Tuesday, November 03, 2015

Federal Interference In State Medical Marijuana Ends… But Only For Those That Can Comply

Medical marijuana dispensary operators in California, especially those still battling the federal government, are rejoicing over a recent federal court ruling.  United States District Judge Charles R. Breyer ordered a federal injunction against one of the state’s oldest dispensaries be lifted, ruling the recently enacted Rohrabacher-Farr Amendment prohibits the federal government from prosecuting dispensaries that are following state law.  However, just a few weeks ago, following state law in California meant interpreting the AG Guidelines as protocols for medical marijuana dispensary operations as the state had no definitive or legal regulations.  That has changed.

Then Attorney General Jerry Brown penned the guidelines in 2008, which dispensaries, collectives and cooperatives took as the only guidance from the state at the time, and while many cities still did not have local regulations in place.  These guidelines, while not law, stated that storefront dispensaries may be in less legal jeopardy if they operated as not for profit, received all cultivated cannabis from legally qualified patients and caregivers and the business operated as a closed-loop by and for patients. 

Come now the end of the 2015 California legislative session where the current Governor Jerry Brown has signed a set of regulatory bills (AB 266, AB 243 and SB 643) that have completely turned his guidelines upside down:  no requirement to be not for profit, no requirement to be a patient or caregiver in order to cultivate or manufacture, no requirement to be a patient or caregiver to dispense...  So, getting in compliance with state law is going to be a fete for those that built their operating procedures around the AG Guidelines.  These guidelines did not spell out how to be legal but how medical marijuana operations might be lawful. 

In order to be considered for a state dispensary permit, the operation has to have local approval.  One of the many ways in which collectives and cooperatives interpreted the guidelines was to cut out the storefront and operate as a patient-direct garden.  Those that were willing to talk about their operations to local officials were told, “if you’re not running a storefront business, then you are not required to get a permit.”  Patient-direct collectives and cooperatives became the invisible method for fulfilling Prop. 215, but now that statewide regulations are in place, these operations are in jeopardy, as no local permit exists for them. 

Likewise, the new medical marijuana laws have torn apart the closed loop by not allowing vertical integration. Collectives and cooperative that felt forced to keep close tabs on the cultivation and manufacture of their medical cannabis products will be limited on what other permits for which they can apply – forcing them to let go of some of their operations.  Dispensaries are not even allowed to go pick up their products under the new rules, but are forced to hire a licensed third party transporter.  So, again, getting in compliance with the new state laws is going to be a task for many and possibly financially devastating, but you better do it because this compliance is now the only thing standing between you and the feds – who are still wringing their hands for the opportunity to make an example of someone.

Related links:
Medical Marijuana Ruling Highlights Federal, State Discord


Gov. Brown signs bill to regulate medical marijuana industry


Patient Advocacy Network has provided compliance trainings, workshops and consultations for nearly 10 years and to well over a thousand dispensaries in California.  Contact PAN at (323) 334-5282 if you have any questions about compliance with local or state regulations.  We want to help as many Compassionate providers as possible continue to serve patients and thrive.