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Tokin' Appreciation: Medical Marijuana & "Profit"

A cop walks into a bar….

Wait, that’s a joke, and what I want to write about today is no joke. This article is about a profound misunderstanding of the laws of the State of California, specifically relating to the sale of medical marijuana, and over what it means to “profit” from such sales. Because people who should not be arrested for exchanging marijuana for money are routinely arrested in California for making that exchange.

So let’s start again.

A cop walks into a marijuana grow…

In 1996, the People — a majority of the voters — of California passed the first of the medical marijuana laws, the Compassionate Use Act of 1996. The reason for this, and one of the primary goals, was

To ensure that patients and their primary caregivers who obtain and use marijuana for medical purposes upon the recommendation of a physician are not subject to criminal prosecution or sanction.[1]

Largely a failure, in terms of ensuring that it does what the voters voted for it to do, the Compassionate Use Act contained no provisions that prevented the arrest of anyone who obtained and used marijuana for medical purposes upon the recommendation of a physician; it simply gave such persons, when arrested, the ability to argue that they should not be prosecuted.[2]

In other words, you had a defense, if you could get anyone — judge, prosecutor, jury — to believe and accept it.

In 2003, the California Legislature — the elected representatives of the People of the State of California — arguably took things a step further, and initiated a plan that would provide immunity from arrest under certain conditions.[3]

No person or designated primary caregiver in possession of a valid identification card shall be subject to arrest for possession, transportation, delivery, or cultivation of medical marijuana in an amount established pursuant to this article, unless there is reasonable cause to believe that the information contained in the card is false or falsified, the card has been obtained by means of fraud, or the person is otherwise in violation of the provisions of this article.[4]

Of course, there is no scenario that has yet been found within the State of California where anyone was arrested with a card and one of those conditions did not exist. In other words, if you think this law, passed by the elected representatives of the State of California, actually prevents anyone from being arrested, I’ve got some swampland in the Sahara Desert I’d like to sell you.

That the medical marijuana laws of the State of California, created both by the voters of California and the elected representatives of the State of California, are routinely ignored by the unelected law enforcement officers of the State of California is not really the focus of this blog article, however.

As I noted in my introduction, I want to focus on one aspect of the medical marijuana laws: those relating to the sale of medical marijuana, which involves a little something the United States is normally quite fond of — capitalism.

According to the state legislature, and the California Supreme Court,

the [Medical Marijuana] Program [Act] does convey additional immunities against cultivation and possession for sale charges to specific groups of people, it does so only for specific actions; it does not provide globally that the specified groups of people may never be charged with cultivation or possession for sale.[5]

This immunity granted under the Medical Marijuana Program Act, as I said, goes farther than the limited immunity of the Compassionate Use Act. Where the CUA merely allows a qualified patient or caregiver of a qualified patient to defend in court against a charge of cultivation or possession, the MMPA provides immunity from arrest under certain conditions.[6]

Of course, this is true only where the law is followed.

Nearly every law enforcement officer within the State of California — the unelected officials charged with enforcing the laws passed by the voters and elected officials — ignores this law.

They do so largely by the subterfuge of saying that the MMPA does not allow anyone to “profit” from medical marijuana. According to law enforcement officers who have talked to my clients, or who I’ve cross-examined in court, if you give marijuana to someone, and this results in them handing you some money, you’ve made a “profit.”

This, of course, is pure horse sh–manure.

Don’t get me wrong. There are people who may be making a profit from the sale of “medical” marijuana. The majority of them, however, work for law enforcement. Those who follow the laws of the State of California relating to medical marijuana are decidedly not making a profit.

Ignore the fact that the law does not forbid making a profit, if you sell medical marijuana — even where the State says that it is legal — you get no federal business tax exemptions. (Little known fact: Americans can be prosecuted for failing to pay taxes even where the money earned was earned illegally. That’s how the feds were finally able to put gangster Al Capone in prison.)

Let me back that up a minute. The law does not forbid making a profit from selling medical marijuana.

Huh? Wha–?

Senator Vasconcellos, who wrote the Medical Marijuana Program Act, put it before the State Legislature, and got it passed, says he is…

…deeply concerned that in the nine years since we passed SB 420, certain people have evidently been advocating a marked misinterpretation of … SB 420 – with regard to whether ‘making a profit’ is somehow not permitted for medical cannabis providers under state law.[7]

As Senator Vasconcellos stated in his letter:

It was certainly true that one side wanted to outlaw any profit-making, while the other side did not and would not. So right there and then — in order not to lose our coherence as a working team hoping for a broadly supported result and to hold our coalition together — we took the openly deliberated, fully appreciated compromise way out: We catered to neither side on this issue. Instead the Task Force crafted the language that appears in Health and Safety Code section 11362.765(a) as follows: “. . . nor shall anything in this section authorize any individual or group to cultivate or distribute marijuana for profit.” It was so carefully crafted that neither side could claim victory.

