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Attorney General Guidelines

EDMUND G. BROWN JR.
Attorney General

DEPARTMENT 0F JUSTICE

State of California

GUIDELINES FOR THE SECURITY AND NON-DIVERSION
OF MARIJUANA GROWN FOR MEDICAL USE
August 2008

In 1996, California Voters approved an initiative that exempted certain patients and their

primary caregivers from criminal liability under state law for the possession and cultivation of
marijuana. In 2003, the Legislature enacted additional legislation relating to medical marijuana.
One of those statutes requires the Attorney General to adopt “guidelines to ensure the security and
nondiversion of marijuana grown for medical use.” (Health & Saf. Code,  1l362.81(d).1) To
fulfill this mandate, this Office is issuing the following guidelines to (1) ensure that marijuana
grown for medical purposes remains secure and does not find its Way to non-patients or illicit
markets, (2) help law enforcement agencies perform their duties effectively and in accordance
with California law, and (3) help patients and primary caregivers understand how they may
cultivate, transport, possess, and use medical marijuana under California law.

SUMMARY oF APPLICABLE LAW

A. California Penal Provisions Relating to Marijuana.

The possession, sale, cultivation, or transportation of marijuana is ordinarily a crime under
California law. (See, e.g.,  11357 [possession of marijuana is a misdemeanor];  11358
[cultivation of marijuana is a felony]; Veh. Code,  23222 [possession of less than l oz. of
marijuana While driving is a misdemeanor];  11359 [possession with intent to sell any
amount of marijuana is a felony];  11360 [transporting, selling, or giving away marijuana
in California is a felony; under 28.5 grams is a misdemeanor];  11361 [selling or
distributing marijuana to minors, or using a minor to transport, sell, or give away
marijuana, is a felony].)

B. Proposition 215 - The Compassionate Use Act of 1996.

On November 5, 1996, California voters passed Proposition 215, which decriminalized the
cultivation and use of marijuana by seriously ill individuals upon a physician’s
recommendation.  ll362.5.) Proposition 215 was enacted to “ensure that seriously ill
Californians have the right to obtain and use marijuana for medical purposes Where that
medical use is deemed appropriate and has been recommended by a physician who has
determined that the person’s health would benefit from the use of marijuana,” and to
“ensure that patients and their primary caregivers who obtain and use marijuana for

Unless otherwise noted, all statutory references are to the Health & Safety Code.

_ 1 _

B. Guidelines for the Lawful Operation of a Cooperative or Collective:
Collectives and cooperatives should be organized with sufficient structure to ensure
security, non-diversion of marijuana to illicit markets, and compliance with all state and
local laws. The following are some suggested guidelines and practices for operating
collective growing operations to help ensure lawful operation.

1. Non-Profit Operation: Nothing in Proposition 215 or the MMP authorizes
collectives, cooperatives, or individuals to proñt from the sale or distribution of
marijuana. (See, e.g.,  11362.765(a) [“nothing in this section shall authorize . . .
any individual or group to cultivate or distribute marijuana for proÍit”].

2. Business Licenses, Sales Tax, and Seller’s Permits: The State Board of
Equalization has determined that medical marijuana transactions are Subj ect to
sales tax, regardless of whether the individual or group makes a profit, and those
engaging in transactions involving medical marijuana must obtain a Se11er’s
Permit. Some cities and counties also require dispensing collectives and
cooperatives to obtain business licenses.

3. Membership Application and Verification: When a patient or primary
caregiver wishes to join a collective or cooperative, the group can help prevent the
diversion of marijuana for non-medical use by having potential members complete
a written membership application. The following application guidelines should be
followed to help ensure that marijuana grown for medical use is not diverted to
illicit markets:

a) Verify the individual’s status as a qualiñed patient or primary caregiver.
Unless he or she has a Valid state medical marijuana identification card, this
should involve personal contact with the recommending physician (or his or
her agent), Verification of the physician’s identity, as Well as his or her state
licensing status. Verification of primary caregiver status should include
contact with the qualified patient, as well as validation of the patient’s
recommendation. Copies should be made of the physician’s
recommendation or identification card, if any;

b) Have the individual agree not to distribute marijuana to non-members;

c) Have the individual agree not to use the marijuana for other than
medical purposes;

d) Maintain membership records on-site or have them reasonably
available;

e) Track when members’ medical marijuana recommendation and/or
identiñcation cards expire; and

f) Enforce conditions of membership by excluding members whose
identification card or physician recommendation are invalid or have
expired, or Who are caught diverting marijuana for non-medical use.

