Can I Change My Non-Profit Collective to a For-Profit Cannabis Business?

Yes, there are various factors to be taken into account before you change from non-profit cannabis collective to for-profit cannabis business.  Most importantly, do not change until you have a State license to operate or you will be left unprotected from State law Cannabis violations.

What are my Choices?

You can file amended articles to preserve name and priority licensing. California law specifically provides that a mutual benefit corporation may amend its articles to change its status to that of a business corporation or a cooperative corporation.

For those concerned with priority in issuing licenses on a showing of lawful operation before September 1, 2016, you must be able to show written authorization (permit – condition use permit, etc.) from the local jurisdiction (City – County) were it was operating.

Please note you cannot amend the articles of a nonprofit mutual benefit corporation to an LLC because these entities file different articles. “Article of incorporation” for corporations (for-Profit or non-profit) and “Articles of Organization” for LCC.  However, a mutual benefit corporation may merge with any domestic corporation, foreign corporation, foreign business corporation, or other business entity.

You can also file new articles corporations or to become a for-profit entity of your choice including the new Cannabis Cooperative Associations authorized by MAUCRSA.

The most prudent approach is to get a fresh-start by forming a new entity of your choice to apply for your for-profit cannabis business license(s).  This will allow the winding-down of the non-profit mutual benefit collective’s membership to leave only active members for distribution assets, if any.

Bear-in-mind that filing amend articles of incorporation can only be filed if the corporation has an active status on the records of the California Secretary of State.  If your status is Suspended, you must Revive the status back to Active by payment of all back-taxes in full.  Arranging payments will not revive status to Active. The status of your entity can be checked online on the California Secretary of State’s Business Search at https://businesssearch.sos.ca.gov/.

Some concerns are; when you convert to a stock corporation you need to assess the potential nonprofit assets or tax consequences. At the time of conversion from a non-profit to a for-profit, the business will be treated as a California C-corporation which will be subject to double taxation.  Once at the corporate level and a second time when profits are distributed to shareholders.

One-more-thing, selecting an entity (LLC, S-corporation, Partnership) precludes the entity from offering future equity (shares) to entity investors (non-individual) because California law does not allow non-individuals to hold shares LLC, S-corporation, Partnership.

Either way, Business 101 instructs us to form an entity to protect our personal assets and to establish a name marketing platform registered with the Secretary of State.

Copyright © 2012 – 2017 Law Office of Wolfgang Kovach, Inc. All rights reserved.

My office uses a two-phase process to ensure a high degree of compliance, value, at an affordable rate. (phase 1) Formation and (phase 2) obtain written approval from the City or County where you wish to operate and apply for a State license of your choice.

The first phase initial item on your check list is to form your for-profit entity.  Generally, a Domestic Stock Corporation is preferred because investors are generally formed as entities (Corp, LLC, etc., and entities cannot be shareholders in LLC.

My office can help guide you with the proper formation and corporate compliance requirements to secure a strong operation foundation. I will prepare and file your articles of incorporation with the Secretary of State, draft bylaws, minutes, obtain stock certificates, agent for service of process and all other required documents including your corporate tax identification number and sellers’ permit on a fixed fee retainer agreement of $3,500 that includes all formation costs ($420.50): $100 filing fee, $125 (annual) agent for service of process, $20 statement of Information fee, $59.50 Parasec Service Fee/Surcharge, Sec State Filing Counter Fee 1 $15.00, $10.00 Certified Copy cost and Deluxe Entity Kit $91.00.  I also include one (1) year of complimentary telephone consultation to help answer the many questions that arise during the formation of your new cannabis business.

The second phase initial items on your check list is to have a business plan for the type of types of licenses that you wish to apply for.  The City or County where you wish to conduct your cannabis activities will require some degree of proof that you can actually do what you say you can.

This is vitally important and is a requirement to obtaining a State license that you must obtain the written approval of the local jurisdiction where you would like to operate from.  New and existing law allows Cities & Counties to outright ban any type of cannabis related activities whether nonprofit, noncommercial, or for-profit, commercial. So, it is best to find a local jurisdiction that is friendly to your type of cannabis activity.

If you are already permitted by a local jurisdiction ordinance, conditional use permit (CUP) the process is much more simplified.  As a matter of fact, Business and Professions Code section 26050.1 allows the Bureau of Cannabis Control to issue temporary licenses. A temporary license is a conditional license that allows a business to engage in commercial cannabis activity for a period of 120 days. The Bureau can only issue a temporary license if the applicant has a valid license, permit, or other authorization issued by the local jurisdiction. The Bureau is now issuing temporary and annual.

If you are not already permitted by a local jurisdiction ordinance, the process will require the submittal of supporting information and documents showing the planned commercial cannabis activities to the City or County for location approval. The supporting information and documents must include those items outlined in the Bureau of Cannabis Control Anticipated Annual (Non-Temporary) License Application Requirements that is attached in .pdf format. Bureau of Cannabis Control Anticipated Annual (Non-Temporary) License Application Requirements

After City/County/local jurisdiction written approval is secured, the last step is to apply for a State license or licenses.

