Friday, March 28, 2014

How to Start a Legal Marijuana Dispensary in California

If you're interested in starting your own medical marijuana dispensary in California, you must first recognize the risks inherent in doing so.  Once you recognize the risks, you can work to mitigate them.  Put simply, there is no "safe" way to operate a dispensary.  By strictly complying with all applicable laws, regulations and guidelines, however, you can seriously reduce the chances that you will run afoul of the law.

Marijuana remains illegal federally, but the Obama administration has indicated that it will not seek to bust those individuals who remain in "clear and unambiguous" compliance with the laws of their state.  Unfortunately, nobody is in "clear and unambiguous" compliance with California law because California law is unclear and ambiguous itself.  The unsettled status of our law has created a "green rush" through a legal minefield.  Unfortunately, many cannabis entrepreneurs fail to take the appropriate legal precautions before wading into this new, dangerous and evolving industry. They often learn about the risks the hard way.  

When operating a marijuana dispensary, your mantra must always be "CYA" (Cover Your A**). Keeping your proverbial ducks in a row will reduce the risk of attracting unwanted attention from law enforcement. Maintaining proper, professionally-prepared documentation will also help establish your legal defenses if you are ever accused of any crimes related to the operation of your dispensary.  

Many of my clients call me after they've been raided.  They've often failed to properly cover their a**es when they were setting up and running their dispensaries.  Now they face serious criminal charges for conspiracy, cultivation, transportation, possession and sale of marijuana.  Their documentation may be improper or insufficient to establish a medical defense.  Prosecutors can prove that my clients were growing marijuana or trading it for money, but my clients cannot prove that their activities were performed pursuant to any lawfully-organized cannabis club.  

Don't make this mistake.     

Before you begin the process of forming your dispensary, you should consult with a qualified attorney (such as myself) to ensure your compliance with local laws.  Our firm offers a variety of services to cannabis start-ups, including initial consulting services, help with business formation (filing articles of incorporation, depending on the business entity that best suits your individual circumstances), obtaining a Seller's Permit and Employer Identification Number, drafting of necessary documents that your dispensary will use in daily operations (contracts, bylaws, membership agreements, etc.), ensuring continuing compliance, and training your employees on the law.  

After consulting with a qualified attorney, you must begin the process of creating your business plan.  Your business plan will include such considerations as the form that your business entity will take.  Depending on the size of your proposed project and the number of partners involved, you might choose to organize as a collective, a cooperative or a non-profit mutual interest corporation. Your attorney will explain the advantages and disadvantages of each business form.  Some types of business entities require you to file complicated documents with the Secretary of State, including Articles of Incorporation and governing bylaws.  Our firm can handle this entire process for you, or we can simply advise you if you wish to prepare and file the documents yourself.  

Once you've formed your business entity by filing the appropriate documents with the state, you must apply for a Seller's Permit and Employee Identification Number for tax purposes.  Unlike other types of "medicine", the California Board of Equalization has determined that medical marijuana is taxable and that dispensaries must pay sales taxes.  Again, we can prepare the necessary documentation for you, or else we can provide helpful advice if you wish to do it yourself.  

After your dispensary is properly formed and you have your Seller's Permit / EIN, you must begin the laborious process of drafting the various contracts and agreements for members, growers, transporters, employees, caregivers, etc.  Our firm will draft original contracts to specifically meet the needs of your unique dispensary.  

Once your shop is open and running, you must take care to ensure that your employees are adequately trained on both the law and the shop's in-house policies.  As the owner, you may be held legally responsible for crimes committed by your employees in certain circumstances.  You can also be sued or exposed to civil liability for activities that occur in and around your dispensary.  We can advise you regarding how to limit your own exposure to costly civil lawsuits and to criminal liability for crimes committed by your employees.  We can also provide regular employee training and continuing consulting services to ensure that your dispensary remains compliant with the evolving laws.  

If you've ever considered starting your own marijuana dispensary in California, call our office today to schedule a free consultation.  (714) 449-3335

Tuesday, March 11, 2014

Rules for Possessing and Transporting Firearms in California

A few weeks ago, I wrote a piece about California's wacky approach to weapons laws.  If you read that post, available here, you already know that it's legal to keep a machete under the driver's seat of your car, but it's illegal to keep a baseball bat in your own home if the bat's intended use is as a weapon.  You can carry a 12-inch Bowie knife on your belt, but you can be arrested for keeping an extendable baton under your bed for self-defense.  Samurai swords are legal; nunchucks are not. You may carry this concealed upon your person, but not this.  I never said these rules made sense.

All these California laws about knives, clubs and martial arts weapons were so goofy, I decided to save firearms for another day.  Well, today is that day.

California has some of the most complicated, restrictive gun laws in the United States.  To oversimplify things, here's a breakdown of the 3 main laws governing how and where you may possess firearms in California.  And of course, each of these rules contain exceptions, exemptions and caveats.  The Big Three laws regarding possession of firearms in California are as follows:

1) You may not carry a concealed (or "concealable") firearm in any public place or in the passenger area of your car (PC 25400).  The trunk is not considered the "passenger area".  Handguns must be locked and out of reach during transport.
2) You may not carry a loaded firearm within any incorporated city (PC 25850), and
3) You may not "open carry" any sort of firearm (handgun, rifle or shotgun) outside of your vehicle within any incorporated city (PC 26350 & PC 26400).  Since 2013, California is no longer an "open carry" state.  You may still, however, carry an unloaded rifle or shotgun in your vehicle, (e.g. in a gun rack).

Of course, these rules make allowances for police officers, military personnel, and licensed security guards to carry firearms as necessary.  There are also some common-sense exceptions to allow for things like shooting competitions, hunting, target ranges, gun buy-back programs, licensed "concealed carry", etc.

Some of the exceptions are less intuitive, but still make sense.  For example, these rules do not apply inside your own residence, place of business or other property that you own or lawfully possess.  You may also transport an unloaded gun between any of those places.  "Residence" even includes temporary residences, like campsites or hotel rooms (you may possess loaded and concealed weapons while camping).  You may even carry a loaded / concealed gun at your office if you own the place or you have your boss's permission to do so.

PC 25400 does not apply while a person is fishing, but PC 25850 does.  Essentially, this means that you may carry a concealed weapon while fishing, but the gun may not be loaded within city limits.  If you are fishing outside of city limits, you may carry a loaded, concealed handgun.

As mentioned, this is a very oversimplified glance at some of the laws regarding possession of firearms in California.  The rules are complicated, but this should help give you a basic understanding of your rights and obligations as a gun owner in the Golden State.

If you or a loved one is accused of any crime involving firearms, call our office for a free consultation. 714 449 3335.  Ask for John.

Thanks for reading.