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Are Medical Marijuana Dispensaries Allowed to Operate as Store Fronts?

Compensating Marijuana Growers for the Risk

 

What is reasonable compensation for the investment, labor, and risk incurred by the caregiver?

This leaves the question of what is “reasonable compensation” for the investment, labor, and risk incurred by the caregiver alone. There are no legally established standards for wages for marijuana growers or sellers as there are for government workers. Therefore we have to look elsewhere for guidance.

Some people have sought to compare the reasonable wages of the caregiver against those of the gardener. The argument is that this is just another form of gardening, so the compensation should be low.

The first problem with this argument is that growing saleable marijuana (i.e., marijuana that people would be willing to smoke) is not as easy as growing marigolds. The average gardener can grow crap but nobody wants to smoke crap. Growing the good stuff, and nursing it through all the problems that can happen to a crop takes more skill.

The Risk

The second problem with that comparison is the risk. One of the factors in determining “reasonable compensation” in business is the risk involved in the enterprise.

All enterprises suffer a risk of failure with the loss of any invested capital and labor. That risk is quite high with any new enterprise, even if the enterprise does not have the issues associated with medical marijuana. As part of planning for the risk, the enterprise must accumulate cash reserves over and above current expenses to protect against unforeseen problems and to provide for maintenance and replacement of equipment.

In addition, part of the compensation must be a “reasonable” return on the expenditures considering the risk of the investment. After all, this is not like putting money into a bank account. Providing marijuana shares all the risks of any conventional enterprise, as well as the many risks faced by farmers. In addition to all the risks faced by any other farming or business enterprise, medical marijuana providers face the unique risk that the Federal Government, or even the local police, will seize all their property and seek to put them in prison for life. If we were to offer such a risk to any insurance company, the premium would be off the charts. The question of what is “reasonable compensation” to risk property seizures and criminal prosecution is one that can only be answered by the brave few who will attempt it.

 

 

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