4. Collectives Should Acquire, Possess, and Distribute Only Lawfully
Cultivated Marijuana: Collectives and cooperatives should acquire marijuana
only from their constituent members, because only marijuana grown by a qualified
patient or his or her primary caregiver may lawfully be transported by, or
distributed to, other members of a collective or cooperative.  ll362.765,

1 1362.775.) The collective or cooperative may then allocate it to other members of
the group. Nothing allows marijuana to be purchased from outside the collective or
cooperative for distribution to its members. Instead, the cycle should be a closed-
circuit of marijuana cultivation and consumption with no purchases or sales to or
from non-members. To help prevent diversion of medical marijuana to non-
medical markets, collectives and cooperatives should document each member’s
contribution of labor, resources, or money to the enterprise. They also should track
and record the source of their marijuana.

5. Distribution and Sales to Non-Members are Prohibited: State law
allows primary caregivers to be reimbursed for certain services (including
marijuana cultivation), but nothing allows individuals or groups to sell or distribute
marijuana to non-members. Accordingly, a collective or cooperative may not
distribute medical marijuana to any person who is not a member in good standing
of the organization. A dispensing collective or cooperative may credit its members
for marijuana they provide to the collective, which it may then allocate to other
members.  ll362.765(c).) Members also may reimburse the collective or
cooperative for marijuana that has been allocated to them. Any monetary
reimbursement that members provide to the collective or cooperative should only
be an amount necessary to cover overhead costs and operating expenses.

6. Permissible Reimbursements and Allocations: Marijuana grown at a
collective or cooperative for medical purposes may be:

a) Provided free to qualified patients and primary caregivers Who are
members of the collective or cooperative;
b) Provided in exchange for services rendered to the entity;

c) Allocated based on fees that are reasonably calculated to cover
overhead costs and operating expenses; or

d) Any combination of the above.

7. Possession and Cultivation Guidelines: If a person is acting as primary
caregiver to more than one patient under section ll362.7(d)(2), he or she may
aggregate the possession and cultivation limits for each patient. For example,
applying the MMP’s basic possession guidelines, if a caregiver is responsible for
three patients, he or she may possess up to 24 oz. of marijuana (8 oz. per patient)
and may grow 18 mature or 36 immature plants. Similarly, collectives and
cooperatives may cultivate and transport marijuana in aggregate amounts tied to its
membership numbers. Any patient or primary caregiver exceeding individual
possession guidelines should have supporting records readily available when:

a) Operating a location for cultivation;

b) Transporting the group’s medical marijuana; and

c) Operating a location for distribution to members of the collective or

cooperative.

8. Security: Collectives and cooperatives should provide adequate security to
ensure that patients are safe and that the surrounding homes or businesses are not
negatively impacted by nuisance activity such as loitering or crime. Further, to
maintain security, prevent fraud, and deter robberies, collectives and cooperatives
should keep accurate records and follow accepted cash handling practices,
including regular bank runs and cash drops, and maintain a general ledger of cash
transactions.

C.

Enforcement Guidelines: Depending upon the facts and circumstances,

deviations from the guidelines outlined above, or other indicia that marijuana is not for
medical use, rnay give rise to probable cause for arrest and seizure. The following are
additional guidelines to help identify medical marijuana collectives and cooperatives that
are operating outside of state law.

l. Storefront Dispensaries: Although medical marijuana “dispensaries”
have been operating in California for years, dispensaries, as such, are not
recognized under the law. As noted above, the only recognized group entities are
cooperatives and collectives.  11362.775.) It is the opinion of this Office that a
properly organized and operated collective or cooperative that dispenses medical
marijuana through a storeñont may be lawful under California law, but that
dispensaries that do not substantially comply With the guidelines set forth in
sections IV(A) and G3), above, are likely operating outside the protections of
Proposition 215 and the MMP, and that the individuals operating such entities may
be subj ect to arrest and criminal prosecution under California law. For example,
dispensaries that merely require patients to complete a form summarily designating
the business owner as their primary caregiver - and then offering marijuana in
exchange for cash “donations” - are likely unlawful. (Peron, supra, 59
Ca1.App.4th at p. 1400 [cannabis club owner was not the primary caregiver to
thousands of patients Where he did not consistently assume responsibility for their
housing, health, or safety].)

2. Indicia of Unlawful Operation: When investigating collectives or
cooperatives, law enforcement officers should be alert for signs of mass production
or illegal sales, including (a) excessive amounts of marijuana, (b) excessive
amounts of cash, (c) failure to follow local and state laws applicable to similar
businesses, such as maintenance of any required licenses and payment of any
required taxes, including sales taxes, (d) weapons, (e) illicit drugs, (Í) purchases
from, or sales or distribution to, non-members, or (g) distribution outside of
California.


Ċ
Citizens For Patients Rights,
Jun 29, 2012, 3:34 PM
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