Proposition 215, the California Compassionate Use Act, was enacted by the voters and took effect on Nov. 6, 1996 as California Health & Safety Code 11362.5. The law makes it legal for patients and their designated primary caregivers to possess and cultivate marijuana for thier personal medical use given the recommendation or approval of a California-licensed physician.


SB420, a legislative statute, went into effect on January 1, 2004 as California H&SC 11362.7-.83. This law broadens Prop. 215 to transportation and other offenses in certain circumstances; allows patients to form medical cultivation “collectives” or “cooperatives”; and establishes a voluntary state ID card system run through county health departments. SB 420 also establishes guidelines or limits as to how much patients can possess and cultivate. Legal patients who stay within the guidelines are protected from arrest.




State Law for California Medical Marijuana Providers


Under state law,  the California Compassionate Use Act of 1996 (Prop. 215) patients and their "primary caregivers" are protected from criminal prosecution under state law 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, Senate Bill 420 (Health & Safety Code 11362.7-8). Among other things, SB 420 authorized patient "cooperatives" or "collectives" to grow, distribute and/or sell medical marijuana on a non-profit basis to their members. It also allows duly designated primary caregivers who consistently attend to patients' needs to charge for their labor and services in providing marijuana.


On September 30, 2010, Gov. Schwarzenegger signed bill AB 2650 (Buchanan), which prohibits medical marijuana collectives from operating within 600 feet of a school as of Jan 1, 2011. It covers all activities by dispensaries or other providers that have a storefront location or mobile outlet and are required to have a business license. The bill grandfathers dispensaries that are currently allowed to operate there under existing local regulations.


Although President Obama said during his campaign that he wouldn't be using federal resources to circumvent state medical marijuana laws, the Department of Justice launched a new offensive against California medical marijuana providers in the fall of 2011, and it has continued to expand since then. Especially targeted have been dispensaries that are 1,000 feet from schools or parks, with landlords receiving threatening letters. Read more.


The Pack decision, which held that cities may not regulate dispensaries since they are federally illegal, left local officials wondering what to do about current and pending ordinances. The California Supreme Court agreed to rule on Pack and three other dispensary-related cases, putting them on hold for at least a year. The Pack decision has since been invalidated by the California Supreme Court, which declined to give it a hearing without ruling on the merits of the case.  Although Pack is no longer legal precedent,  the question of federal preemption is not clearly settled, and could be resurrected in future court cases.


Meanwhile, in People v Colvin, the Second District Court of Appeals ruled that not every member of a collective or cooperative has to participate in cultivation, affirming the legality of storefront collectives. And in Lake Forest v Evergreen Caregivers Collective, the Third District Appellate Court ruled that cities cannot use nuisance abatement ordinances to impose a blanket ban on collectives - provided that the collective cultivate on-site. The California Supreme Court will hear Evergreen and City of Riverside v Inland Empire Patient’s Health and Wellness Center, with decisions expected in 2013.



Attorney General's Guidelines


On Aug. 25, 2008, the California Attorney General's office issued guidelines for medical marijuana enforcement explaining its interpretation of SB420 and Prop 215. Read the guidelines. Although not strictly binding as law, they provide a good indication of how the AG's office will with state enforcement. The guidelines are for the most part consistent with the California NORML legal committee's interpretation of state law, with certain exceptions noted below (see Cal NORML analysis of AG's guidelines ).


The guidelines note that storefront "dispensaries" are not explicitly recognized in state law, but that a "properly organized collective or cooperative" may legally dispense medical marijuana through a storefront provided it complies with certain conditions. The guidelines do not envision dispensaries operating as patient "caregivers," nor as for-profit businesses (there are many ways in which businesses can be organized as "non-profits"; for details consult a business attorney).


Dispensaries are expected to file for a seller's permit and pay sales taxes to the Board of Equalization. This is consistent with state law, which requires sales taxes for all medicinal herbs and drugs except those sold by a licensed pharmacist upon a doctor's "prescription " (legally, doctors cannot "prescribe" marijuana, but only "recommend" or "approve" it). The BOE publishes tax guidelines and a link for obtaining online sales permits.


You should first check your name availability with the Secretary of State and register your name.


Some cities and counties also require a business license and/or zoning permits for dispensaries.


Coops and collectives must serve only verified legal patients, and distribute only to their own members.


Beyond this, the guidelines specify that cooperatives and collectives should use only marijuana legally grown or obtained by their own members, with no purchases from outside their membership. This requirement is questionable, since there is nothing in state or federal law banning the purchase of marijuana, medical or otherwise, from any source (the law bans possession, not purchase, and possession is protected under Prop. 215). However, this problem can be avoided by including all growers and suppliers as members.


The guidelines also state that dispensaries should document their activities, and specifically "track and record" the source of their marijuana. This too is outside the requirements of Prop 215 and SB 420. While good record-keeping is always advisable as a business practice, keeping records on growers and vendors poses obvious problems given the threat of federal prosecution. Until federal law is reformed to protect medical marijuana suppliers, coops and collectives need to be careful about protecting their confidentiality.



Local Regulation


Many cities and counties have enacted ordinances aimed at licensing or regulating dispensaries. Many others have banned them altogether. Some cities, such as Los Angeles, have enacted moratoriums banning new dispensaries while allowing existing ones to operate. Others, such as Oakland, have put a cap on the number of licensed dispensaries. Strict zoning regulations are in effect in many localities, preventing siting near schools or too close to other dispensaries. 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. In some cases, regulations have been deliberately devised to be so strict as to preclude dispensaries from operating.


State law AB 2650 (Buchanan) prohibits medical marijuana collectives from operating within 600 feet of a school as of Jan 1, 2011. It covers all activities by dispensaries or other providers that have a storefront location or mobile outlet and are required to have a business license. The bill grandfathers dispensaries that are currently allowed to operate there under existing local regulations.


It is important that cooperatives and collectives consult local regulations before trying to set up operation. ASA has a list of Local California Dispensary Regulations; (however this list may not be up to date, check with local authorities.)


Anyone interested in opening a medical cannabis facility should be wary about alarming 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.