Business Plans

At the Cannabis Law Group, our Los Angeles medical marijuana lawyers have been retained on numerous occasions for consultations and advice related to compliance with laws including the Controlled Substance Act (CSA), the Compassionate Use Act (CUA), and the Medical Marijuana Program Act (MMPA), as well as the Attorney General's Guidelines and case law. We are effectively positioned to help businesses in this developing industry create an appropriate business plan. With the new system imposed by the Medical Marijuana Regulation and Safety Act (MMRSA), it is more important than ever to be in compliance with existing laws and to carefully craft your future objectives.

Whether you are new to the industry or have been involved in the medical marijuana industry as a dispensary or collective under the Medical Marijuana Program Act (MMPA) for some time, you will need to factor MMRSA's requirements into your business plan. MMRSA is expected to supersede the MMPA by 2018. One year after the Bureau of Medical Marijuana Regulation starts issuing licenses, all cannabis businesses must be licensed under MMRSA, except for individual gardens for patients or caregivers that serve a maximum of five patients.

MMRSA consists of three bills that make up a package of reforms to medical marijuana laws. The bills include provisions for the operators of licensed medical marijuana businesses to receive immunity from arrest and prosecution. The reforms also involve the implementation of taxes and fees, a lab-testing requirement to ensure quality for all medical marijuana products before they are provided to patients or caregivers, and a phase-out of the growing collectives model to allow a new licensing system to take hold of the cannabis industry.

Under MMRSA, you will need to obtain either one or two licenses, depending on which type of business you have. You will only be able to hold two licenses in certain combinations. As experienced attorneys, we can help make sure that you choose the right two licenses to meet your business objectives.

Under existing law, your business must be a non-profit, with customers who are members of the organization, and the organization must be operated for the benefit of its members rather than for profit. Part of your business plan thus should include the incorporation of your non-profit, which is a requirement under the CUA and MMPA.

MMRSA will allow for-profit businesses to obtain state licenses. However, when issuing licenses, the state will be prioritizing facilities or entities that can satisfactorily demonstrate that they were operating and already in good standing with all applicable local laws by January 1, 2016. It will also permit the continuation of the operations of those businesses with pending license applications that can show they complied with local zoning ordinances and other legal requirements on or before January 1, 2018. People who have certain criminal convictions, including felony drug convictions, will not be eligible for licenses under MMRSA, making it especially important to obtain guidance about how to stay compliant.

As a non-profit, you will need articles of incorporation, bylaws, appointed directors and officers, a first board meeting, and a corporate binder, as well as agreements with various other entities, including HIPAA authorization and in some cases an agreement with a transporter. You should record your business actions to show you are cultivating in compliance with the rule of operating for the benefit of your members and that if you grow, you grow only enough marijuana for the members to use medicinally. You will also need to be paying sales tax under a seller's permit.

In order to obtain priority under MMRSA, your plan should show your business is structured in compliance with local and state laws. In Los Angeles, for example, you need to be in compliance with Proposition D. However, each California city has its own rules regarding licensing, and it is important to work with an attorney who understands whether there is a local licensing system in place, how to establish immunity from prosecution, and how to comply with local rules.

If you are part of the medical marijuana industry, it is important to consult a knowledgeable attorney about your business plan. At the Cannabis Law Group, our Los Angeles medical marijuana attorneys serve clients throughout Los Angeles, Orange, and Riverside Counties, including in Beverly Hills, Burbank, Hollywood, Van Nuys, Woodland Hills, Long Beach, Anaheim, Irvine, Newport Beach, Tustin, Laguna Niguel, Corona, Indio, and Moreno Valley. Call us at 949-375-4734 or complete our online form to schedule an appointment with a cannabis attorney.