Under MAUCRSA, the Bureau is tasked with issuing four general types of licenses, for the following types of cannabis business operations: (i) distributors, (ii) retailers, (iii) testing laboratories, and (iv) microbusinesses.

In general, licensees may hold multiple licenses and license types. The exception to this is testing laboratories. A licensee who holds a testing laboratory license may not hold any other type of license issued pursuant to MAUCRSA.

Licenses to conduct commercial cannabis activities will be designated with an (M) for licenses allowing medicinal cannabis business activities and with an (A) for licenses allowing adult‐use cannabis business activities.

Licensees may concurrently hold licenses for both medicinal and adult‐use cannabis business activities. Licenses for testing laboratories will not have an (M) or (A) designation, and testing laboratories will be permitted to test both medicinal and adult‐use cannabis under one testing laboratory license.

Click on this link Licensing information what you need to know

How Much will it Cost? – Refundable Hourly Attorney Fee

My office, with your assistance, can prepare the necessary documentation and submit it to the local jurisdiction for written approval and then submit an application to the State for a license to operate medicinal and/or adult use (Both) cannabis activities of your choice on a refundable, hourly, attorney fee, retainer agreement of $200 per hour with an initial deposit of $2,000 which represents 10 hours of attorney fee time x $200.00 per hour.  Any costs (Notary fees, City, County, State fee) will be provided to you for approval and your payment.  State license requirements

The initial deposit is neither a minimum or maximum amount of attorney’s fees that may be required to complete said legal services as each City or County and State have different requirements that will require more or less time to complete.  The initial deposit is not an estimate of total fees and costs, but merely an advance for security for work performed by Attorney.

What if the Area I want to be Located has ban on Cannabis Activities?

The local jurisdiction has the absolute right to regulate or even ban cannabis activities within its borders.

For example. on July 23, 2013, the Anaheim City Council passed an interim urgency ordinance prohibiting the operation of mobile medical cannabis dispensaries and collectives.

You should be in an area where you are actually wanted.  I attended Coachella Planning Commission meeting that was very positive.

Please find below four (4) links to properties that are available in the Coachella area zoned for commercial cannabis businesses for your review.

Also, the City of Los Angeles has a new The Commercial Cannabis Location Restriction Ordinance is a proposed Los Angeles Municipal Code (LAMC) amendment that would establish location and distancing requirements for commercial cannabis activity within the City.  Detailed maps are available on the City of Los Angeles Website for each licensed use and divided into 15 counsel districts.  Click on this link http://planning.lacity.org/ and navigate as follows: On the left side of the page look for Policy Planning (In yellow) Click on Ordinances. Then Click on Proposed Ordinances.  Scroll down the page and click on Commercial Cannabis Location Restriction Ordinance and Supplement. Then click on Maps and then selected the type of cannabis activity or activities you wish to operate. The main map does not show road details but, the 15 separate counsel district maps do. The maps have large files 25 MB + so, be patient.

Distribution Eligible Zones
Indoor Cultivation and Level 1 Manufacturing Eligible Zones
Level 2 Manufacturing Eligible Zones
Microbusiness Eligible Locations
Mixed Light Cultivation Eligible Zones
Retail Eligible Locations
Testing Eligible Zones

 

 

Copyright © 2012 – 2018 Law Office of Wolfgang Kovach, Inc. All rights reserved.

__________________________________________________________________

Disclaimer
Please be aware that possessing, using, distributing and selling marijuana are all federal crimes and that this blog is not intended to give you any legal advice, merely legal issues to consider and inquire about when conducting business with a federally illegal substance. Please also note that even though marijuana is illegal under federal law, you will need to pay federal taxes as though you are a legal entity. This is true even if you are a state law not-for-profit entity.

IRS Circular 230 Notice: We do not provide tax advice. However, to insure compliance with certain U.S. Federal Tax Regulations, we are required to inform you of the following: To the extent this message or any attachments concern tax matters, they are not intended or written to be used and cannot be used by any taxpayer for the purpose of avoiding penalties that might be imposed on the tax payer. Further, please be advised that to the extent this message or any attachments concern tax matters, they are not intended or written to be used and cannot be used by any taxpayer for the purpose of promoting, marketing or recommending to any party any matters addressed herein.

Prior Convictions – MAUCRSA

Yes, you (Applicant) can apply for licenses under MAUCRSA with prior convictions, subject to the review of the Department.apply for licenses under MAUCRSA

Just like any job or license application, MAUCRSA requires applicants to disclose all information required by the regulations, which include prior convictions, judgments, etc.

What should I do to before I apply for a license?

Under MAUCRA, an applicant shall not be denied a state license if the denial is based solely on any of the following:

A conviction or act that is substantially related to the qualifications, functions, or duties of the business or profession for which the application is made for which the applicant or licensee has obtained aapply for licenses under MAUCRSA certificate of rehabilitation,

A conviction that was subsequently [Expunged] dismissed pursuant to Section 1203.4, 1203.4a, or 1203.41 of the Penal Code or any other provision allowing for dismissal of a conviction.

