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Are Medical Marijuana Dispensaries Allowed to Operate as Store Fronts?

Profits -- Good or Bad?


What is "Reasonable Compensation?

Thus, the question is: What is "reasonable compensation for services provided?" Does “reasonable compensation” include “profits?” If so, when are such profits “reasonable” or “unreasonable?”

The law says specifically that out-of-pocket expenses are included. Obviously, if someone is growing for a patient, then out-of-pocket expenses would include the cost of the planters, the soil, the fertilizer, and other related items. If the provider chose to grow indoors or use hydroponics, then the out-of-pocket expenses for light fixtures and growing equipment could be considerable. Likewise with the electricity required to operate the lights, and for the air conditioning required to mitigate the heat from the lights.

It would also be an out-of-pocket expense if they rented and/or improved some place specifically for the purpose of providing this service. They produce a product that has a high value in the market place and carries the risk of Federal prosecution if discovered, among other special considerations. Therefore, it would be completely reasonable to expect that the expenses for such a secure facility could be considerable, even aside from the expenses required for growing. The same applies to other fixtures and equipment required to process it, store it, and make it available to patients.

Out-of-pocket expenses could also include cars and other vehicles. Some dispensaries provide a delivery service. The use of the cars is just as much an out-of-pocket expense for the dispensaries at it is for any pizza delivery service. Naturally, the expenses would also include the wages earned by the driver and anyone else who assists the caregiver in providing the medical marijuana. In short, out-of-pocket expenses could include quite a lot.

There is no requirement in the law that anyone in the chain of supply to the caregiver takes any less than the fair market value for their goods and services, which includes their markup and normal business profit. Even if the caregiver cannot make a profit, it is clear that anyone who provides goods or services to the caregiver is entitled to a profit, the same as any other business.



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