CA Medical Marijuana News

Aug 12, 2015 | Marijuana Legalization

Federal Marijuana Laws

Aug 12, 2015 | Marijuana Legalization

In the last ten years we have seen the Federal Government’s view on medical marijuana evolve.

In 2000 President George W. Bush campaigned that he would let states make decisions about medical marijuana, saying “I believe each state can choose that decision as they so choose.” The number of dispensaries increased throughout his term in office. However during this period the DEA continued to raid dispensaries often without the assistance from local law enforcement. This was not the ideal situation for medical marijuana providers – Federal minimum sentencing was still in full effect and a guilty conviction in Federal court would mean a stiff prison sentence.

Obama Administration – Change? Think again. (March 2009)

In March of 2009, after President Obama took office, federal Attorney General Eric H. Holder Jr. said the current administration was taking a new approach to federal drug laws and would end the frequent raids on distributors of medical marijuana that were commonplace during the Bush administration. Specifically, “Given the limited resources that we have, our focus will be on people, organizations that are growing, cultivating substantial amounts of marijuana and doing so in a way that’s inconsistent with federal and state law.” Everyone in the medical marijuana industry felt this was a giant win. Finally, providers and patients could breathe easy, for a little while, at least.

Prop 19 (November 2010)

On Nov 2^nd 2010 Californians voted on the legalization of marijuana for recreational use. U.S. Attorney General Eric Holder threatened to “vigorously enforce” federal marijuana laws even if California voters approved the ballot measure. In a letter to former Drug Enforcement Administration officials, Holder stated that Bottom of Form“the Department of Justice strongly opposes Proposition 19.” And if passed, he said, it “would provide a significant impediment to … efforts by law enforcement to target drug traffickers who frequently distribute marijuana alongside cocaine and other controlled substances.”

Unfortunately, Proposition 19 lost 46.2% to 53.8%, but that showed that a substantial number of Californians want change and feel that there are many positives that would come from legalization. Our fingers are crossed that a modified proposition for legalization will pass in the near future.

Federal Prosecutors Attack Property Owners (October 2011)

In early October, 2011, the federal government did an about-face. At a news conference in Sacramento, Andre Birotte Jr., the Los Angeles-based U.S. attorney for the Central District, stated that (his) Southern California region is home to the highest concentration of dispensaries in the nation. “We have yet to find a single instance in which a marijuana store was able to prove that it was a not-for-profit organization,” he said.

“That is not what the California voters intended or authorized, and it is illegal under federal law,” he said. “It does not allow this brick-and-mortar, Costco-Walmart-type model that we see across California.”

California’s four federal prosecutors also sent a number of letters to the property owners of these dispensaries, giving them two weeks to shut down. This same tactic was used by the Bush administration to successfully close a number of dispensaries in 2007. The feds can legally seize these properties through civil forfeiture if push comes to shove. According to the letters signed by U.S. Attorney Laura Duffy in San Diego, “Real and personal property involved in such operations are subject to seizure by and forfeiture to the United States … regardless of the purported purpose of the dispensary.” Luckily, most of the recently sent letters were nothing more than empty threats.

Federal Government Closes Down Dispensaries and Threatens To Seize Property (April 2012)

In April 2012, the DEA raided and shut down Oaksterdam University, the main medical cannabis industry trade school that was founded by Richard Lee in Oakland, California. A number of dispensaries and grow facilities were also raided in Southern California around that time. In early May of 2012, federal agents raided two dispensaries in Santa Barbara and issued cease and desist letters to the ten remaining dispensaries in town. These dispensaries were given two weeks to shut down or face criminal prosecution and the loss of property. The federal government stopped making threats and is attacking the marijuana industry at a previously unseen level.