In effect that issue was entirely left to whatever otherwise is the status of that issue in California law.

The Senator went on to clarify:

The language we fashioned means nothing more — nor less — than what it explicitly says. Nothing in that section prohibits profit. Nothing in that section explicitly authorizes profit, either. But I must point out that nobody is required to obtain an “authorization” from the Legislature to make a profit in California.

Anywhere. At any time.

Does the Legislature “authorize” the making a profit for people who sell clothing within the State of California? Must the Legislature “authorize” profits obtained by selling alcohol? Does a bake shop have to get permission from the Legislature to turn a profit when they sell baked goods?

Of course not.

And, according to Senator Vasconcellos, those working on the Task Force were well aware of the American tendency to approve of capitalism and the making of profits. According to him, the plan was to make sure that Health and Safety Code section 11362.765[8] did not interfere with whatever other laws might regulate the sale of marijuana. As the Senator himself said,

if [prohibiting profit] had been the intent, the language would have so stated clearly.

Unfortunately, the argument that has been made is that because the code that Senator Vasconcellas’s Task Force wrote states “nor shall anything in this section authorize any individual or group to cultivate or distribute marijuana for profit,”[9] that means “you cannot make a profit.” The text doesn’t state that, but that’s the argument.

Let’s pretend for a minute that this language is ambiguous. Let’s imagine that the phrase “nor shall anything in this section authorize…profit” actually could mean “this section makes it illegal to make a profit.” Accepting that possibility for the sake of argument, the statute could be deemed “poorly-written” and “ambiguous,” because it can also mean what it appears to state: that “whatever else is the case, this section by itself does not authorize anyone to make a profit.

When interpreting the meaning of a statute, California law requires courts to look first to the plain meaning of the words — which in this case simply say that nothing in 11362.765 itself authorizes the making of profits — and only if that fails, then you move on to trying to interpret what the Legislature (in this case) meant.

Currently, I’m at a dead-end on that avenue. My attempts so far to research the Legislative intent with regards to Senate Bill 420, which birthed the Medical Marijuana Program Act — and the language which law enforcement disingenuously argues is ambiguous — have hit a brick wall. Unfortunately, Senator Vasconcellos’s letter really doesn’t help, since it comes nearly a decade after passage of the legislation.

[A] subsequent expression of the Legislature as to the intent of the prior statute, although not binding on the court, may properly be used in determining the effect of a prior act.[10]


In general, a legislator’s personal understanding of a bill does not indicate the Legislature’s collective intent in enacting that bill.[11]

Vasconcellos’s letter concerning profit-making and the sale of marijuana is unhelpful because in the case just quoted, the California Supreme Court was discussing a letter written by a Senator — after the fact — as to the meaning of a particular statute.

I have so far been unable to find any legislative history that addresses the Legislature’s intent regarding the question of whether one is allowed to make a profit from the sale of marijuana.

Thus, since law enforcement and prosecutors insist ignoring the plain wording of the law, it will probably fall to the courts to clear this up.

That, however, is not the end of the story.

Let’s assume for the moment that the courts decided — contrary to the plain language of the statute — that “making a profit” by selling marijuana is prohibited. Does this mean that anyone who sells marijuana is therefore subject to arrest?

In a word, “No.”

It may be necessary, however, in order to obtain the greatest protection under the law, to incorporate as a non-profit organization. Frankly, that would be my suggestion to anyone who asked even if the making of a profit is allowed under the medical marijuana laws of California. Incorporating as a non-profit has a number of benefits for medical marijuana patients and caregivers.

First off, it immediately addresses the objection of law enforcement that you are “making a profit.” No, it probably won’t stop them from harassing and arresting those who are legally cultivating, using, transporting, or selling medical marijuana. This is because law enforcement doesn’t really care about enforcing state law anyway; they wish simply to enforce their own “law” on you. It will, however, make your defense against any charges that result that much stronger. Properly forming and operating a non-profit organization for the operation of a marijuana collective automatically takes some of the wind out of the sails of those who want to argue that you are making a profit.

Second, one of the larger problems threatening medical marijuana users right now in California is the fact — and we cannot deny that this is a fact — that there are large numbers of illegal, recreational users of marijuana who use the medical marijuana laws as a shield. These folks don’t care about the cancer patient who suffers from the inability to obtain medicine; they don’t care about those in chronic pain after surviving serious accidents; they are uninspired by someone’s need for marijuana after a doctor determines it is the best treatment for their medical issue.

They are, however, inspired by the fact that, if you can convince a doctor to write you a recommendation, you allegedly have some protection from going to prison for smoking marijuana — or from making a living growing marijuana.

