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California medical marijuana industry seeks to operate "for profit"

by Wes Messamore, published

In California, medical marijuana dispensaries are required by state law to operate as non-profit "collectives" of legal medical marijuana patients who simply cover the costs of distributing the plant or edible products made from it. In the aftermath of dozens of raids on dispensaries that were illegally profiting from the sale of marijuana over the last year, the medicinal marijuana industry is calling for new laws that would allow dispensaries to operate as for-profit enterprises.

Many industry advocates are saying the raids happened as a result of vague California laws that do not clearly define proper accounting procedures for dispensaries, allowable salary levels, or illegal profiting. The Sacramento Bee reports the opinion of one Hollywood attorney specializing in marijuana cases who said: "Unfortunately 'profit' isn't defined, and there is no definition of 'nonprofit.'" And Assemblyman Tom Ammiano (D-San Francisco) says that the radically different approaches to dispensaries- which are allowed to operate in some cities, but are raided in others- shows the need for clear, statewide regulations to create a more "cohesive response."

In addition to clearer statutes, lawmakers, advocates, and industry leaders are calling for the creation of some kind of statewide oversight panel to regulate marijuana dispensaries. Sacramento lawyer, George Mull is lobbying the State Legislature to create what he's calling a "California cannabis commission" to oversee all of California's dispensaries. If the state adopts some of these measures, especially permitting California dispensaries to operate as for-profit businesses, it will end up creating rules similar to those in Colorado, another state notorious for its booming medical cannabis industry.

I actually spent the month of January in Colorado, using some of my time there to investigate its medical marijuana laws and policies. I found the medicinal marijuana industry booming in the sleepy city of Boulder, Colorado, nestled among the foothills of the Rocky Mountains. I saw many (often creatively-decorated) dispensaries nearly everywhere I travelled. My good friend and host for the month, a graduate student at the University of Colorado, even showed me a campus coupon book, which contained coupons from a local dispensary for a "FREE JOINT" with any purchase, and "$10 OFF YOUR NEXT QUARTER OUNCE." I laughed and said:

     "So this is what we can look forward to if marijuana becomes legal for recreational use everywhere else over the next few years."

Despite marijuana's strictly medicinal use as far as the law is concerned, the for-profit status of Colorado dispensaries is apparent in the conspicuous commercialization of the plant there. Suppliers and licensed physicians who can charge for clinic visits also seem all-too-eager to cash in on the profits by making it easy to get a physician's recommendation for a medical marijuana card. But is commercializing the drug no better than street "drug-dealing" as one California state official commented? Big pharmaceutical companies make enormous profits from an assortment of legitimate medicines every year.

The question is: why should cannabis be any different? And if it shouldn't be, is a whole new regulatory agency the best way for California to address the problem of raids on marijuana profits, especially as it works to streamline government to address a budget in severe crisis?

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