According to Americans for Safe Access, since the Obama administration has been in office, they have unleashed an interagency cannabis crackdown that goes beyond anything seen under the Bush administration, with more than 100 raids, primarily on California pot dispensaries, many of them operating in full compliance with state laws. Since October 2009, the Justice Department has conducted more than 170 aggressive SWAT-style raids in medical marijuana states, resulting in at least close to a hundred federal indictments.

Voter Approved initiatives in Colorado and Washington to Legalize marijuana (November 2012)

Colorado passed Proposition 64 and Washington passed Initiative 502 making it legal for anyone over the age of 21 to possess marijuana and for businesses to sell it. This took some pressure off the California medical marijuana as the Feds had a bigger problem to deal with. The federal government was adamantly opposed to these initiatives and stated they would continue to enforce Federal marijuana laws. This feds were put in a difficult position and something had to give.

In August of 2013 the Justice Department issued a statement saying it won’t challenge state laws that legalize marijuana and will focus federal enforcement on serious trafficking cases and keeping the drug away from children. The US Attorney General notified the governors of Colorado and Washington and said they will not seek to pre-empt those states’ laws allowing recreational marijuana use.

Federal prosecutors were directed to refocus on eight enforcement priorities, including preventing marijuana distribution to minors, preventing drugged driving, stopping drug trafficking by gangs and cartels and forbidding the cultivation of marijuana on public lands.

For entities operating in the marijuana business, the government expects “robust controls and procedures that are effective in practice (not just on paper). The size and profitability of these businesses will still be a factor prosecutors can consider, but there also must be additional illegal activities for prosecutors to take action.

Current Situation

With the recent legalizations in Colorado, Washington and now Oregon we are entering unchartered territory for marijuana industry and it is a great time to be a part of it. The federal government appears to be backing off a bit. In a January 2014 article in the New Yorker magazine President Obama stated that he didn’t “think (marijuana) was more dangerous than alcohol.” A few days later the deputy director of the White House’s Office of National Drug Control Policy, Michael Botticelli, reluctantly agreed.

So it looks like the pendulum might be swinging back in our favor and medical marijuana (and marijuana in general) is gaining more mainstream acceptance. However you still need to stay vigilant as the Feds have said one thing and done another too many times in the past. There are still many years and milestones ahead for a national legalization. Keep in mind local police departments have their own agendas and can create just as many problems for you. Stay apprehensive, don’t take anything for granted and keep yourself out of trouble.

(December 2014)bipartisan Rohrabacher-Farr amendment which prevents the federal government from using funds to arrest and prosecute medical marijuana patients or distributors who are in compliance with their state’s laws. Some argue that this bill wasn’t written very clearly and leave some loop holes for the DEA to exploit. This was suppose to be a message from the House to back off legitimate medical marijuana providers.

How to Start a Medical Marijuana Dispensary

Aug 11, 2015 | Marijuana Legalization

[as-accordion autoclose=”false” openfirst=”false” clicktoclose=”true” tag=”h4″]
[as-accordion-item title=”1. Create a (not-for-profit) business plan or outline of what you want to accomplish”]

1. Determine your goals and specific features that will help you accomplish them
2. Decide between a storefront dispensary or mobile MMJ delivery service (or combination of the two)
3. Find a mentor to help make a game plan and can help you along the way
4. Partner with qualified trustworthy individuals

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[as-accordion-item title=”2. Read and understand CA MMJ Laws and local regulations”]

1. Senate Bill 215 or The Compassionate Use Act of 1996
2. California Proposition 420 – The Medical Marijuana Program Act
3. 2008 California Attorney General’s Guidelines for “The Security and Non-Diversion of Marijuana Grown for Medical Use”

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[as-accordion-item title=”3. Determine where you will operate”]

1. Many cities/counties add their own unique laws with regard to medical marijuana “business”
2. A list of California local regulations
   http://www.safeaccessnow.org/california_local_regulations
3. Some cities have banned MMJ dispensaries
4. You will have to weigh the pros and cons of working in an area with a lot of competition (as there are a number of MMJ dispensaries or delivery services) versus venturing into an area where the politics are less accepting.

