The Medical cannabis business has attracted entrepreneurs to California with the idea of a quick start-up and a potential new career field but have recently run into new statewide cannabis regulations. The golden state alone is the fourth largest economy in the world, providing lucrative business opportunity for entrepreneurs. With the growing political landscape in California and the strict legislation beings introduced, cannabis business owners have been forced to continually adapt in order to survive. The newest regulations are hard to decipher whether or not the bill will hinder the clubs ability to maintain operation.
Mathew Davies an entrepreneur who came to California, correlated the necessary legal documents with state law and with his Masters Degree in business and no criminal record began operating a medical cannabis club. He hired two accountants with compliance lawyers, applied for state and local permits and paid the California sales tax. Davies is now serving five years in prison after his dispensaries were raided in late 2013, as Benjamin Wagner, the U.S. attorney for the Eastern District of California compiled a range of marijuana cultivation charges at him and his co-owner, who was also his grow operator. Davies was prosecuted as a commercial marijuana trafficker. The judge’s declaration was that Davies was “not a serious medical caregiver”, rather “a major player in a significant commercial operation seeking to make large profits from the cultivation and sale of marijuana.” A federal operation was taken against Davies, meaning that being by the books in the state of California is still not enough to see you legally safe from the federal government. Caregivers have to adapt and prepare themselves for federal investigations, being mandated by the state government and serious about patients and their need for medical care. Dispensaries have to take greater care in their involvement as the caregiver and incorporating their business around wellness and patient care. Changing the name of your location can help keep you under the feds radar, “Hollywood Wellness” versus “Hollywood Buds” is going to keep you from standing out while shifting the focus of your dispensary to patient care.
In March 2014, California State legislator Tom Ammiano of San Francisco (D) introduced a measure to create new statewide sets of regulations for businesses related to marijuana in the state. This is not the first time Ammiano has worked with legislates to pass similar bills, but none have targeted the key issues such as the possible impacts environmentally of pursuing cultivation, or local government’s ability to effectively implement taxation. The latest bill, AB 1894 is said to address all these concerns and more. Proposition 215 made California the first state to have legalized the use of marijuana in 1996 but has since left no uniform regulations for the California businesses. Instead leaving shops vulnerable to vague cannabis laws. Attorney General Eric Holder indicated that the federal government would not be forced to intervene in states that had a “strong and effective regulatory and enforcement systems,”. California cannabis business owners need to adapt to the laws and regulations of Ammiano’s
AB 1894 bill which should help support them against the feds.
California dispensary owners since 1996 has been forced to adapt on the fly with the ever-changing political landscape of the state. There is no doubt that marijuana is on the eve of legalization in California and dispensary owners will once again have to adapt to the plants legal standing and the new statewide regulations that come with it. Until then it is imperative to their survival they continue their focus around patient wellness and secure the legal integrity of the AB 1894 to ensure being protected from the federal government.
Opinion By Zane Foley