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California Senate moves to crush medical marijuana profits

  1. Rob Cypher
    A bill approved by the California state senate on Monday would further restrict the state’s medical marijuana industry by requiring the end of all for-profit sales of the drug to licensed patients and caregivers.

    The proposed law would go further than the state attorney general’s non-binding guidelines issued in 2008, making the not-for-profit collective model mandatory for dispensaries. Provisions in S.B. 439 would also place even greater records-keeping requirements on dispensary owners, who would still be entitled to reasonable compensation for their time and efforts. In theory, that should allow tax enforcers to peer more closely at dispensary finances to ensure shady businesses are not taking profits while reporting none.

    “Everybody benefits from tighter regulations,” Chris Lindsey, legislative analyst for the Marijuana Policy Project, told Raw Story. “Where you run into problems is when you have a law that can be interpreted several different ways, which means that people trying to comply with the law don’t know where they stand.”

    Former Attorney General Jerry Brown, now the state’s governor, issued those 2008 guidelines after several law enforcement agencies asked for clarification on who can be prosecuted and why. After California voters legalized medical marijuana in 1996, the state updated the laws again in 2004 with S.B. 420, the Medical Marijuana Program Act, moving the industry from a Wild West-like stage to a system of voluntary regulations that established a licensing system and put limits on growing and purchasing the drug.

    “[The Senate bill] gives the force of law to the guidelines established by the attorney general in 2008,” Lindsey added. “Where before the guidelines were guidelines, they would have the force of law, and I think that benefits everyone.”

    However, those voluntary regulations have not settled the dispute cities around the state are still having with medical marijuana dispensaries. Over 200 municipalities have banned pot shops outright — actions which the California Supreme Court upheld — and on Tuesday Los Angeles voters will decide on competing initiatives that deal with the same issue. The city council’s favored initiative, Proposition D, would dramatically shrink the number of dispensaries in the city. Measure F, which dispensaries support, would impose higher taxes on dispensary revenues and allow store owners to launch their own industry-wide set of voluntary regulations. If Measure F passes, however, the council still has the ability to completely ban all dispensaries within city limits.

    The confusion over rules for marijuana storefronts is precisely the target of S.B. 439 as well, according to sponsor Darrell Steinberg, president pro tempore of the California Senate. The Los Angeles Times noted he told colleagues during debate that because state law does not yet address issues affecting marijuana storefronts, he crafted the bill to “ensure that drug cartels and other criminals do not benefit from the lack of regulation.” Dispensary owners also told the paper that they support the legislation, which cleared the senate without a single Republican vote.

    “I don’t really know” if drug cartels are taking profits from shady medical marijuana businesses, Lindsey said. “I can understand that there would be concerns about that, but this is another example of why tighter regulations serve everybody best.”

    Stephen C. Webster
    Raw Story
    May 21, 2013



  1. al-k-mist
    Thank you. This is a good article.
    Would you like to know the truth? unfortunately, they do make a ton, and report little.
    for gods sake, they had a strain called hundred dollar OG, because of the price of an eighth of an ounce.
    dispenseries in southern california, up until like last year when the crackdowns started, gave the larger norcal growers a small amount for their product. the growers accepted, because they have bills to pay, taxes, families, etc. so they made a livable-but-poverty wage as farmers.
    the dispensery marked up triple, or more, and enticed patients with freebies, but patients signed paers when they joined, giving the dispensery permission to hold or grow their medicine, no matter how many they joined. a loophole.
    so bigger dispenserys got lawyers and could grow warehouses full, since they had all the paperwork in order. and could drive with it. sell more in their clubs.
    and sell a LOT behind closed doors,
    aaaaaaand..............its gone.
    to a non medical state at big profits, because they can only sell so may pounds, 1/8oz at a time. grams, even. most places wouldnt openly sell...im sorry, allow a patient to dontate for, over an ounce at a time. but several would front buds to people who would come in all day to re-up, after selling on the streets
    it was a legal weed game until the greed fucked it up. now there is close scrutiny on many places, and if they dont bribe the right people, they get fucked.
  2. SmokeTwibz
    California Senate Passes Medical Marijuana Dispensary Regulation Bill

    SACRAMENTO, CA — The California Senate voted 22-12 Monday to pass a medical marijuana dispensary regulation bill and send it to the Assembly for further consideration.

