare bankruptcy because marijuana is still a federally scheduled narcotic.

To be sure, every new market creates winners and losers. But the glut of legal weed places Oregon’s young industry in a precarious position, and could swiftly reshape it.

Oregon’s wineries, breweries and distilleries have experienced some of the same kind of shakeout over time. But the time table is faster with pot: For many businesses, it’s boom to bust within months.

Mom-and-pop farms are accepting low-ball offers to sell to out-of-state investors, and what was once a diverse—and local—market is increasingly owned by a few big players. And frantic growers face an even greater temptation to illegally leak excess grass across state lines—and into the cross hairs of U.S. Attorney General Jeff Sessions’ Justice Department.

Read the story

“We All Had the Same Acid Flashback at the Same Time”: The New American Cuisine

Getty / 123RF images, Composite by Katie Kosma

Andrew Friedman | Excerpt adapted from Chefs, Drugs, and Rock & Roll: How Food Lovers, Free Spirits, Misfits and Wanderers Created a New American Profession | Ecco | February 2018 | 17 minutes (4,560 words)

* * *

He spent his last pennies on brown rice and vegetables, cooking them for strangers who shuttled him around. Just in time, people started feeding him.

You could begin this story in any number of places, so why not in the back of a dinged-up VW van parked on a Moroccan camping beach, a commune of tents and makeshift domiciles? It’s Christmas 1972. Inside the van is Bruce Marder, an American college dropout. He’s a Los Angelino, a hippy, and he looks the part: Vagabonding for six months has left him scrawny and dead broke. His jeans are stitched together, hanging on for dear life. Oh, and this being Christmas, somebody has gifted him some LSD, and he’s tripping.

The van belongs to a couple — French woman, Dutch man — who have taken him in. It boasts a curious feature: a built-in kitchen. It’s not much, just a set of burners and a drawer stocked with mustard and cornichons. But they make magic there. The couple has adventured as far as India, amassing recipes instead of Polaroids, sharing memories with new friends through food. To Marder, raised in the Eisenhower era on processed, industrialized grub, each dish is a revelation. When the lid comes off a tagine, he inhales the steam redolent of an exotic and unfamiliar herb: cilantro. The same with curry, also unknown to him before the van.

Like a lot of his contemporaries, Marder fled the United States. “People wanted to get away,” he says. Away from the Vietnam War. Away from home and the divorce epidemic. The greater world beckoned, the kaleidoscopic, tambourine-backed utopia promised by invading British rockers and spiritual sideshows like the Maharishi. The price of admission was cheap: For a few hundred bucks on a no-frills carrier such as Icelandic Airlines — nicknamed “the Hippie Airline” and “Hippie Express” — you could be strolling Piccadilly Circus or the Champs-Élysées, your life stuffed into a backpack, your Eurail Pass a ticket to ride.

Marder flew to London alone, with $800 and a leather jacket to his name, and improvised, crashing in parks and on any friendly sofa and — if he couldn’t score any of that — splurging on a hostel. He let himself go, smoking ungodly amounts of pot, growing his hair out to shoulder length. In crowds, he sensed kindred spirits, young creatures of the road, mostly from Spain and Finland. Few Americans.

Food, unexpectedly, dominated life overseas. Delicious, simple food that awakened his senses and imagination. Amsterdam brought him his first french fries with mayonnaise: an epiphany. The souks (markets) of Marrakech, with their food stalls and communal seating, haunt him. Within five months, he landed on that camping beach, in Agadir, still a wasteland after an earthquake twelve years prior. He lived on his wits: Back home, he’d become fluent in hippy cuisine; now he spent his last pennies on brown rice and vegetables, cooking them for strangers who shuttled him around. Just in time, people started feeding him, like the couple in whose van he was nesting. Food was as much a part of life on the beach as volleyball and marijuana. People cooked for each other, spinning the yarns behind the meals — where they’d picked them up and what they meant in their native habitats. Some campers developed specializations, like the tent that baked cakes over an open burner. Often meals were improvised: You’d go to town, buy a pail, fill it with a chicken, maybe some yogurt, or some vegetables and spices, and figure out what to do with it when you got back.

Marder might as well have been on another planet. “This was so un-American at that time,” he says.
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Why Is Northern Mexico’s Thriving Resale Clothing Business Illegal?

AP Photo/Julie Jacobson

Americans bury 21 billion pounds of clothing in landfills each year. That’s sick. Soil and water are used to grow cotton, which gets treated with poisonous herbicides and pesticides, only to bury it back in the ground? For Racked, Eileen Guo reports from Southern California about Mexico’s secondhand clothing economy that has developed around American excess.

A large portion of Goodwill clothing ends up in discount bins in a warehouse a mile north of the US-Mexico border, at what Guo calls “the end of the nonprofit’s supply chain.” There, Mexican citizens buy them at low prices to sell back in Mexico, sometimes at specialized resale stores, often at open-air markets and online. This system is certainly better than burying clothes in a landfill; people can use them and make a living. Unfortunately, the practice is illegal, because Mexico’s textile industry and manufacturing interests say the used clothing trade competes with their legitimate business. In response, enterprising people have created an elaborate system for smuggling the contraband that should not be contraband and making what is truly an honest living.

