News & Training
How Are Medical Marijuana Dispensaries Affected By Business Laws?
Practicing Medicine Without a License
Your medical physician’s offices are generally owned by the doctors themselves or a corporation owned by the doctors. In fact, “any person who practices or attempts to practice [medicine]” must be “authorized to perform the act pursuant to a certificate obtained in accordance with some other provision of law… .” California Business and Professions Code § 2052(a). This code criminalizes practicing medicine without a license. Additionally, a Los Angeles Appeals court recently expanded the definition of “practicing medicine” to include owning a corporation that operates a medical marijuana clinic, where licensed physicians treat patients and issue medical marijuana recommendations. People v. Superior Court (Cardillo). Medical marijuana clinics get into trouble when the owner of the clinic is not certified to practice medicine. According to § 2052(a), without the proper business legal guidance, the owner will be found guilty of a public offense, can be fined up to $10,000.00, and imprisoned for up to one year.
View the California Business and Professions Code Section 2052.
The Seller of Medical Marijuana Can’t Profit From the Sale
People typically become entrepreneurs with the plan to earn a profit. However, if the business you want to open is a medical marijuana dispensary, don’t expect to benefit financially from the retail sales of marijuana. An appellate judge in San Luis Obispo County announced on October 16, 2013, that retail sales of marijuana are banned, and any entity selling marijuana must be a nonprofit entity. The judge also explained in no unclear terms that no individual may benefit financially from “cultivating or distributing marijuana.” People v. Sandercock. What this means in terms of a medical marijuana seller’s bottom line is that any money received can be no more than the seller’s portion of the actual cost of cultivating and distributing the marijuana.
Want to read the full case? People v. Sandercock
To ask for business legal guidance on specific questions about your business, please contact us at info@galeandvallance.com, (714) 634-1414, or www.galeandvallance.com.
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Andrew Gale – Incorporation Attorney
Attorney at Law Offices 1820 West Orangewood Avenue, Suite 104a, Orange, CA 92868 Office: +1 (714) 634-4838. I provide legal advice, counseling and related services to entrepreneurs including the formation and management of their corporations and estate plans.
My Law Office is based in Orange County California and I have practiced law for 30 years. I have given advice to more than 1000 small business owners on the best ways to set up a company, what types of business entities (corporations, limited liability companies, partnerships) are best suited for them and their small business, how to legally run the business to protect their assets and how to successfully transfer the business to family or key employees through the proper use of estate planning and trusts.
