MEDICAL MARIJUANA UPDATE: CARDHOLDERS RIGHTS RE-ENFORCED AND CO-OPS
AND DISPENSARIES HAVE NEW RULES

Part 1 appeared in the November 12 TWN and covered the recent action
by the California Supreme Court and the specific protections provided
to valid state medical marijuana cardholders. The court is currently
reviewing the three medical marijuana cases of the People vs. Kelly;
Phomphakdy; and Wood and is expected to eventually rule on whether the
current medical marijuana Health and Safety Code violates the state
constitution and/or whether there was an alternative to invalidating
the entire section.

In August 2008, the California Attorney General issued a comprehensive
set of "guidelines to ensure the security and non-diversion of
marijuana grown for medical use." The guidelines reinforce specific
protections to medical marijuana patients holding a valid state issued
card against arrest and seizure. For those claiming medical marijuana
protection without a card, the issue may be left up to the courts to
resolve. For co-ops, collectives and dispensaries, implementation of
the newly issued guidelines will likely change how medical marijuana
is grown and distributed to patients in California.

Attorney General guidelines to law enforcement for patients or
caregivers

For patients without a state issued card, officers are authorized to
continue any search or investigation following standard law
enforcement procedures. Standard procedures allow an officer to detain
a suspect as long as they have reasonable suspicion, but they require
"probable cause" for search, seizure, or arrest.

If the officer reasonably believes the medical claim is valid, based
on all evidence available and the person possesses no more than the
state or local possession guidelines, the person should be released
and marijuana not seized.

Officers are not required to accept a person's claim of having a
verbal physician's recommendation if it cannot be readily verified
with the physician at the time of detention.

If the officer has probable cause to doubt the validity of a medical
marijuana claim, the person may be arrested and marijuana seized. It
will then be up to the person to establish his or her medical
marijuana defense in court.

Guidelines for medical marijuana collectives, cooperatives and
dispensaries:

Medical marijuana collectives, cooperatives and dispensaries must
operate on a not-for-profit basis. Collectives and cooperatives
composed of qualified patients and primary caregivers may only acquire
marijuana grown, transported or distributed by qualified co-op
members. Each co-op must file articles of incorporation with the state
and conduct its business for the mutual benefit of its members.
Medical marijuana sales are subject to sales tax, seller's permits and
business' licenses. Marijuana may be provided free, in exchange for
services, allocated based on fees calculated to cover expenses or a
combination of all three.

Nothing in the medical marijuana laws allows marijuana to be purchased
from outside a group for distribution to its members. Instead, the
cycle is expected to be a closed loop of marijuana cultivation and
consumption with no purchases or sales to or from non-members. To help
prevent diversion of medical marijuana to nonmedical markets,
collectives and cooperatives are expected to document each member's
contribution of labor, resources, or money to the enterprise. They
also should track and document the source of all marijuana distributed
by the co-op.

Many existing dispensaries, which do not follow the rules of co-ops or
collectives, are not protected by current medical marijuana law. Those
that merely require patients to complete a form designating the
dispensary owner as their primary caregiver and then offering
marijuana in exchange for cash "donations" are likely unlawful.