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[as-accordion-item title=”4. Obtain your doctors recommendation to use medical marijuana.”]

1. Under Prop 215 individuals may use marijuana to treat “cancer, anorexia, AIDS, chronic pain, spasticity, glaucoma, arthritis, migraine headaches , or any other illness for which marijuana provides relief.” It is the last one that allows doctors almost unlimited possibilities to prescribe this herb.
2. A doctor’s recommendation to use MMJ exempts qualified patients from criminal liability for possessing or cultivating marijuana when these conducted pursuant to the recommendation.
3. Doctor’s recommendations typically need to be updated annually

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[as-accordion-item title=”5. Speak with a qualified MMJ attorney in the local area that you will be operating.”]

1. As you have likely found through your research, there is more than one way to operate a legally under CA law. Ask the attorney how they would start a medical marijuana dispensary. The local law enforcement might have their opinions on how a “legal” operation should be set up. Do whatever you can to become compliant in their eyes. This is where a respected MMJ attorney is worth every penny.
2. If nothing else have an attorney’s name and number that you will call in case of emergency. You don’t want to be scrambling to find someone in the heat of the moment.

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[as-accordion-item title=”6. Determine what entity will best suit your plan”]

1. There isn’t one right answer for how to set up your MMJ entity. It is required that the entity function as a “not-for-profit” similar to how typical non-profit entities operate.
2. Senate Bill 420 authorized patient “cooperatives” or “collectives” to grow, distribute and/or sell medical marijuana on a non-profit basis to their members.
3. From the less involved articles of association to incorporating as a Mutual Benefit not-for-profit corporation.
4. Cooperative or “co-ops”

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[as-accordion-item title=”7. Obtain a Sellers Permit from the Board of Equalization (BOE)”]

1. Unfortunately medical marijuana is taxable and the CA BOE issued a memo regarding this matter. It is just not worth trying to take an alternative approach on this one. At the current base rate of 7.5% you don’t want to be playing catch up or get hit with a bill for back owed tax. This could be detrimental to the organization and you in general

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[as-accordion-item title=”8. Seek like minded members of for your organization”]

1. Use professional, adult focused, advertising methods
2. Use discretion based on your location
3. Seek word of mouth referrals

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[as-accordion-item title=”9. Get patients/members to join your organization”]

1. Verify that members are eligible under CA law to use medical marijuana/ join a Collective
   1. Are they a California Resident
   2. Do they have a current Doctor’s Recommendation
   3. Verify CA ID matches the name on the recommendation
   4. Call the doctors office to verify the recommendation is valid
2. Have individuals sign a Collective Membership Agreement
   1. Identify the current state and local laws the individual must follow along with additional guidelines set up by the organization
   2. The agreement will ensure that the medical marijuana purchased is for the individuals use and that they will not divert the medicine to others or resell.
3. Make sure individuals understand the agreement they are signing and what is expected of them.
   1. Make it clear that they can be removed from the organization for violating its policies.
   2. Keep a copy of the members ID, recommendation and signed Collective agreement

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[as-accordion-item title=”10. Keep detailed records of expenses and purchases.”]

1. MMJ businesses will be looked at with extra scrutiny given the nature of the product and that they deal with a lot of cash. Keep accurate, easy to follow, up to date records. This will help you keep a finger on the pulse of the business and also be prepared for inquiries as they arise from various agencies.
2. As the founder of the collective you are entitled to reasonable compensation for your time and effort. Keep in mind profits are not allowed. Any earnings left after all expenses have been paid should be returned to the member or used to benefit the group as a whole.
3. Pay all sales taxes, Employer (EDD) payroll taxes (if applicable), IRS Federal taxes and CA FTB state income taxes

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[as-accordion-item title=’11. Develop a “What if” emergency plan and be prepared.’][/as-accordion-item]
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