These people hurt medical marijuana users who really do need their medicine by providing “proof” to law enforcement that “medical” marijuana is a joke. They turn public opinion against further protections of medical marijuana users. The medical marijuana community harms itself whenever it co-operates in their subterfuge.

But I digress.

Getting back to the question of “profit” and marijuana and the assumptionwe are making for the sake of argument: even if “making a profit” is not allowed under the medical marijuana laws of California, that does not mean that marijuana cannot be exchanged for cash. The medical marijuana laws — and California courts — as noted above have clearly stated that marijuana may be bought and sold. Qualified patients and their caregivers have the right to obtain medical marijuana; they can buy it if they wish. And marijuana may — without subjecting someone to prosecution — be sold.[12]

When it comes right down to it, law enforcement — and even prosecutors — know this is true. However, law enforcement, and many local government officials, do not want marijuana being bought and sold in their communities. It makes their jobs harder. After all, if you have to figure out who is legally selling marijuana and who is not legally selling marijuana, then you’re going to have to do some investigation before you arrest people “solely” for buying and selling marijuana. This is why they push the idea that you’re not allowed to make a profit.

And as far as most law enforcement officers and local government officials are concerned, if you give someone marijuana, and they give you money in return — wham! — you just made a profit. You need to be arrested. You need to be prosecuted. You need to go to prison.

Just like people who work for the Red Cross.

The Red Cross — more formally known as the International Federation of Red Cross and Red Crescent Societies — is the world’s largest humanitarian organization. According to their website, they work during and after disasters and health emergencies, taking care of people. They rely primarily upon volunteers. However, they also have paid employees. The average salary of a Red Cross employee is $40,000 per year.[13]

In 2011, the American Red Cross had net assets totaling $2.2 billion dollars. At the end of their 2011 fiscal year, they had a surplus of $71 million.

But Sheriff Mims hasn’t arrested any Red Cross workers in Fresno County.

Why not?

The answer is simple: It is not illegal for a non-profit to receive money, as the Red Cross and non-profit medical marijuana collectives do. It is not illegal for a non-profit to have a budget surplus — even a very large budget surplus. And it is not illegal to work for a non-profit and have that as your sole source of income.

Just like people who work for the Red Cross.

  1. California Health & Safety Code § 11362.5(b)(1)(B); People v. Urziceanu, 132 Cal. App. 4th 747, 767, 33 Cal. Rptr. 3d 859 (2005). [↩]
  2. People v. Kelly, 47 Cal. 4th 1008, 1013, 103 Cal. Rptr. 3d 733 (2010); People v. Mower, 28 Cal. 4th 457, 469, 122 Cal. Rptr. 2d 326, 49 P.3d 1067 (2002). [↩]
  3. The Medical Marijuana Program Act actually took effect in 2004, but was passed in 2003. [↩]
  4. California Health & Safety Code § 11362.71(e) (emphasis added). [↩]
  5. People v. Mentch, 45 Cal. 4th 274, 290, 85 Cal. Rptr. 3d 480 (2008) (emphasis added). Interestingly, the San Francisco District Attorney uses this exact same page of the Mentch case to argue that no one may ever legally sell marijuana within the State of California. Of course, when he was campaigning, he apparently did not believe this. Nor did his predecessors. [↩]
  6. California Health & Safety Code § 11362.71(e); see also People v. Moret, 180 Cal. App. 4th 839, 870, 104 Cal. Rptr. 3d 1 (2009) (Kline, P.J. dis. opn.) (Cardholders “are not subject to arrest for violating California’s laws relating to the possession, transportation, delivery or cultivation of marijuana, provided they meet the conditions outlined in the MMP.”), quoting County of San Diego v. San Diego NORML, 165 Cal. App. 4th 798, 81 Cal. Rptr. 3d 461 (2008). [↩]
  7. Steve Elliott, “Medical Marijuana Profit is Allowed Under California Law” Toke of the Town (February 9, 2012). [↩]
  8. Hereafter, I’ll just refer to this as “11362.765.” [↩]
  9. California Health & Safety Code § 11362.765(a). [↩]
  10. Carter v. California Dept. of Veterans Affairs, 38 Cal. 4th 914, 924, 44 Cal. Rptr. 3d 223, 135 P.3d 637 (2006) (alteration in original), quoting California Employment Stabilization Com. v. Payne, 31 Cal. 2d 210, 213-214, 187 P.2d 702 (1947). [↩]
  11. Carter, supra, 38 Cal. 4th at 929, citing In re Marriage of Bouquet, 16 Cal.3d 583, 589–590, 128 Cal. Rptr. 427, 546 P.2d 1371 (1976). [↩]
  12. Mentch, supra, 45 Cal. 4th at 290. [↩]
  13. This information was taken from on October 20, 2012. The average may not be the same when you read this, depending on how old my article is by the time you read it. [↩]