Despite the fact that
scores of medical cannabis dispensaries,
clubs, and delivery services are currently in
business in California, the sale of medical
cannabis is strictly illegal under federal
law. Under state law, sale is generally
illegal. However, non-profit
"distribution" may be allowed in
certain cases for patient cultivation
co-ops and small-scale caregiver gardeners.
Under federal law,
sale, cultivation and possession of marijuana
remain strictly illegal. The DEA
has raided dozens of medical marijuana
growers, clubs and caregivers in
California since the enactment of Prop. 215.
For the most part, the targets have been
either high-profile activists who have
attracted publicity, or commercial-scale
growers whom local law enforcement have
decided to turn over for federal prosecution.
Under state law,
Compassionate Use Act of 1996 (Prop. 215)
exempts patients and their primary caregivers
from criminal prosecution for personal
possession and cultivation of marijuana, but NOT
for distribution or sale to others.
State law was
expanded in 2004 by a new law, SB
420 (Health & Safety Code 11362.7-8),
which (1) authorizes caregivers who
provide marijuana to patients to be
compensated for the costs of their services,
though not on a for-profit basis; and (2)
allows patients to form cultivation
"cooperatives." On careful
examination, however, neither of these
provisions provides a green light for sales of
cannabis. Those dispensaries that are
selling marijuana over the counter accordingly
do so at the tolerance of local authorities.
Note that there have been instances where
hostile local law enforcement agencies have
busted medical cannabis dispensaries and
charged their personnel with illegal
distribution or sales.
For a list of
patients' groups and dispensaries, see www.canorml.org/prop/cbclist.html.
caregiver" is narrowly defined under
Prop. 215 to be "the individual
designated [by a legal patient] who has
consistently assumed responsibility for the
housing, health, or safety of that
person." The law does not
explicitly allow for multiple caregivers.
While caregivers may serve more than one
patient, a new provision in SB 420 has made it
illegal for them to have more than one patient
outside their own "city or county."
While the constitutionality of this provision
is debatable (not only does it seem to
override Prop. 215, but the restriction to a
single "city or county" is
ambiguous) prospective caregivers should
beware of trying to serve large geographical
the courts have held that cannabis clubs
cannot serve as legal "primary
caregivers" for large numbers of
patients. Some persons have
claimed caregiver status while growing for
multiple numbers of patients on the theory
that they are providing for their patients'
health or safety. This defense has been
successful in court for caregivers growing for
small numbers of patients. However, it
was explicitly rejected by a state court of
appeals in the Peron decision, where
the court held that Peron's San Francisco
Cannabis Buyers' Club could not reasonably
claim to function as a "primary
caregiver" for its 8000 clients.
medical cannabis providers who cater to
walk-in clients should not hope to rely on the
caregiver provision. Caregiver
growers should limit themselves to a select
membership list of local clients whom
they personally know and who do not have other
caregivers. Within these constraints, SB
420 allows caregivers to be compensated for
the costs of their services, but does NOT specifically
authorize distribution or cultivation
SB 420 encourages
access to medical marijuana through
"collective, cooperative cultivation
projects. " Unfortunately, it
provides no guidelines or explanation as to
how these should operate.
Presumably, the basic model is a group of
patients and caregivers who plant a garden
together and share the crop among themselves.
The cultivation cooperative model does not necessarily
envision walk-in clients, nor retail sales of
medicine to members. Co-ops may be
supported by participation in work, donations
or membership fees. Under one
model, co-op patients pay a set gardening fee
for a certain part of the crop, and receive
the harvest at no further charge. Unlike
caregivers, collective gardens aren't limited
to patients from the same "city or
A notable example
of a patients' collective is the Wo/Men's
Alliance for Medical Marijuana in Santa Cruz
WAMM has over 200 seriously ill members
who cultivate a collective garden and attend
to each others' health and personal needs.
In 2004, WAMM won a federal injunction
protecting their right to cultivate under the Raich
decision (see below). This did not stop
the DEA from busting another collective garden
Medicinal Gardens, whose operator was
engaged in large-scale cultivation (30,000
plants) for some 2,000 ≠ 3,000 patients.
The WAMM injunction was voided in 2005 by the
Supreme Court's Raich decision.
