It’s been a busy month for the medical marijuana legal landscape. In April, AB 2312 obtained enough votes to pass through the California Assembly Committee on Public Safety. If the legislation becomes law, it would create the first statewide regulatory framework for the medical marijuana industry in California. It now heads to the Assembly Appropriations Committee and if its passed, medical marijuana collective license applications could be available as soon as July 2013.

The AB 2312 bill is known as the “Medical Marijuana Regulation and Control Act”, and was created for the purposes of “regulating and controlling medical marijuana activities”. The bill would establish the “Board of Medical Marijuana Enforcement” in the Department of Consumer Affairs and would consist of a governing body of 9 members, appointed by the Governor, the Senate Committee on Rules, and the Speaker of the Assembly. The duties of the board would include, but not be limited to, issuing or denying registration applications, establishing fees for administering these provisions, adopting regulations in connection with these provisions, and issuing fines and penalties for the violation of these provisions.

AB 2312 would preempt local laws regarding the regulation and control of medical marijuana and would prohibit a medical marijuana facility from operating without state-approved registration. The bill would generally require a city or county to permit at least 1 collective for every 50,000 residents, although they could opt out of this requirement with a vote.

The bill would require the board to make available mandatory registration application forms no later than July 1, 2013, and to make a thorough investigation to determine whether the applicant meets specified criteria. The bill would require a registration application to be approved or denied no later than 180 days after the application is filed with the board, and, if the board fails to act within this time, would require that the application be deemed approved.
While we wait to see what the legislature will do, the Supreme Court of California is preparing to weigh in on these important medical marijuana legal issues as well. On May 16, 2012, the Supreme Court decided to review the recent decision in The City of Lake Forest v. Evergreen Holistic. The Lake Forest court ruled that cities and counties could not ban collectives. It also ruled that collectives had to grow on site. That case will be reviewed along with the City of Riverside and Pack v. Long Beach case, cased filed by medical marijuana lawyers. A ruling from the Supreme Court however is not expected for at least 1 to 2 years.

Lastly, the Feds appear to have filed the first federal criminal charges against California medical marijuana collective operators. According to the reports, federal officials said investigators intercepted encrypted Blackberry messages of people connected with NoHo Caregivers detailing plans for the payment and distribution of marijuana that would result in the principals receiving more than $194,000 a month.
The actions taken against NoHo Caregivers and Green Camel by the feds were the only ones that took place in Los Angeles this week. Criminal actions were also filed against a facility in Orange County and stores in Dana Point, Laguna Hills, Lake Forest,, Rancho Santa Margarita and in Riverside County and the Inland Empire, according to the reports. Some of these operators are believed to have been making hundreds of thousands of dollars without paying any taxes or even shipping marijuana across state lines. It’s those that are in clear violation of state law that appear to be the ones that are now being prosecuted. “It is important to note that for-profit, commercial marijuana operations are illegal not only under federal law, but also under California law,” U.S. Attorney Andre Birotte Jr. said at a press conference Friday. Stay tuned for more as it should be an exciting rest of the year.

In March 2012 our medical marijuana lawyers were able to stop an eviction of one of our medical marijuana collective clients.  The collective was located in Santa Fe Springs, a city that has a ban on medical marijuana.  The city pressured the landlord to file an eviction case against our medical marijuana collective client. 

Luckily, just in time, the case of The City of Lake Forest v. Evergreen Holistic was ruled upon by our Appellate Court in Orange County.  The Court of Appeal ruled that cities cannot ban medical marijuana collectives.  As a result, we were able to go into court in Whittier and stop our clients eviction.  The judge had actually already ordered our client to be evicted from the property, based on the ban in Santa Fe Springs and the fact that our client did not have a business license to run a collective in the city. 

The Sheriff had been out to post a notice, giving our client 5 days to move.  However, because of the timing on the Lake Forest ruling, our marijuana lawyers were able to go back into court and request the Judge to reconsider his ruling.  As a result, our medical marijuana lawywers were able to help the collective remain open. 

Cannabis Law Group is proud to have been involved on the groundbreaking medical marijuana case in the City of Lake Forest.  The case remains good law as of the publishing of this article and can be used to fight back against any city that tries to file a lawsuit for public nuisance against its collectives.