How do I qualify as an “Applicant” in order to even apply for a State license?

The new Medicinal & Adult Use Cannabis Regulation & Safety Act “MAUCRSA” repealed the residency requirement. Now, applicants for licenses under MAUCRSA are subject to revised and recasted application requirements, and the persons subject to these requirements were also be revised.

First, it is important to know how to qualify as an “Applicant” in order to even apply for a State license?

Applicant” is defined as an “Owner” applying for a state license. Business and Professions Code Section 26001(c).

Owner” is defined as a “Person”.  “Person” includes any individual, firm, partnership, joint venture, association, corporation, limited liability company, estate, trust, business trust, receiver, syndicate, or any other group or combination acting as a unit, and the plural as well as the singular.

“An owner” shall mean any of the following:

(1) Any person that has an aggregate ownership interest, other than a security interest, lien, or encumbrance, in a commercial cannabis business of 20 percent or more;

(2) The chief executive officer of a commercial cannabis business;

(3) If a non-profit entity, each member of the Board of Directors;

(4) Any individual that will be participating in the direction, control, or management of the licensed commercial cannabis business.

An owner who is an individual participating in the direction, control, or management of the commercial cannabis business includes any of the following:

(A) Each partner of a commercial cannabis business that is organized as a partnership;

(B) Each member of a limited liability company for a commercial cannabis business that is organized as a limited liability company.

(C) Each officer or director of a commercial cannabis business that is organized as a corporation.

(b) Persons that hold an ownership interest of less than 20 percent in a commercial cannabis business are considered to be financial interest holders for purposes of subsection (d) section 26051.5 of the Business and Professions Code and shall be disclosed on the application for licensure. Such individuals are not required to submit an owner application under Section 40130. A financial interest means an investment into a commercial cannabis business, a loan provided to a commercial cannabis business.

The following persons are not considered to be owners or financial interest holders:

(1) A bank or financial institution whose interest constitutes a loan;

(2) Persons whose only ownership interest in the commercial cannabis business is through an interest in a diversified mutual fund, blind trust, or similar instrument.

(3) Persons whose only financial interest is a security interest, lien, or encumbrance on property that will be used by the commercial cannabis business; and

(4) Individuals who hold a share of stock that is less than 5 percent of the total shares in a publicly traded company.

Applications disclosing a prior conviction.

Any application disclosing a prior conviction will be reviewed by the Department and you may submit any evidence of rehabilitation for consideration by the Department with the application.

A statement of rehabilitation shall be written by the owner and contain all the evidence that the owner would like the Department to consider that demonstrates the owner’s fitness for licensure. Supporting evidence may be attached to the statement of rehabilitation and may include, but is not limited to, dated letters of reference from employers, instructors, or counselors that contain valid contact information for the individual providing the reference.

Criteria for Evidence of Rehabilitation.apply for licenses under MAUCRSA

When evaluating whether a license should be issued or denied when an owner has been convicted of a criminal offense or committed a violation of law that is substantially related to the qualifications, functions, or duties of the business for which the application is made, the Department shall consider the following criteria in its evaluation of evidence of rehabilitation:

(1) The nature and severity of the act or offense, including the actual or potential harm to the public.

(2) The owner’s criminal record as a whole.

(3) Evidence of any act committed subsequent to the act or offense under consideration that could be considered grounds for denial, suspension, or revocation of a manufacturing license.

(4) The time elapsed since commission of the act or offense listed in Section 40162, or in section 26057, subdivision (b)(4) of the Business and Professions Code.

(5) The extent to which the owner has complied with any terms of parole, probation, restitution, or any other sanctions lawfully imposed against the applicant or licensee.

(6) If applicable, evidence of expungement proceedings under Penal Code section 1203.4 or a similar law in another state.Can I Still Apply for a Cannabis License with Prior Convictions?

(7) If applicable, a certificate of rehabilitation obtained under Penal Code section 4852.01 or a similar law in another state.

(8) Other evidence of rehabilitation submitted by the owner.

For more detailed information, please click on one or more of the links below to view the entire regulation and summary (.pdf format).

What are the Types of Manufacturing Licenses are Available?

http://www.maucrsa-cannabis-attorney.com/what-are-the-types-of-manufacturing-licenses-are-available/

What are the Types of Cultivation Licenses are Available?

http://www.maucrsa-cannabis-attorney.com/what-are-the-types-of-cultivation-activity-licenses-available/

What Types of Testing, Retailer, Distributor Licenses are Available?

http://www.maucrsa-cannabis-attorney.com/what-types-maucrsa-licenses-testing-retailer-distributor-microbusiness-licenses/

 

Copyright © 2010 – 2018 Law Office of Wolfgang Kovach, Inc., all rights reserved.

 

____________________________________________________________________

Disclaimer
Please be aware that possessing, using, distributing and selling marijuana are all federal crimes and that this blog is not intended to give you any legal advice, merely legal issues to consider and inquire about when conducting business with a federally illegal substance. Please also note that even though marijuana is illegal under federal law, you will need to pay federal taxes as though you are a legal entity. This is true even if you are a state law not-for-profit entity.

