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25th May 2013

In October 2012 the California Court of Appeal in San Diego issued a landmark decision, People v. Jackson, that established the legality of medical marijuana storefront dispensaries under state law with the caveat that they cannot operate for profit. This issue put to rest the irrational argument often made by prosecutors that all storefront dispensaries are illegal under state law because they sell medical marijuana to their members. However, the decision brought up a host of new confusing issues on what constitutes “operating for profit.” Perhaps the most important aspect of this issue for the day-to-day operation of a medical marijuana collective is whether collective employees and members may legally be paid wages or a salary. After all, traditionally nonprofit organizations pay their employees–do you think the CEO of the Red Cross is just a volunteer?

Fortunately, on May 20, the Cailfornia Senate passed Senate Bill 439, which would amend section 11362.765 of the California Health and Safety Code to end this debate. The contents of this bill are refreshingly simple and make good sense. The language simply states that, as long as a collective or cooperative follows the Attorney General’s Guidelines, it can receive money from its members for “actual expenses incurred in carrying out activities that are in compliance with the [Attorney General’s Guidelines], including reasonable compensation incurred for services provided to the members or the organization.” Thus, the organization can take money from its members and use that money to cover expenses and pay wages: a simple, logical result.

On the whole, this is a small piece of the medical marijuana puzzle in California. However, this particular issue has plagued collectives and their members for years, leaving them unsure of whether they can even take money for overhead or pay for labor. By enacting this legislation, the Legislature would definitively resolve that issue and prevent needless, wasteful prosecution of collectives that are otherwise in compliance with state law.

Hopefully, the California Assembly will be voting on SB 439 in June or July and will approve the bill. Check back here for updates in the future.

 

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