This is because Mexico’s protectionism of its clothing makers isn’t just targeted at the used clothing trade. When China entered the World Trade Organization in 2001, the Mexican government imposed tariffs of up to 1,000 percent on Chinese goods, which ultimately decreased to 20 percent by 2011. And it wasn’t until 2012 that “affordable” fast fashion brands like H&M, Forever 21, and Gap arrived in the country. Even then, they were still out of reach of most shoppers both because of their location (only in Mexico City) and prices (for example, 69 pesos or $5.30 for a pair of boxer briefs, far too expensive for 2012’s annual household per capita income of $3,358.29.)

So along with American guns (much easier to buy in the US given its lax gun laws), California weed (higher-quality than Mexican marijuana, following legalization), and auto parts (legal, but often undeclared to avoid paying high customs duties), secondhand clothing cannot just cross the border; it must be smuggled.

Forced underground, the used clothing trade thrives as one of the “weapons of the weak,” as anthropologist Gauthier describes “the things that people do to just survive under conditions of economic exploitation.”

All along the border, this is done through ant trading, a process by which small volumes of contraband are brought over the border to avoid suspicion or, at the very least, mitigate the risk of confiscation if caught.

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Kara Walker’s Subtlety

(Photo by Andrew Burton/Getty Images)

Natalie Hopkinson | A Mouth Is Always Muzzled: Six Dissidents, Five Continents, and the Art of Resistance | The New Press | February 2016 | 14 minutes (3,721 words)

* * *

Like a web
is spun the pattern
all are involved!
all are consumed!
Martin Carter

Inside the abandoned Domino Sugar Refinery in New York, the first thing that hits you is the smell: over a century’s worth of industrial grime, clinging to black, molasses-coated walls. At first whiff, it is kind of sweet, like stale cake. As you go deeper into the cavernous brick building, it gives way to a sour curdling. As my ten-year-old daughter, Maven, describes it: “It’s like how my cat smells when he throws up.”

Maven, my friend Izetta, and I are among more than a hundred thousand people who make a pilgrimage in the summer of 2014 to pay homage to the “Sugar Sphinx,” the seventy-five-foot-long, forty-foot-high creation of Kara Walker, one of the most important and provocative artists working in the United States. The sculpture is forty tons of sugar molded into a ghostly white apparition, part mammy, part sphinx. The line to see her takes more than an hour to travel and stretches out for four long Brooklyn blocks. I spot the writer Gaiutra Bahadur, whose recent book, Coolie Woman, explores the history of indentured sugar workers in Guyana. Bahadur’s research on sugar plantation life and its bitter aftertaste among Guyanese women speaks forcefully to the exhibit we came to see. I wave Bahadur over to join us in line.

The installation’s title, displayed in bold black type painted along the Domino Sugar factory’s brick façade:

A Subtlety

or the Marvelous Sugar Baby

an Homage to the unpaid and overworked Artisans who
have refined our Sweet tastes from the cane fields to
the Kitchens of the New World on the Occasion of the
demolition of the Domino Sugar Refining Plant

The original Domino factory—first built in 1850s Williamsburg— was being torn down, along with the stories of generations of lives that it touched around the world. The factory was just one stop in the sugar industry’s “triangular trade” that created the blueprint for the globalized economy. Investors came from Europe; labor came from Africa; the cane fields were located in points across the Global South. The Domino refinery was the final step before the sugar reached consumers. Raw sugar would arrive at Domino’s forty-thousand-square-foot facility. Through the magic of refinery, pristine white sugar would come out. The profits that followed made sugar a key fuel of Empire.

The title, A Subtlety, is taken straight from history. Centuries ago, “subtleties” referred to elaborate, edible toys made of sugar. These exotic treats and status symbols were first made in the Middle East and popularized among the seventeenth-century European aristocracy. These “subtleties” could be trees, architectural models, or depictions of peasants holding baskets of fruit. There was nothing subtle about them, given what a rare and expensive luxury sugar was at the time. Unveiled at dinner parties, these were ostentatious displays of the host’s clout. The sugar sculptures could also be used to send more subversive messages. “Sly rebukes to heretics and politicians were conveyed in these sugared emblems,” writes Sidney Mintz in Sweetness and Power. Read more…

Speaking Candidly about Opioid Dependence and Legal, Safe Alternatives

AP Photo/Richard Vogel

Every ten minutes, an American dies from opioid abuse. In fact, drug overdose is America’s main cause of accidental death. And yet, as journalist Janet Burns points out at Forbes, “the U. S. assigns more favorable legal status to around 50 different opioids than it does to cannabis or psilocybin mushrooms.” Most of those 50 opioids are prescription drugs.