IRS Circular 230 Notice: We do not provide tax advice. However, to insure compliance with certain U.S. Federal Tax Regulations, we are required to inform you of the following: To the extent this message or any attachments concern tax matters, they are not intended or written to be used and cannot be used by any taxpayer for the purpose of avoiding penalties that might be imposed on the tax payer. Further, please be advised that to the extent this message or any attachments concern tax matters, they are not intended or written to be used and cannot be used by any taxpayer for the purpose of promoting, marketing or recommending to any party any matters addressed herein.

 

O’ What a Wonderful Time it is to be a Californian

In case you did not know, our heroic, Governor threw the Medical Cannabis Regulation & Safety Act MMRSA in the trash based on public comments received during the 60 day public comment period.

MMRSA has been replaced by Senate Bill No. 94, CHAPTER 27, Medicinal and Adult-Use Cannabis Regulation and Safety Act (“MAUCRSA”) [Approved by Governor June 27, 2017. Filed with Secretary of State June 27, 2017.

There will be another 60 day public comment period but, our Governor is confident implementation will begin on January 1, 2018. Continue reading

What Types of Testing, Retailer, Distributor Licenses are Available?

 

 

 

 

 

 

The Bureau of Cannabis Control (BCC) is the lead agency in developing regulations for medical and adult-use cannabis in California. BCC is responsible for licensing retailers, distributors, testing labs and microbusinesses.

Types of Testing, Retailer, Distributor Licenses that are Available?

Type 8–Testing.

Type 9–Non-Storefront Retailer

Type 10–Retailer.

Type 11–Distributor.

Type 12–Microbusiness.

Cannabis Event Organizer License

Temporary Cannabis Event License

The regulations and their summaries can be viewed by clicking the following links:

Regulations:   bcc_prop_text_reg- Retailers reduced

Summary:   bcc_fact_sheet

Type 9-Non-Storefront Retailer

(a) A Type 9-Non-Storefront Retailer licensee shall be authorized to conduct retail cannabis sales exclusively by delivery as defined in Business and Professions Code section 26001(p).

(b) A complete application for a Type 9-Non-Storefront Retailer license shall include all the information required in an application for a Type 10-Retailer license.

(c) A Type 9-Non-Storefront Retailer licensee shall comply with all the requirements applicable to Type 10-Retailer licensees, except for those provisions related to public access to the premises.

(d) The licensed premises of a Type 9-Non-Storefront Retailer licensee shall be closed to the public.

Type 12-Microbusiness

(a) In order to hold a microbusiness license, a licensee must engage in at least three (3) of the following commercial cannabis activities: cultivation, manufacturing, distribution, and retail sale.

(b) An applicant for a Type 12-Microbusiness license shall indicate on the application for licensure which commercial cannabis activities the applicant intends to engage in.

(c) An application for a Type 12-Microbusiness license shall include:

(1)For an application indicating that the applicant intends to engage in cultivation under the Type 12-Microbusiness license all the required information under sections 5002, 5501, 5502 and 5503 of this division.

Type 11–Distributor – Self-Distribution – Distributor Transport Only License

A distributor transport only licensee shall be authorized to engage in the transport of cannabis goods between licensees.

A distributor transport only licensee shall not be authorized to transport cannabis goods to the premises of a retailer, except for when the licensee is transporting only immature plants and seeds from a licensed nursery to a licensed retailer.Medicinal adult use cannabis business attorney, orange county, riverside, county, san bernardino, San Diego

The licensing fee for a distributor transport only license will be based in part upon whether the licensee intends to transport only cannabis goods that the licensee has cultivated or manufactured (self-distribution), or whether the licensee intends to transport cannabis goods cultivated or manufactured by other licensees.

A distributor Transport-Only license – A distributor can choose to be a Transport Only Distributor, which transports only its own cannabis and cannabis products, or transports for other licensees, but does not perform any of the other functions of a distributor. Transportation to retail licensees is prohibited by this type of license, unless the licensees are transporting immature plants and seeds from a nursery to a retailer.

Distributor license

Arrange for testing, check for appropriate packaging and labeling, collect taxes, transport cannabis and cannabis products, and may act as a wholesaler. All transportation shall be conducted by distributor licensees and their direct employees.

Cannabis and cannabis products must pass through a distributor prior to being sold to customers at a retail establishment.

Distributors must arrange for the laboratory testing and quality assurance for cannabis and cannabis products.

Distributors may package and label cannabis (dried flower) but may not package cannabis products pursuant to the distributor license.

Type 8–Testing. Testing laboratory license – Test cannabis and cannabis products.

Provisional Testing laboratory license • Testing laboratories that meet all other requirements, but are awaiting Iso (the joint technical committee of the International organization for standardization and the International electrotechnical Commission) 17025 accreditation may obtain a provisional license.

Medicinal adult use cannabis business attorney, orange county, riverside, county, san bernardino, San DiegoCannabis Event Organizer License

To obtain a temporary cannabis event license, the event organizer must first apply for and obtain a cannabis event organizer license.

