Hundreds of medical cannabis Collectives, Dispensaries, Co-ops, and Delivery services are currently operating in California. Although many are operating in legal accordance with state and local law, the sale of medical cannabis remains strictly illegal under federal law, and the D.E.A. has conducted scores of raids against medical cannabis businesses in the last 15 years.
On Aug. 25, 2005 the California Attorney General’s office issued new guidelines for medical marijuana enforcement explaining its interpretation of SB 420 and Proposition 215. Although not strictly binding as law, they provide a good indication of how the AG wants to proceed with state enforcement.
“Collectives must serve only verified legal patients, and distribute only to their own members”.
Beyond this, the guidelines specify that collectives should use only marijuana legally grown or obtained by their own members, with no purchases from outside their membership. This requirement is questionable, since there is nothing in state or federal law banning the purchase of marijuana, medical or otherwise, from any source (the law bans possession, not purchase, and possession is protected under Prop. 215). However, this problem can be avoided by including all growers and suppliers as members.
The guidelines also state that dispensaries should document their activities, and specifically “track and record” the source of their marijuana. This too is outside the requirements of Prop 215 and SB 420. While good record-keeping is always advisable as a business practice, keeping records on growers and vendors poses obvious problems given the threat of federal prosecution. Until federal law is reformed to protect medical marijuana suppliers, collectives need to be careful to not incriminate themselves or members of the collective. Just one of the many issues Start Your Collective, Inc will handle for you.
California state law explicitly allows distribution of medical marijuana through non-profit “collectives” or “cooperatives.” This is the way storefront dispensaries should be organized. While some dispensaries are currently organized otherwise, as sole proprietorships, partnerships, or for-profit businesses, such arrangements are not advisable, since they are not permitted under SB 420 or the Attorney General’s guidelines.
“Cooperatives” are explicitly defined in California law. Cooperatives must file articles of incorporation with the state and be organized in accordance with provisions spelled out in the state Corporations or Food and Agriculture code.
“Collectives” are vaguely defined in statutory law.
According to the Attorney General’s guidelines:
“A collective should be an organization that merely facilitates the collaborative efforts of patient and caregiver members – including the allocation of costs and revenues. As such, a collective is not a statutory entity, but as a practical matter it might have to organize as some form of business to carry out its activities. The collective should not purchase marijuana from, or sell to, non-members; instead, it should only provide a means for facilitating or coordinating transactions between members.”
One might infer that “collective” refers to any organization of multiple patients. Unfortunately, the guidelines provide no explanation as to how these should operate. Presumably, the basic model is a group of patients and caregivers who plant a garden together and share the crop among themselves. The cultivation collective model does not necessarily envision walk-in clients, nor retail sales of medicine to members. Collectives may be supported by participation in work, donations or membership fees. Under one model, patients pay a set gardening fee for a certain part of the crop, and receive the harvest at no further charge. Similar to a golf membership.
Although state law has no explicit provision for delivery services, they can be justified on the grounds that many patients lack transportation and cannot grow for themselves.
Prop 215 allows individual patients and their caregivers to possess & cultivate as much as required for the patient’s own medical use. Because this criteria is vague and open to differing interpretations, it is difficult for patients and police to judge beforehand whether a particular garden is legal. All too frequently, police take a stingy interpretation of the law and bust patients or caregivers for gardens they deem excessive, thus leaving the matter to be settled in court at the defendant’s expense.
The question remains as to how much medical marijuana cooperatives and collectives are allowed to grow or possess. Due to a recently appealed limitation on amounts of patient medication, currently there are no set patient limits. Rather showing a consistent relationship with the patient will allow higher amounts per caregiver. However, some counties and cities have established a maximum cap on the size of collective gardens: for example, San Francisco does not allow more than 99 plants in any case. Federal mandatory minimums begin at 100 plants or more.
New federal recommendations have been released as of October 19, 2009. The Obama Administration has not authorized the medical use of Marijuana, but is merely tolerating it, not legalizing it’s use. It simply states that IF patients and their caregivers abide by all state laws that they should not be targets for investigation or prosecution.
The Memorandum states in part as follows:
“No State can authorize violations of federal law, and the list of factors above is not intended to describe exhaustively when a federal prosecution may be warranted. Accordingly, in prosecutions under the Controlled Substances Act, federal prosecutors are not expected to charge, prove, or otherwise establish any state law violations. Indeed, this memorandum does not alter in any way the Department’s authority to enforce federal law, including laws prohibiting the manufacture, production, distribution, possession, or use of marijuana on federal property. This guidance regarding resource allocation does not “legalize” marijuana or provide a legal defense to a violation of federal law, nor is it intended to create any privileges, benefits, or rights, substantive or procedural, enforceable by any individual, party or witness in any administrative, civil, or criminal matter. Nor does clear and unambiguous compliance with state law or the absence of one or all of the above factors create a legal defense to a violation of the Controlled Substances Act. Rather, this memorandum is intended solely as a guide to the exercise of investigative and prosecutorial discretion.”
The guidelines note that storefront “dispensaries” are not explicitly recognized in state law, but that a “properly organized collective or cooperative” may legally dispense medical marijuana through a storefront provided it complies with certain conditions. The guidelines do not envision dispensaries operating as patient “caregivers,” nor as for-profit businesses.