California Attorney General Guidelines

August 2008

In 1996, California voters approved an initiative that exempted certain patients and their primary caregivers from criminal liability under state law for the possession and cultivation of marijuana. In 2003, the Legislature enacted additional legislation relating to medical marijuana. One of those statutes requires the Attorney General to adopt “guidelines to ensure the security and
nondiversion of marijuana grown for medical use.” (Health & Saf. Code, § 11362.81(d). 1) To fulfill this mandate, this Office is issuing the following guidelines to (1) ensure that marijuana grown for medical purposes remains secure and does not find its way to non-patients or illicit markets, (2) help law enforcement agencies perform their duties effectively and in accordance
with California law, and (3) help patients and primary caregivers understand how they may cultivate, transport, possess, and use medical marijuana under California law.

……in a nut shell…….


The California Attorney General has stated:

Seal of California

Seal of California

Under California law, medical marijuana patients and primary caregivers may “associate within the State of California in order collectively or cooperatively to cultivate marijuana for medical purposes.” (§ 11362.775.) The following guidelines are meant to apply to qualified patients and primary caregivers who come together to collectively or cooperatively cultivate physician-recommended marijuana.

“It is the opinion of this Office that a properly organized and operated collective or cooperative that dispenses medical marijuana through a storefront may be lawful under California law, but that dispensaries that do not substantially comply with the guidelines set forth in sections , are likely operating outside the protections of Proposition 215 and the Medical Marijuana Program (SB 420), and that the individuals operating such entities may be subject to arrest and criminal prosecution under California law.”

Collectives (page 8 ): California law does not define collectives, but the dictionary defines them as “a business, farm, etc., jointly owned and operated by the members of a group.” (Random House Unabridged Dictionary; Random House, Inc. Applying this definition, 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.

Business Forms (page 8 ): Any group that is collectively or cooperatively cultivating and distributing marijuana for medical purposes should be organized and operated in a manner that ensures the security of the crop and safeguards against diversion for non-medical purposes. The following are guidelines to help cooperatives and collectives operate within the law, and to help law enforcement determine whether they are doing so.

Storefront Dispensaries (page 11 ): Although medical marijuana “dispensaries”
have been operating in California for years, dispensaries, as such, are not recognized under the law. As noted above, the only recognized group entities are cooperatives and collectives.

Statutory (page 8 ): A cooperative or collectives must file with the state and conduct its business for the mutual benefit of its members (that means non-profit). (Corp. Code, § 12201, 12300.) Cooperative corporations are “democratically controlled and are not organized to make a profit for themselves, as such, or for their members, as such, but primarily for their members as patrons.”

Sales Tax, and Seller’s Permits (page 9 ): The State Board of Equalization has determined that medical marijuana transactions are subject to sales tax, regardless of whether the individual or group makes a profit, and those engaging in transactions involving medical marijuana must obtain a Seller’s Permit. SO, IF YOU HAVE TO PAY SALES TAX, HOW DO EXCEPT DONATIONS? Is the collective you are a member of accepting donations and paying sales tax on donations?? (If that makes sense, the 2 day seminar will be free to whoever can prove us wrong).

Just some free food for thought. Do you want to know what all that means for YOU??? Do you want to know what it takes and how to start and grow a legal medical marijuana business in California??? enroll in 420 College.