A cannabis event organizer licensee is not authorized or licensed to cultivate, distribute, manufacture, or retail cannabis or cannabis products unless it obtains the appropriate licenses or authorizations to engage in such commercial cannabis activities.

Temporary Cannabis Event License

A temporary cannabis event license shall only be issued to a person who holds a cannabis event organizer license issued by the Bureau.

Violations of the requirements applicable to temporary cannabis events may result in disciplinary action against the cannabis event organizer license or any other licenses held by a licensee participating in the cannabis event and responsible for the violation under Business and Professions Code section 26070.5.

No temporary cannabis event license will be issued for more than 4 days. Temporary cannabis event licenses will not be issued separately for consecutive days for the same event.

An application for a temporary cannabis event license shall be submitted to the Bureau no less than 60 days before the first day of the cannabis event. An application for a temporary cannabis event license shall include the following:
(1)
The name of the applicant. For applicants who are individuals, the applicant shall provide both the first and last name of the individual. For applicants who are business entities, the applicant shall provide the legal business name of the applicant.
(2)
The license number for each state cannabis license held by the applicant.
(3)
The address of the county fair or district agricultural association where the event will take place.
(4)
The name of the event. . .  Continued

Copyright © 2010 – 2018 Law Office of Wolfgang Kovach, Inc., all rights reserved.

______________________________________________________________________

Disclaimer
Please be aware that possessing, using, distributing and selling marijuana are all federal crimes and that this blog is not intended to give you any legal advice, merely legal issues to consider and inquire about when conducting business with a federally illegal substance. Please also note that even though marijuana is illegal under federal law, you will need to pay federal taxes as though you are a legal entity. This is true even if you are a state law not-for-profit entity.

IRS Circular 230 Notice: We do not provide tax advice. However, to insure compliance with certain U.S. Federal Tax Regulations, we are required to inform you of the following: To the extent this message or any attachments concern tax matters, they are not intended or written to be used and cannot be used by any taxpayer for the purpose of avoiding penalties that might be imposed on the tax payer. Further, please be advised that to the extent this message or any attachments concern tax matters, they are not intended or written to be used and cannot be used by any taxpayer for the purpose of promoting, marketing or recommending to any party any matters addressed herein.

What Types of Manufacturing Licenses are Available?

What Types of Manufacturing Licenses are Available?

The California Department of Public Health (CDPH) is one of three state cannabis-licensing authorities. CDPH, through its Manufactured Cannabis Safety Branch (MCSB) is responsible for licensing and regulating commercial cannabis manufacturers. Any person or entity wishing to manufacture cannabis products must be licensed with MCSB.

The regulations and their summaries can be viewed by clicking the following links:

Regulations for Manufacturing Licenses

Summary Regulations for Manufacturing Licenses

Temporary License Application: Cannabis Manufacturing

A temporary license is a conditional license that allows a business to engage in commercial cannabis activity. Once issued, this license will be valid for 120 days and may be extended for additional periods of 90 days, at MCSB’s discretion, if the business has submitted a complete annual license application.

Manufacturing License types include:Medicinal adult use cannabis business attorney, orange county, riverside, county, san bernardino, San Diego

Manufacturing licenses may be issued for either the adult-use market or the medicinal-use market.

The following license types are available from the Department:

(1) “Type 7,” for extractions using volatile solvents as defined by Section 40100. A Type 7 licensee may also:

(A) Conduct extractions using nonvolatile solvents or mechanical methods on the licensed premises provided that the extraction process is noted on the application form and the relevant information is provided to the Department pursuant to subsection (b) of Section 40128.

(B) Conduct infusion operations on the licensed premises, provided that the infusion method is noted on the application form and that the relevant information is provided to the Department pursuant to subsection (b) of Section 40128.

(C) Conduct packaging and labeling of cannabis products on the licensed premises.

(2) “Type 6,” for extractions using mechanical methods or nonvolatile solvents as defined by Section 40100. A Type 6 licensee may also conduct infusion operations and packaging and labeling of cannabis products on the licensed premises provided that the infusion method is noted on the application form and that the relevant information pursuant to subsection (b) of Section 40128 is provided to the Department.

(3) “Type N,” for manufacturers that produce edible products or topical products using infusion processes, or other types of cannabis products other than extracts or concentrates, but that do not conduct extractions. A Type N licensee may also package and label cannabis products on the licensed premises.

(4) “Type P,” for manufacturers that only package or repackage cannabis products or label or relabel the cannabis product container. Manufacturers that engage in packaging or labeling of cannabis products as part of the manufacturing operation do not need to hold a separate Type P license.

Medicinal adult use cannabis business attorney, orange county, riverside, county, san bernardino, San Diego

 

 

 

Copyright © 2010 – 2018 Law Office of Wolfgang Kovach, Inc., all rights reserved.

______________________________________________________________________

Disclaimer
Please be aware that possessing, using, distributing and selling marijuana are all federal crimes and that this blog is not intended to give you any legal advice, merely legal issues to consider and inquire about when conducting business with a federally illegal substance. Please also note that even though marijuana is illegal under federal law, you will need to pay federal taxes as though you are a legal entity. This is true even if you are a state law not-for-profit entity.

