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The Smoking...Gun - Medical Marijuana Dispensaries

What is illegal in the United States, but legal in California and many cities?  Prescribed by a doctor, but also obtained illegally?  Sold in retail outlets, but also obtained by other means. Moreover, could force a seizure of your commercial real estate?

In 1996 California voters passed the Compassionate Use Act allowing for the use of marijuana for medical purposes and in 2004 the law was expanded and further clarified.  The purpose of the law is to provide patients

and their primary caregivers rights to obtain and use marijuana for medical purposes as recommended by a physician without criminal prosecution provided all is done within state and local laws.

A primary caregiver is an individual designated by a qualified patient to cultivate and possess marijuana.  A caregiver can have many patients and several caregivers can associate together under a legally recognized non-profit cooperative or collective for growing and distributing marijuana.

A collective is allowed to distribute its marijuana, provided it is within strict California guidelines, to their member caregivers and patients through a storefront location known as a dispensary.

 In addition to California law, l

ocal governments may place further restrictions on such facilities.

However, al

l marijuana use is illegal according to Federal laws.  There has been an increase in the prosecuting of dispensaries by raiding and seizing assets.  

The Federal Government has also pressured landlords to terminate leases even though dispensaries are within local and state laws.  This places landlords in a bind with only a portion of the law met.  The landlord could wind-up in a lawsuit or risk losing his or her property.

Recently, my client was approached by a medical cannabis lobbyist who, in a very professional manner, presented his case as to why my client should lease his property to a dispensary.   The property owner was willing to lease to him, but after researching the laws and consulting with his attorney he learned that if he leased to a dispensary, he could risk being drawn into legal action and potentially have his building seized if the Federal Government were to raid his dispensary.

Two memos issued by the Federal Government dictate how medical marijuana will be handled in the future in states where legal.  The memos state the Federal Government will not focus on activity conforming with state laws, however large scale operations and those close to schools and parks will be scrutinized as to whether or not in compliance with state laws.  Currently there is a bill underway in Congress by both Republican and Democrat lawmakers to change the Federal medical marijuana laws.  At this point in time it may be prudent for commercial property owners to be wary of leasing to a dispensary.

Several cities allow dispensaries to operate within strict guidelines.  The City of Napa has no dispensaries and at one time was considering allowing one, but no more than two.  Napa currently has a moratorium on allowing any dispensaries, which expires in October.  It will need to be addressed by city staff and council before that time.

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