Incorporation

I want to open a medical dispensary in CA, what type of licenses do I need to get started, how much, and where do I get them?

what exactly does "being compliant mean?" I just want to open my shop and become as legal as possible.

Nathan’s Answer

Senate Bill 420 (The Medical Marijuana Program Act) is a good place to start. If you are starting from the ground up, you will be expending an outlay of an average of about $75,000. If you are using a turn key provider, you may very well pay over $100,000. You'd want to have an attorney do their due diligence on the paperwork, the entity, and their bona fides.

To be compliant means you have to abide by all laws applicable and to do that you have to ask yourself why you are opening a medical dispensary. Many major counties are banning dispensaries currently, with Co-ops suing the County of San Bernardino currently. Also, there is a labyrinth of local ordinances, and Federal laws as well. If a dispensary is not compliant, seizure by federal agents is not uncommon. However, the US Department of Justice suggests the risk is much less likely if you are abiding carefully by state law.

A dispensary will need to be filed as a non-profit via articles of incorporation that conform to the Corporations or Food and Agricultural Code. You may also be required to abide by local ordinances that require you to obtain business permits. Zoning may be an issue that would need to be addressed. Taxation of medical marijuana by CA would require a seller's permit as well.

You will also need to address and work within the limitations of what the local ordinances allow regarding business hours, security, advertising, number of individuals on site, etc. The number one reason for raids is when a dispensary flouts its status and draws an unruly crowd, that then draws neighborhood complaints that escalate to the federal level.

Also, security is paramount, independent of the compliance angle. Assuming you only buy/sell from other co-ops as required by the law, are issuing medical marijuana to actual patients, are abiding by all other rules and regulations, you should be fine, but that doesn't mean you can't be an easy target for criminals seeking to make a quick profit. Security is paramount in such an undertaking.

The following is a helpful overview of the state of cannabis law in California:

http://www.safeaccessnow.org/california_legal_information

Consult with an attorney if you feel like the requirements for compliance are overwhelming.

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