IRS Circular 230 Notice: We do not provide tax advice. However, to insure compliance with certain U.S. Federal Tax Regulations, we are required to inform you of the following: To the extent this message or any attachments concern tax matters, they are not intended or written to be used and cannot be used by any taxpayer for the purpose of avoiding penalties that might be imposed on the tax payer. Further, please be advised that to the extent this message or any attachments concern tax matters, they are not intended or written to be used and cannot be used by any taxpayer for the purpose of promoting, marketing or recommending to any party any matters addressed herein.

Can I Convert My Existing Non-Profit Collective to a For-Profit COOP?

convert Non-profit collective to for-profit Yes, under the Medicinal & Adult Use Cannabis Regulation & Safety Act, three (3) or more natural persons, who are engaged in the cultivation of any cannabis product, may form an association pursuant to this chapter for the purpose of engaging in any activity in connection with any of the following:

(1) The cultivation, marketing, or selling of the cannabis products of its members.

(2) The growing, harvesting, curing, drying, trimming, packing, grading, storing, or handling of any product of its members.

(3) The manufacturing, selling, or supplying to its members of machinery, equipment, or supplies.

(4) The financing of the activities that are specified by this section.

However, Members of a cannabis cooperative shall be disclosed to the licensing authority before the application is processed.

Members of a cannabis cooperative formed pursuant to this chapter shall be limited to cultivators who only hold a single Type 1 or Type 2 license.

Type 1—Cultivation; Specialty outdoor; Small.
(b) Specialty: (1) “Specialty Outdoor” is an outdoor cultivation site with less than or equal to 5,000 square feet of total canopy, or up to 50 mature plants on noncontiguous plots.

Type 2—Cultivation; Outdoor; Small.
(c) Small: (1) “Small Outdoor” is an outdoor cultivation site between 5,001 and 10,000 square feet of total canopy.

Collectively, members of a cannabis cooperative shall not grow more than four acres of total canopy size of cultivation throughout the state during the period that the respective licensees are valid.
No member of a cooperative formed pursuant to this section shall be licensed to operate a cannabis business in another state or country.

What My Office Does for You and How Much Does It Cost? convert Non-profit collective to for-profit

How Much Does It Cost?
My office can help guide you with the proper formation and corporate compliance requirements to secure a strong operation foundation. I will prepare and file your articles of incorporation with the Secretary of State, draft bylaws, minutes, obtain stock certificates, agent for service of process and all other required documents including your corporate tax identification number and sellers’ permit on a fixed fee retainer agreement of $3,500 that includes all formation costs of approximately ($420.50): $100 filing fee, $125 (annual) agent for service of process, $20 statement of Information fee, $59.50 Parasec Service Fee/Surcharge, Sec State Filing Counter Fee 1 $15.00, $10.00 Certified Copy cost and Deluxe Entity Kit $91.00. I also include one (1) year of complimentary telephone consultation to help answer the many questions that arise during the formation of your new cannabis business.

What My Office Does for You.
Reorganization of You Corporations Organized Pursuant to Other Laws
If your existing corporation that is organized or existing pursuant to the Corporations Code, either as non-profit or for-profit it may be brought under the provisions of this chapter by amending its articles of incorporation, in the manner that is prescribed by the general corporation laws, to conform to this chapter.

If a corporation amends its articles of incorporation to conform to this chapter, it shall be deemed to be organized and existing pursuant to, and entitled to the benefit of, and subject to this chapter for all purposes and as fully as though it had been originally organized pursuant to this chapter.

Prepare and file Amended Articles of incorporation
Articles of incorporation shall be deemed to conform if it clearly appears from the articles of incorporation that the corporation desires to be subject to, and to be organized, exist, and function pursuant to this chapter.

If the amended articles conform provisions in the articles of incorporation that appeared in the original articles or some previous amended articles, are ineffective if, and to the extent that, they are inapplicable to, or inconsistent with, this chapter.

Can I Tailor the Articles to Fit My Needs?

Yes, the articles of incorporation of an association shall show that the signers of the articles of incorporation are engaged in the cultivation of cannabis products, and that they propose to incorporate an association pursuant to this chapter, and shall state all of the following:

The name of the association.

The purposes for which it is formed.

The city, county, or city and county where the principal office for the transaction of business of the association is to be located.

The number of directors of the association, which shall not be less than three, and the names and addresses of the persons who are to serve as first directors. If it is desired that the first directors shall serve for terms of different lengths, the term for which each person so named to serve shall also be stated.

If organized without shares of stock, whether the voting power and the property rights and interest of each member are equal or unequal. If voting power and property rights and interest of each member are unequal, the general rule or rules that are applicable to all members by which the voting power and the property rights and interests, respectively, of each member may be and are determined and fixed shall also be stated.

If organized with shares of stock, the number of shares that may be issued and if the shares are to have a par value, the par value of each share, and the aggregate par value of all shares. If the shares are to be without par value, it shall be so stated.

