While recreational marijuana remains illegal in California, the state’s medical marijuana program has found huge success. With the success of the market, eager entrepreneurs are racing to open dispensaries all across the state. But would-be business owners are finding their dreams dashed after discovering most, if not all, local, state, and federal laws consider any for-profit dispensaries run by non-medical consumers illegal.

Some cities, like Oakland, have put a cap on the number of licensed dispensaries. Other cities, like Los Angeles, have enacted moratoriums banning new dispensaries altogether. More cities, still, are deliberately devising regulations so strict as to make it nearly impossible to open or operate a dispensary.

So if dispensaries are quickly going the way of the dodo, where are all these consumers getting their marijuana prodcuts? The answer: collectives.

What is a collective?

California State law doesn’t explicitly define collectives. In the simplest terms, a collective is a place where medical marijuana providers can legally distribute medicine to consumers. Both providers and recipients must be qualified medical cardholders and members of the collective itself. However, State law gives no explanation as to how these collectives should operate.

According to the guidelines put forth by the California Attorney General’s office,

A collective should be an organization that merely facilitates the collaborative efforts of patient and caregiver members including the allocation of costs and revenues. As such, a collective is not a statutory entity, but as a practical matter it might have to organize as some form of business to carry out its activities. The collective should not purchase marijuana from, or sell to, non-members; instead, it should only provide a means for facilitating or coordinating transactions between members.

What’s Required of Membership?

It’s inferred that collectives should not accept walk-in clients nor offer retail sales of medicine to its members. The ideal collective model includes a group of consumers and caregivers who plant a garden together and share the crop among themselves.

Some common ways members support their collective is by:

  • Making donations
  • Participating in work
  • Paying gardening fees
  • Paying membership fees

How Do I Set Up a Collective?

While collectives are legal under SB 420, possession, sale, distribution, and transportation of marijuana, medical or recreational, is still illegal under federal law. Running a collective can be a simple process, but navigating all local, state and federal laws can be quite a challenge.

Prospective consumers providers should contact an attorney beforehand. A qualified medical marijuana attorney can guide you through the legal process of starting a collective and answer any city or state specific questions you have.