Setting up a legitimate marijuana business in California is not without its hazards, but the details of what compliance looks like can be dizzying and the laws are about to change profoundly. Recreational or “personal” use of cannabis in California is on the horizon, but will it be too late for those getting late into that game?
Current Legislation
The Medical Marijuana Program Act (MMPA), in conjunction with the Compassionate Use Act (CUA), leave room for certain patients and caregivers to engage in collective cultivation and application of marijuana projects.
While that sounds great in theory, it is not so much law legalizing these activities but rather laws that immunize certain conduct from the reach of state law (feds can always still bust you). For example, the MMPA sets strict limits on the amount of medical cannabis that can be possessed and sold. The point of the collective is to produce only as much as needed for the members. This is the hallmark of a non-profit business. Marijuana for profit is strictly illegal in Cali.
New Law on the Horizon
The California Medical Marijuana Regulation and Safety Act – which is composed of three California bills- is going to take the regulation of medical marijuana to a new level. It will regulate the cultivation, dispensing and transport of marijuana. This law is going into effect in 2018 – but it will give preference for the purposes of licensing to medical marijuana business that are in good standing today!
Basic Information About Dispensaries in California
As mentioned above, a dispensary under current law must be a non-profit entity and the medical marijuana customers must also be members of the organization. Further, it is not enough to just file the right incorporating papers – you must also run the business so you are not producing more marijuana than your members need. In other words, you need to also act like a nonprofit collective too.
Other Business Information
Getting a license and structuring arrangements is a perilous endeavor in light of the current and future regulatory framework. The State of California may seem lax about medical cannabis as a matter of popular belief. The truth is, however, district attorneys are very active about prosecuting phony marijuana business and will most likely continue to take a very hard line for those thinking of cutting their own red tape.
Let’s not forget to mention the feds. While they are presently not taking a big role in busting people withing the state, they can and will prosecute offenders too. They could do this notwithstanding you following state law faithfully too, thanks to the Supremacy Clause and a very badly-written Controlled Substances Act (at least as it pertains to its classification of Cannabis).
Do You Need a Lawyer?
As much as I am a fan of keeping lawyers the hell out of my business, anyone who is halfway serious about starting any kind of legitimate marijuana organization really needs one. Moreover, given just how nuanced those laws are and the ever-present threat of getting your nice new dispensary sacked by the LAPD, for example, you also want an experienced one. For example, this So Cal firm seem pretty knowledgeable and legit based on our review. Always keep it legit!!!