With disarming candor, Burns describes the way a seemingly routine painkiller script led her to full-blown dependence. Going into debt, having to move, buying drugs on the street to ward off withdrawal ─ her experience with prescription painkillers mirrors the experience of the majority of Americans’ who have opioid addiction disorder; four out of five American heroin users started their dependence with prescription medication. Burns uses her experience to make a case for the benefits of legal, accessible medical marijuana to treat the ailments that lead people to opioids. And she show the flaws in America’s war on drugs, which protects the pharmaceutical industry more than American citizens. In her words, “our laws for protecting people form dangerous drugs seem to have far less to do with safety and efficacy than you would hope.”

In the past few years, I’ve also had particular opportunity as a business writer to explore the costs of such policies, and to bring those numbers to light.

I found that cannabis — which currently costs the country billions per year in arrests and incarceration (not counting the cost of lives lost to opioid addiction or other treatable illness), and remains unavailable to millions of patients who need it, including family and friends of mine — stands to deflate the patent-prone pharmaceutical industry by at least $4 billion per year, according to estimates.

I discovered that comparatively cheap programs like syringe exchanges, low- or no-cost medication-assisted treatment and safer injection sites (a.k.a. supervised consumption spaces) have been shown to reduce public disorder, save lives and bring down the cost burden for police and hospitals.

And that the cost of the decades-old drug Naloxone, which reverses overdose, has risen right alongside opioid abuse.

 
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From One Friendship, Lessons on Life, Death, AIDS, and Childlessness

Left to right: Dan, the author, and Michael. (Photo courtesy of the author)

S. Kirk Walsh | Longreads | January 2018 | 27 minutes (6,711 words)

 

I first met Dan Cronin on an early spring evening in 1993. Michael, my new boyfriend, introduced us. We were standing on the southwest corner of 12th Street and Fifth Avenue in Manhattan. A stream of cabs, city buses, and cars surged toward the illuminated marble arch of Washington Square. The changing twilight danced through the rustling, pale-green leaves of the trees that shaded the grounds of the nearby church. “I’ve heard a lot of great things about you,” Dan said to me. His smile was angelic and mischievous, his eyes, a striking slate blue. He lit a Newport cigarette, a wisp of smoke releasing from the corner of his mouth.

That night, we decided on dinner at a family-run Italian restaurant in the West Village. The three of us talked about books (J. M. Synge, E. L. Doctorow), Catholicism (the religion of our childhoods), Arthur Ashe’s recent death from AIDS, Dan and Michael’s strong allegiances to Upper West Side. It was a memorable night. As I said goodbye to them at the 14th Street subway stop, I felt a kind of certainty and contentment as if I already knew that Dan and Michael were going to be a part of my life for a long time.

Prior to that night, Michael had also told me a lot about Dan: He was a professional tenor, who had performed on Broadway and national tours around the country. He was a voracious reader of American history, passionate about all things Abraham Lincoln, Muhammad Ali, and Michael Jordan. He was religious in his daily purchasing of lottery tickets. (He always played the same numbers; the street address of his childhood home.) He was employed as a waiter at the famed Russian Tea Room. (He was the shop steward of the union, and the powerful position allowed him to work only when he felt up to it.) Having recently visited his ancestral town in County Kerry, Ireland, he told a story of encountering a man who could recite passages of Ulysses in Gaelic.

Over the past year, Dan and Michael had become close friends. They had many lively discussions about sports and politics, but their true bond centered on their experiences with recovery, addiction, pain, and abuse. “He’s a remarkable man with many talents,” Michael said when he first told me about Dan. “It’s sad because he’s HIV positive.” Shortly after his diagnosis seven years earlier, Dan started taking high doses of AZT (zidovudine, the first antiretroviral drug approved by the FDA in 1987) as a part of his treatment protocol.

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How ‘Cops’ Became the Most Polarizing Reality TV Show in America

"Cops" screenshot
Another night, another arrest, on "Cops." (Cops.com/Langley Productions)

Tim Stelloh | The Marshall Project & Longreads | January 2018 | 25 minutes (6,325 words)

This story was published in partnership with The Marshall Project.

***

Morgan Langley leans toward a large computer screen. He isn’t sure if the video clip is still there, posted to a random YouTube channel named after a ’90s punk-ska act, but after a few moments, he finds it. Out of a black screen flashes a white Ford Mustang with blacked-out windows and chrome rims. Langley, who is an executive producer of one of America’s longest-running reality shows, “Cops,” narrates. “This kid here is actually selling a thousand pills of ecstasy to an undercover cop,” he says excitedly.

On the screen, a skinny white kid with a straight-brim baseball cap and a collection of painful-looking face piercings has plunked down on the Mustang’s passenger seat. Next to him is a woman whose blurred face is framed by sandy blonde hair. They briefly discuss logistics, and a second guy with dark skin and wrap-around sunglasses hops in. He asks if she has the cash; she asks if he has the goods. He asks if she’s a cop; she laughs.

“Okay, we’re just gonna do it like this,” he says, grabbing a pistol from his waistband. “Just give me your money.” Seconds later, officers in green tactical gear swarm the car, and he’s nose-down on the pavement, handcuffed and delivering a tear-streaked explanation: “Sir, they gave me a gun and told me they were gonna kill me.” Read more…