If the shares of stock are to be classified, a description of the classes of shares and a statement of the number of shares of each kind or class and the nature and extent of the preferences, rights, privileges, and restrictions that are granted to or imposed upon the holders of the respective classes of stock. Except as to the matters and things so stated, no distinction shall exist between the classes of stock or the holders of them. One class of stock shall always be known as common stock, and voting power may be restricted to holders of common stock.

Can I Tailor the Bylaws to Fit My Needs?  Preparation of Bylaws
Yes, each association shall, within 30 days after its incorporation, adopt for its government and maagement, a code of bylaws. The vote or written assent of shareholders or members that hold at least a majority of the voting power is necessary to adopt the bylaws and is effectual to repeal or amend a bylaw, or to adopt an additional bylaw. The power to repeal and amend the bylaws, and adopt new bylaws, may, by a similar vote, or similar written assent, be delegated to the board of directors, which authority may, by a similar vote, or similar written assent, be revoked.

The bylaws may prescribe the time, place, and manner of calling and conducting its meetings. Meetings of members or stockholders shall be held at the place as provided in the bylaws, or, if no provision is made, in the city, county, or city and county where the principal place of business is located at a place designated by the board of directors. Meetings of the board of directors may be held at any place within or without the state that is fixed by a quorum of the board of directors unless otherwise provided in the articles of incorporation or bylaws. The bylaws may prescribe the number of stockholders, directors, or members that constitutes a quorum.

The bylaws may prescribe the following:
The right of members or stockholders to vote by proxy or by mail or both, and the conditions, manner, form, and effects of those votes. The right of members or stockholders to cumulate their votes and the prohibition, if any, of cumulative voting.

The bylaws may prescribe the qualifications, compensation, duties, and term of office of directors and officers and the time of their election.

The number of directors set forth in the articles of incorporation shall be either a fixed number or a variable number. If a fixed number, it shall not be less than three, and if a variable number, the stated minimum shall not be less than three and the stated maximum shall not be greater than two times the stated minimum minus one.

The number of directors may also be set forth in the bylaws either as a fixed number or as a variable number subject to the same limitations. After shares have been issued or members have been admitted, any adoption or amendment of the bylaw provision shall be approved by the outstanding shares as provided in Section 152 of the Corporations Code.
In the event of an inconsistency between an article provision and a bylaw provision, the provision more recently adopted or amended shall prevail.

If a variable number of directors is set forth in the articles of incorporation or the bylaws, the exact number of directors shall be fixed, within the limits specified, by approval of the board of directors or the shareholders as provided in Section 153 of the Corporations Code in the manner designated in the bylaws.

The bylaws may prescribe penalties for violations of the bylaws.
The bylaws may prescribe the amount of entrance, organization, and membership fees, if any, the manner and method of collection of the fees, and the purposes for which they may be used.
The bylaws may prescribe the amount that each member or stockholder shall be required to pay annually, or from time to time, if at all, to carry on the business of the association, the charge, if any, to be paid by each member or stockholder for services that are rendered by the association to him, the time of payment and the manner of collection, and the marketing contract between the association and its members or stockholders that every member or stockholder may be required to sign.
The bylaws may prescribe the amount of dividends, if any, that may be declared on the stock or membership capital. To the extent that dividends are payable out of the excess of association income over association expenses attributable to business transacted with or for members, dividends shall not exceed 8 percent per annum.

Financial Provisions
An association is not subject in any manner to the terms of the Corporate Securities Law (Division 1 (commencing with Section 25000) of Title 4 of the Corporations Code), and any association may issue its membership certificates or stock or other securities as provided in this chapter without the necessity of any qualification under that law.

If an association issues nonpar value stock, the issuance of the stock shall be governed by the terms of all general laws that cover the issuance of nonpar value stock in domestic corporations.

If an association with preferred shares of stock purchases the stock or any property, or any interest in any property of any person, it may discharge the obligations that are so incurred, wholly or in part, by exchanging for the acquired interest, shares of its preferred stock to an amount that at par value would equal the fair market value of the stock or interest so purchased, as determined by the board of directors.

In that case, the transfer to the association of the stock or interest that is purchased is equivalent to payment in cash for the shares of stock that are issued.

Members
Under the terms and conditions that are prescribed in the bylaws adopted by it, an association may admit as members or issue common stock only to persons engaged in the cultivation of a cannabis product that is to be handled by or through the association.

Nonstock Association
If a member of a nonstock association is other than a natural person, the member may be represented by any individual, associate, officer, or manager or member of it, who is duly authorized in writing.
Any association may become a member or stockholder of any other association.
If a member of an association that is established without shares of stock has paid his membership fee in full, he or she shall receive a certificate of membership.

Stock Associationconvert Non-profit collective to for-profit
An association shall not issue a certificate for stock to a member until it has been fully paid for. The promissory notes of the members may be accepted by the association as full or partial payment. The association shall hold the stock as security for the payment of the note, but the retention as security does not affect the member’s right to vote.
An association, in its bylaws, may limit the amount of common stock that any member may own.

