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Are Medical Marijuana Dispensaries Allowed to Operate as Store Fronts?

The Real Issue - Profits


But the issue isn’t really with the choice of real estate for a meeting place or the distribution of fliers on the street. The issue comes from a combination of a large number of patients, and the compensation each provides to the caregiver. The issue comes from dispensaries operating as ordinary businesses. The issue, in a nutshell, is the pursuit of profits.

There are two kinds of enterprises in law – “for profit” and “non-profit”. The purpose of Proposition 215 and SB 420 was to establish a legal system where people with a medical need could obtain marijuana in a safe and hopefully “reasonable” manner. If the general public intent can be safely summarized, it was to protect sick people rather than to allow someone to open a marijuana store. The openly expressed hope of many people was that the needs of patients would be taken care of by some loving combination of good friends and like-minded bands of compassionate compatriots who would volunteer their labor and pool their resources to provide for the collective non-profit good. The reality is that perhaps $50 billion of marijuana is sold in the US each year but the fond hope was that somehow the needs of the patients could be addressed separately from those issues.

Non-profit medical care is a noble idea but it somewhat overlooks the reality that growing a consistent supply of medical grade marijuana requires a level of effort, expense, and skills not universally available in either the patient or the primary caregiver population. While a purely volunteer system would be morally laudable from the profit standpoint, such a system would always be an unreliable source of medicine to patients.

Lately, some dispensary owners have been caught with large amounts of cash and other possessions that indicate a level of wealth considerably better than the average. It somehow offends the sensibilities to think that someone may be driving an expensive sports car with the profits earned from people in wheelchairs. It would be fair to say that most people did not envision hundreds of establishments that are more like liquor stores than caring friends or family members.

The Real Moral and Legal Question - Profits

This brings us to the real moral and legal question: Can a caregiver operate with the intent of making a profit?

According to SB 420: (c) A primary caregiver who receives compensation for actual expenses, including reasonable compensation incurred for services provided to an eligible qualified patient or person with an identification card to enable that person to use marijuana under this article, or for payment for out-of-pocket expenses incurred in providing those services, or both, shall not, on the sole basis of that fact, be subject to prosecution or punishment under Section 11359 or 11360. (11362.765(c))  See SB420

 In short, caregivers shall not be subject to prosecution solely because they received “actual expenses, including reasonable compensation for services provided.” That is, what would otherwise be an illegal sale of marijuana is exempted from prosecution, even though money and marijuana have changed hands. The law states that “reasonable compensation” shall not be cause for prosecution – leaving the implication that “unreasonable compensation” would fall outside the bounds of protection, and thus be subject to prosecution.




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