This article explains the core requirements of a Collective model and the compensation for growers. It gives a brief of how the growers should be compensated for their contribution.
The state allows “collective” growing medical marijuana in California, but can a so called seriously ill or handicapped person run a garden? Unfortunately some people are not physically capable to grow medical marijuana. Members’ “contributions” will mainly be in the form of money, but the collective should allow members to contribute and volunteer in various ways. A mixed group of people from various professions was a good recommendation for a group.
The change happened – Collective members don't have to participate in the "growing"
Until early 2012 California district attorneys were prosecuting collectives that only had a small percentage of members assisting with the growing of marijuana. Luckily, in February of 2012 Los Angeles’ 2nd District of Appeals overruled a landmark case (The People v. Colvin). This decision rejected this notion that the California DA’s were using. The
original conviction of Colvin was because the collective he founded had close to 5,000 members and only a small number of growers (14 to be exact), which the California Attorney General said was insufficient. Colvin was not allowed to use the medical (marijuana) defense and was convicted of operating outside the medical marijuana guidelines. The Court of Appeals felt it was unjust to impose different requirements to the two.
Expense reimbursement and Compensation for the growers
This is one of the most important areas of collective operations to understand and be in control of. Since a legal marijuana dispensary / collective is not supposed to be a profit making entity under the California marijuana laws, all monetary transactions are required to be documented very carefully. Ideally, a legal marijuana dispensary / collective with the help of a small management team, grow all the medicine for its patient base as per the requirements for medical marijuana. There are no specific laws as per the California medical marijuana guidelines on how collectives and cooperatives should document each member’s contribution but are required to track and record the source of their marijuana,” per the attorney general’s guidelines.
Determining Reimbursement for Member Growers
Since the California marijuana laws require that every dispensary be a non-profit making entity, the business model is based on expense reimbursements. Growers should only be reimbursed for the expenses they incurred while growing the medicine and a “reasonable compensation for their effort. A dispensary is required to collect and keep a track of all the growers’ bills making this a very time consuming with requirements for significant storage area.
The grower should keep a detailed log of the hours they are allocating to each grow. The grower should include all direct expenses (clones, nutrients, soil, etc.) as well as allocations for electricity, rent, labor, and travel costs. Depending on the quality of the product, the grower should be willing to reduce their wage to make the transaction reasonable to the collective.