Time and time again I see people in medical cannabis make the same mistakes. Rather than get accurate legal advice, many patients prefer to copy what the other guy is doing. Unfortunately, the other guy probably never got legitimate legal advice either so the same mistakes get repeated over and over until everyone is doing it and people think its the law. Make sure you are not making these mistakes too. They could not only cost you money, but also your freedom.

1) Requiring members to be California residents

There is nothing in California law that requires a patient or collective member to be a California resident. Only the recommending doctor must be licensed in California. Patients from other states are free to get a rec from a California doctor and join a California collective. Some would say that the preamble to Prop 215 clearly states that it is intended to help “seriously ill Californians,” however the preamble has no legal effect and there are no cases denying patients protection in California based on their residency. Stop turning away good members because of where they live!

2) Using the wrong statutes on medicine labels

It’s great that businesses are labeling their products especially because it is required by California law. However if you are going to do so and list the California statutes for medical cannabis, please use the right statute. CA H&S Code 11362.5 is the statute establishing protections for patients under Prop 215. It does not allow distribution. If your label says “Distributed in accordance with 11362.5” like most labels do, you are using the wrong statute. CA H&S Code 11362.775 is the statute established by SB 420 that protects collectives and distribution. If you want to use a statute on your labels, use this one.

3) Vending without a nonprofit business

If you grow cannabis for a dispensary you are a vendor (unless you are the owner or an employee). Vendors are collective members who grow cannabis for other members and get paid for their time, labor, and expenses. California law prohibits the sale of cannabis for profit, even medical cannabis. If you are a vendor you are selling cannabis and therefore you need a nonprofit business (See #5). If you get arrested and charged with distribution you will need to show that you are not only a member of the collective, but that you are not profiting from the sale of cannabis. Making a living does not necessarily mean you are making a profit but the only way to show you are doing things right is to set up a nonprofit business (with an experienced lawyer of course).

4) Using a friend as a “caregiver” to grow your plants

It is really hard to legally qualify as a caregiver. You must consistently assume responsibility for the housing, health, or safety of the patient separate and apart from any medical cannabis support. Your friend who grows for you is probably not your caregiver, but that’s ok. If your friend is a patient, s/he does not need to be a caregiver. As patients you are allowed to collectively grow together. Your friend is not your caregiver, but they are a member of your shared collective. Collective members can divide the work, expenses, and medicine. You probably want to put something on paper to show you have a collective. The Patient ID Center in Oakland and the Americans for Safe Access website both offer free, simple collective agreements. However, if you and your friend want to get together with a larger group and turn your collective into a business, it is advisable that you meet with a lawyer to set up your collective and nonprofit business (See #3).

5) Using the word “donations”

This one is really starting to get old. If you give someone cannabis for anything of value, that my dear is called a sale. It doesn’t matter if it is cash, jewelry, or your grandpa’s Babe Ruth baseball card. Any first year law student can tell you that. It’s a sale and that is ok because collective members who follow state law are immune from sales charges under SB 420. Using the word “donation” does not change this fact, but apparently “sales” has become a dirty word in the industry that no one wants to use. This started back when police and prosecutors would play dumb and declare that “sales” are illegal in a collective but “donations” are allowed. Ok, fine. We can play your game. Just make sure that if you use the word “donations” you know it is actually a sale and that’s ok.

Now that you know some of the most common mistakes, make sure you stay safe and compliant.