In November 2011, Cannabis Law Group filed a
lawsuit against the City of Santa Fe Springs on behalf of one of our medical
marijuana clients. The City of Santa Fe Springs does not currently have a ban
or moratorium on medical marijuana. Last year, the City of Santa Fe Springs
sent cease and desist letters to all of its medical marijuana collectives
informing them they had to close by the end of September or face civil or
criminal prosecution. The City also sent letters to the collective’s landlords
threating legal action and forfeiture of the buildings.

Our client’s landlord caved into the pressure and sued our client for unlawful detainer/eviction in October of last
year. Our client boldly stepped up to the plate and stood up for the rights of
his patients to obtain the medicine they need. To this day our client remains
in operation. Our client’s lease specifically stated that the property was
being leased for use as a medical marijuana collective, which strengthens the
client’s chances of winning the eviction case. We always advise you as a
collective operator to have your landlord put “medical marijuana” in
the lease as it does make it tougher for them to evict you later. At this time,
we are preparing to go to trial on the eviction action this February.

After a few weeks with not much activity, the feds conducted another raid on a
medical marijuana collective this past Tuesday. This time it was G3 Holistic
with not one but three locations! One in Upland, one in Moreno Valley and
another in Colton. These two knuckleheads that own all 3 stores were doing
exactly what we have advised each of you NOT to do. This collective was yet
another “big fish” that was making a lot of money and one that the
feds could pick to make an example out of. Just like the collectives that were
shut down by the feds in Lake Forest, these collectives had also been in
litigation with their respective cities and had even obtained stays, which is
why they should have been left alone – unless they were operating for profit,
which is what has been alleged.

Know not to operate 3 shops because even if you are operating in a truly
non profit way, the perception to the authorities is that you are operating for
profit (especially when you have a Brinks truck drive up to pick up the money
like the big fish that was raided in Pomona when this all started – Green
Cross.  This collective also allegedly operated Green Ribbon in Corona and 3
more collectives in Northern California)

So what does this all mean for you and your medical marijuana collective? Continue
to follow all state medical marijuana laws. Pay your taxes. Don’t operate, or appear to operate
for profit. Many of us believe the feds are trying to make examples out of
those who are clearly in violation and are flaunting it. The State Board of
Equalization has a task force that is watching to see who pays sales tax and
who does not. I have been informed by a client that the State Board of
Equalization has come to their collective and demanded unpaid sales tax (they on a payment plan to pay back owed sales but were unable to make a payment after they were robbed)

Also make sure to pay state and federal taxes on an estimated quarterly tax payment plan to avoid
penalties, interest and the appearance of tax evasion. G3 has also been alleged
to have taken undercover patients with “phony recs” – although I find
this a little suspect. Either way, always verify each patient, each visit.

We’ll provide more medical marijuana legal analysis and details as we learn
more.

The so-called medical marijuana “Grower’s License” being advertised by doctors is a farce.  If you are thinking about spending your money on a grower’s license with the intent of
using that license to grow medical marijuana to sell to a medical marijuana collective, you should know that it is not legal to do this.

The “growers license” being hawked by many doctors has several problems with it.  First, you must understand that a “grower’s license” is nothing issued by the State of California or by any City or County.  It is just another form of a medical marijuana recommendation issued by Doctors.  Second and probably most important, the
“grower’s license” will only allow you to grow medicine for yourself.  If does not authorize you to grow 99 plants for a collective.  Nor does it authorize you to sell your extra medicine to other patients or other medical marijuana collectives.

The so-called “Grower’s license” is just a scam by doctors who want to take your money and give you the false sense of security that you large scale grow is legitimate.  The doctors 99 plant recommendation to you means that the doctor has evaluated your medical condition and determined that you suffer from a severe medical condition, a medical condition so severe that 6 mature plants will not suffice for your medical needs.  It does not authorize you to grow for others.

If your 99 plant grow is discovered by a cop, the officer will likely look to see if you have paperwork to evidence that your grow is legal under California state law.  If you are growing 99 plants and have only a 99 plant grower’s license, the cop could arrest you and the District Attorney could try to build a case against you with the theory being that you are not so “seriously ill” that you need 99 plants.  In that case, you would then need the doctor show up in court and testify that your medical condition was so serious that 6 plants were not enough and that you needed 99 plants.  If the Doctor is out golfing that day, he may not show up to testify and you are left trying to convince the jury that you, personally, needed pounds and pounds of medicine.   This argument may not work, especially if the doctor is not willing, or unavailable to stand behind his grower’s license and show up to testify.