Two examples of
patients' providers officially structured as
"cooperative" corporations under
California law were the Oakland Cannabis
Buyers' Cooperative and Los Angeles Cannabis
Research Center. Both would have been legal
under SB 420, but both were shut down by the
Under the U.S.
Controlled Substances Act (CSA), marijuana is
currently classified as a Schedule I drug,
meaning that it has no accepted medical use.
The federal government has interpreted the law
strictly to mean that all marijuana is illegal
regardless of state laws like Prop. 215. The
federal law was upheld by the U.S. Supreme
Court in the case Raich
v Gonzalez (2005), where it ruled that
the CSA's ban on posssession and cultivation
did not exceed the federal government's
constitutional authority under the interstate
commerce clause even in the case of private,
personal use by patients. While further
constitutional challenges to the CSA are being
pursued in federal court, medical marijuana
remains completely illegal under current
The Supreme Court
rejected a prior, 2001 challenge to the
federal law by upholding an injunction
ordering the Oakland
Cannabis Buyers Cooperative and five
other cannabis clubs to cease operations.
The court overturned a Ninth Circuit Court of
Appeals ruling that the OCBC was
entitled to a "medical necessity"
defense for distributing marijuana to its
members. While the court ruled for the
government on the procedural grounds that the
CSA did not allow for a necessity
defense for distributors, it left open the
question whether individual patients might
invoke a necessity defense.
weapon against medical marijuana is property
forfeiture. Federal law allows the government
to forfeit real estate from owners or
landlords who let it be used for marijuana
distribution or cultivation. The DEA
successfully used forfeiture against the Los
Angeles Cannabis Resource Center in 2001.
The LACRC's building was actually owned by the
city of West Hollywood, which had bought it as
a gift for the club. The government had
no trouble taking possession of it by means of
forfeiture, effectively closing the LACRC.
More recently, the government invoked
forfeiture to close the Capitol
Compassionate Care center in Roseville and
to force a landlord to evict another
dispensary in West Hollywood. The DEA
has threatened to employ forfeiture more
widely. So far, the chosen targets have
mostly been facilities that actively sought
publicity through the media or advertising.
Dispensary operators are advised to operate
discreetly to avoid DEA attention.
Despite the shaky
legality of dispensaries, many cities and
counties have enacted ordinances aimed at
zoning, regulating, or limiting them.
Some localities have enacted moratoriums
banning new dispensaries altogether, including
numerous towns in the Central Valley area and
the Peninsula. Others, including
Alameda County, Hayward, Berkeley, Santa Rosa,
West Hollywood, and Oakland, have put a limit
on the number of dispensaries in their
area. A few cities, including San
Francisco, Oakland, West Hollywood, and Santa
Rosa have established licensing schemes for
dispensaries. Strict zoning
regulations are in effect in many localities.
Other regulations that have been adopted
include banning on-site consumption and
limiting the quantity of marijuana that can be
sold or kept on hand. Local regulations are
constantly evolving. For the latest
information, check with local officials.
in opening a medical cannabis facility should
be wary about consulting with local
authorities. Many towns have moved to ban
dispensaries after receiving inquiries from
prospective operators. However, anyone
planning to open a storefront dispensary
should seek a business license and
comply with local zoning regulations. It is
especially important that dispensaries be
appropriately sited so as not to disturb
neighbors. Neighborhood complaints are the
number one cause of police raids. Dispensaries
should also be sure that their landlords are
comfortable with what they are doing. Landlord
complaints are another leading cause of
been organized in various ways: as sole
proprietorships, partnerships, non-profit
cooperatives or corporations.
Because SB 420 does not specifically protect
for-profit operations, non-profit
organizations are probably safer.
Prospective operators are advised to consult a
The state Board of
Equalization has ruled that medical cannabis
sales are subject to sales tax, regardless of
their legality. (This is consistent with
California law, under which medicinal herbs
are generally taxable. The only medicines that
are not taxable are those provided in licensed
pharmacies with a physician's prescription.)
providers are strongly advised to consult an
attorney. The following attorneys are familiar
with the law on cannabis cooperatives,
patients' groups, dispensaries, etc.