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The sale of medical cannabis remains strictly illegal under federal law. Despite statements by the new U.S. Attorney General, some raids have taken place and prosecutions have continued, leading to sentences of up to 10 years.
California’s Attorney General issued guidelines for collectives and cooperatives in August 2008. The guidelines note that storefront "dispensaries" are not explicitly recognized in state law, but that a "properly organized collective or cooperative" may legally dispense medical marijuana through a storefront provided it complies with certain conditions. The guidelines do not envision dispensaries operating as patient "caregivers," nor as for-profit businesses (there are many ways in which businesses can be organized as "nonprofits"; for details consult a business attorney).
Coops and collectives must serve only verified legal patients, and distribute only to their own members. Dispensaries are expected to file for a seller's permit and pay sales taxes to the Board of Equalization. It is important that cooperatives and collectives consult local regulations before trying to set up operation. See www.canorml.org/prop/collectivetips.html for more information on forming a collective or cooperative. We recommend you consult with an attorney, a list can be found at www.canorml.org/laws/lc.html.
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