Starting a Collective

How To Open a Dispensary
MattJacobsen

Starting a Collective

A legal medical marijuana dispensary serves its local community through its contribution to the physical well being and health of the community. A well run medical marijuana dispensary will adopt community friendly policies, such as a good neighbor policy to enhance the service that it provides. These are the guidelines that anyone considering opening a medical dispensary will take into account as they prepare to embark on a new medical marijuana dispensary service. The service may be referred to as dispensaries, compassion clubs, or marijuana centers, however the following guidelines still apply.

The first step in opening a legal medical marijuana dispensary business is starting a collective. However before we look into this aspect of the business we need to be informed about the legal position. Under state law, patients and caregivers are authorized to collectively or co-operatively cultivate marijuana for medical purposes. In order to comply, the collective must be a properly organized and operated association. Before embarking on such a venture, it is always advisable to seek legal advice as the above can only be taken as a guideline for consideration.

Having established that the collective will operate within the confines of the law, there will be four mandatory requirements when planning on starting a collective:

• patients need to be legally qualified
• medicine needs to be sourced exclusively from members
• medicine needs to be provided exclusively to members
• basis of operation will be not for profit

These are fundamental rules to starting a collective and organizers will seek to ensure that they are observed at all times.

Perhaps one of the most challenging of those four criteria is restricting the supply to that received from the members. Starting a new collective will obviously mean a limited membership and supply will be short. However by gradually increasing the membership and encouraging members to return with their excess medication, it is will quickly become possible to help more and more new members.

As noted above, the trading basis for the collective will be not for profit, i.e. it will not be operated as a commercial business. In practice this means re-investing all surplus income in non commercial activity or in the provision of services for its members. This can be a particularly rewarding part of starting a collective, knowing that you will be helping people through the efficient running of the collective services.

It is worth noting at this point that the Internal Revenue Service (IRS) differentiates between Not for Profit and Non Profit companies. A non profit activity may be exempt from federal and state taxes (for example churches and schools) whereas a Not for Profit business will still be liable for taxes. Having said that, even a non profit collective will be liable for taxes. However, having said that, when starting a collective it is a good idea to start up as a Non profit Mutual Benefit Corporation. This adds credibility to the service and can assist with relationships with elected officials and the general neighborhood.

Many patients rely on collective services and very much appreciate the convenience that they offer. When starting a collective it is important to remember this, and to engage with all members of the community towards this goal of helping those who cannot help themselves.

Your members will understand if you do not have a wide selection when you first open. Encourage those members who do grow cannabis to bring their excess medication back to the collective to help the other members. Some legally qualified medical cannabis patients are very good at growing medicine. In fact, some have relatively large stores of excess medication. These fortunate patients will often be looking for a dispensing collective or cooperative to join. Some people refer to these patients as “vendors.” A better term is patient-cultivator. It has been my experience that these patient-cultivators will find you when you open your collective. I am sorry to say that I cannot help you locate medication for your new dispensing collective.

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