So what’s the most legitimate way to grow?  The first thing you need to know is that California law says that collectives must get their medicine from their members.  Secondly, you can’t sell medicine from one collective to another.  Accordingly, the available law tells us that the proper way to grow for others is to first join a collective.  Don’t  rely on a “growers license” issued by a doctor who isn’t even a member of the collective for which you would like to grow.  Second, after you join the collective and establish a relationship with the other members, then obtain authorization from that collective to grow for other members of their collective.  The best way to do this is with contracts which are available from our medical marijuana law office.

Remember, the law says that qualified patients can get medicine from other members of the collective who grow for them.  So you don’t need the doctor and you don’t need to rely on a phony grower’s license either.

Attorney Damian Nassiri is the founding partner of the Cannabis Law Group, a law firm dedicated to the rights of patients, collectives and growers.  His firm’s medical marijuana lawyers offer  consultations and nonprofit incorporations to those who are interested in starting their own medical marijuana collective.   You can reach Cannabis Law Group at 714-937-2050 or visit the law firm’s website at www.cannabislawgroup.com

August 2011 Ruling in Qualified Patients vs City of Anaheim

Judge Chaffe of the Orange County Superior court just issued the attached ruling in the Qualified Patients vs. City of Anaheim case.  The Judge ruled in favor of the City of Anaheim, finding that their ban on medical marijuana is constitutional.  The Judge reasoned that the ban was legal because its goal of preventing the “mass distribution” of medical marijuana was not preempted by California’s Medical Marijuana laws, which allow for the collective cultivation of medical marijuana by qualified patients but does not allow for “mass distribution”.  Anaheim’s definition of a collective is 3 or more patients cultivating and distributing medical marijuana.  The Judge did rule that the criminal sanctions portion of the ban needed to be severed because it was invalid based on the fact that qualified patients have a defense to criminal marijuana charges. 

This case will likely be appealed again to the 4^th District Court of Appeals, 3^rd division.   In the meantime, some cities and their attorneys will likely view this case as a victory and precedence approving of local bans on medical marijuana collectives.  Meanwhile, we are hopeful that this case will be overturned and that in the meantime other cities will follow Garden Grove’s example, as they have replaced their ban with a registration and grandfathering process.

The City of Garden Grove has published their medical marijuana permit application.  Garden Grove Medical Marijuana Application 

From the City’s website:

On July 19, 2011, the Garden Grove City Council adopted Urgency Ordinance No. 2797 (the “Registration Ordinance”), which established an eligibility cut-off date and a registration process for potential eligibility of medical marijuana dispensaries for future permits, pending adoption by the City of regulations governing the location and operation of medical marijuana dispensaries. Pursuant to the Registration Ordinance, any person that wishes to be potentially eligible for a future permit to operate a medical marijuana dispensary in the city of Garden Grove must submit a registration form and accompanying documentation (“Registration Form”), which based on credible evidence, establishes to the satisfaction of the City Manager that the person is an owner or operator of a medical marijuana dispensary that has been open, operating, and providing medical marijuana at a fixed location in the city of Garden Grove since at least June 30, 2011 (an “established operation”).

Each Registration Form must be accompanied by a registration fee in the amount established by the City Council, should include originals or true and correct copies of certain documents showing that the applicant is an owner or operator of an “established operation,” and must be signed under penalty of perjury.

Specific information and documentation required is set forth on the Registration Form. Copies of the Registration Form and the Registration Ordinance may be obtained from the City of Garden Grove Finance Department, located in City Hall, 11222 Acacia Parkway, Garden Grove, California, or from the City’s website at www.ci.garden-grove.ca.us.no later than September 23, 2011. The City will evaluate your Registration Form, determine whether you are the owner or operator of an “established operation,” and notify you of its determination within thirty (30) days of close of the registration process. 

Note: Submittal of a Registration Form does not entitle you to open, operate, or expand a medical marijuana dispensary in the city of Garden Grove. Only those medical marijuana dispensaries whose owners or operators timely submitted a Registration Form and which the City has determined to be “established operations” will be eligible to apply for a permit.

If the Garden Grove City Council subsequently adopts regulations permitting medical marijuana dispensaries to locate and operate in the city of Garden Grove, only those medical marijuana dispensaries whose owners or operators timely submitted a Registration Form and which the City has determined to be “established operations” will be eligible to apply for a permit.