    The bill, Senate Bill 439, would take the first steps to regulate the sale of medical marijuana state-wide since California voters approved Proposition 215 in 1996, legalizing medical marijuana in California.

    The legislation would require that medical marijuana dispensaries are non-profit, although dispensary owners would be able to receive “reasonable compensation” and reimbursement for expenses for providing medical marijuana to patients.

    The bill comes as a legislative response to a two-year federal crackdown on dispensaries in California by the Department of Justice, who claim that California’s largely unregulated medical marijuana industry has grown enormously profitable and out of control while making medical marijuana easily available for recreational use.

    “This bill is not about the legalization of marijuana,” said Senate President Pro Tem Darrell Steinberg (D-Sacramento), sponsor o the bill. “It does seek to assure that patients who need medical cannabis have access to it. It is intended to assure that drug cartels and other criminals do not benefit from the lack of regulation.”

    Sen. Steinberg says his legislation, along with a separate bill filed in the Assembly by San Francisco Democrat Tom Ammiano, would create a well-regulated medical marijuana industry that would, hopefully, allow California to come to “some sort of an understanding” with the federal government, who still maintains that marijuana is a dangerous, addictive, and prohibited drug.

    Steinberg’s bill would adopt guidelines issued by Gov. Jerry Brown when he was the state’s attorney general in 2008, making it clear that the dispensaries cannot operate at a profit. Those operating within the guidelines could not face state prosecution, although they could still face federal prosecution.

    The 2008 guidelines also said dispensaries should track their members and product and take steps to discourage the marijuana from going to those without a legitimate medical need. Steinberg’s bill would put those non-binding guidelines into state law.

    Sen. Mark Leno (D-San Francisco) said nearly 50 California cities use the 2008 guidelines already to regulate dispensaries in their communities.

    In the Assembly, Rep. Ammiano’s bill, Assembly Bill 473, would create a new agency within the state Department of Alcoholic Beverage Control to regulate the growth, supply and sale of medical cannabis, replacing standards that now vary wildly from one city and county to another.

    “It’s never been regulated by the state as any other business,” said the bill’s sponsor, Assemblyman Tom Ammiano. “Cities and counties don’t know what to do or what they can do. Police are unsure how to respond, and the federal actions are confusing.”

    Although a majority of the hundreds of thousands of legal medical marijuana patients in California rely on dispensaries, the state has so far left regulation up to its localities.

    The result is a situation where what is tolerated on one side of a suburban highway may be prosecuted on the other side.

    There are currently more than 50 local ordinances, urban and rural, regulating medical marijuana dispensaries, which has led to a patchwork of local laws that serve some patient populations, but not others, forcing many people to travel long distances or use the black market to obtain a strain of medical marijuana that works for them.

    This patchwork system has also caused confusion for public officials, and created more work for law enforcement.

    The proposed bill hopes to change that by creating the Division of Medical Cannabis Regulation and Enforcement (DMCRE), which would be a part of the Department of Alcoholic Beverage Control.

    The DMCRE would be empowered to establish statewide standards for the cultivation, manufacturing, testing, transportation, distribution, and sale of medical marijuana and medical marijuana products, as well as a statewide licensing fee structure.

    The bill also requires the DMCRE to develop uniform policies statewide for the taxation of the medical marijuana industry, establish a licence structure and uniform identification card program.

    The DMCRE would be required to work in conjunction with state law enforcement agencies to enforce medical marijuana regulations to ensure compliance with the law.

    “California has been in chaos for way too long,” says Ammiano. “Cities have been looking for state guidance, dispensaries feel at the mercy of changing rules and patients who need medical cannabis are uncertain about how their legitimate medical needs will be filled.”

    Since 2011, when federal prosecutors in the state announced their crackdown on the unregulated medical marijuana industry, the DEA has raided numerous dispensaries and other medical marijuana-related businesses, including Oaksterdam University.

    In the past two years, hundreds of California dispensaries have shuttered their doors, in part because of the fear of federal prosecution and in part because of local moves against them.

    Thomas H. Clarke | May 21, 2013

    The Daily Chronic
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