 

Copyright © 2010 – 2018 Law Office of Wolfgang Kovach, Inc., all rights reserved.

____________________________________________________________________

Disclaimer
Please be aware that possessing, using, distributing and selling marijuana are all federal crimes and that this blog is not intended to give you any legal advice, merely legal issues to consider and inquire about when conducting business with a federally illegal substance. Please also note that even though marijuana is illegal under federal law, you will need to pay federal taxes as though you are a legal entity. This is true even if you are a state law not-for-profit entity.

IRS Circular 230 Notice: We do not provide tax advice. However, to insure compliance with certain U.S. Federal Tax Regulations, we are required to inform you of the following: To the extent this message or any attachments concern tax matters, they are not intended or written to be used and cannot be used by any taxpayer for the purpose of avoiding penalties that might be imposed on the tax payer. Further, please be advised that to the extent this message or any attachments concern tax matters, they are not intended or written to be used and cannot be used by any taxpayer for the purpose of promoting, marketing or recommending to any party any matters addressed herein.

What Types of Cultivation Licenses are Available?

That depends on what type(s) of licenses(s) you wish to operate.

For Cultivation related cannabis activities, the California Department of Food & Agriculture is responsible for the application, licensing and regulating for the following license types.

Click on this link cdfa_fact_sheet-Cultivation. for a summary of the current CDFA Cannabis Cultivation Regulations at a Glance.

The regulations and their summaries can be viewed by clicking the following links:

cdfa_prop_text_emerg_reg Cultivation

cdfa_fact_sheet-Cultivation1

Note: an additional license type (Processor License) that was not included in the original statute has been added for processors, permitting them to trim, dry, cure, grade, and package cannabis. Processors may not grow cannabis under their license. Cultivation Licenses

Cultivation License types include:

(a) Specialty Cottage:

(1) “Specialty Cottage Outdoor” is an outdoor cultivation site with up to 25 mature plants.

(2) “Specialty Cottage Indoor” is an indoor cultivation site with 500 square feet or less of total canopy.

(3) “Specialty Cottage Mixed-Light Tier 1 and 2” is a mixed-light cultivation site with 2,500 square feet or less of total canopy.

(b) Specialty:

(1) “Specialty Outdoor” is an outdoor cultivation site with less than or equal to 5,000 square feet of total canopy, or up to 50 mature plants on noncontiguous plots.

(2) “Specialty Indoor” is an indoor cultivation site between 501 and 5,000 square feet of total canopy.

(3) “Specialty Mixed-Light Tier 1 and 2” is a mixed-light cultivation site between 2,501 and 5,000 square feet of total canopy.

(c) Small:

(1) “Small Outdoor” is an outdoor cultivation site between 5,001 and 10,000 square feet of total canopy.

(2) “Small Indoor” is an indoor cultivation site between 5,001 and 10,000 square feet of total canopy.

(3) “Small Mixed-Light Tier 1 and 2” is a mixed-light cultivation site between 5,001 and 10,000 square feet of total canopy.

(d) Medium:

(1) “Medium Outdoor” is an outdoor cultivation site between 10,001 square feet and one acre of total canopy.

(2) “Medium Indoor” is an indoor cultivation site between 10,001 and 22,000 square feet of total canopy.

(3) “Medium Mixed-Light Tier 1 and 2” is a mixed-light cultivation site between 10,001 and 22,000 square feet of total canopy.

(e) “Nursery” is a cultivation site that conducts the cultivation of cannabis solely as a nursery.

(f) “Processor” is a cultivation site that conducts only trimming, drying, curing, grading, packaging, or labeling of cannabis and nonmanufactured cannabis products.

How Long is the License Valid for? Medicinal adult use cannabis business attorney, orange county, riverside, county, san bernardino, San Diego

Cultivation licenses shall be valid for twelve (12) months from the date of issuance.

Every business entity shall obtain a separate license for each premises where it engages in commercial cannabis cultivation.

Cultivation licenses are not transferrable or assignable to any other person, entity, or property.

Licensees are prohibited from transferring any commercially cultivated cannabis or nonmanufactured cannabis products from their licensed premises. All transfer of cannabis and nonmanufactured cannabis product from a licensed cultivation site must be conducted by a distributor licensed by the bureau.

The license shall be prominently displayed on the licensed premises where it can be viewed by state or local agencies.

A licensee may hold both an A and an M license on the same premises, provided the inventory for each license type is kept separate and distinct.

A licensee shall not sublet any portion of the licensed premises.

How do I Renew the License?

An application for renewal of a cultivation license shall be submitted to the department at least thirty (30) calendar days prior to the expiration date of the current license. No renewal application shall be accepted by the department more than sixty (60) calendar days prior to the expiration date of the current license.

Copyright © 2010 – 2018 Law Office of Wolfgang Kovach, Inc., all rights reserved.

___________________________________________________________________

Disclaimer
Please be aware that possessing, using, distributing and selling marijuana are all federal crimes and that this blog is not intended to give you any legal advice, merely legal issues to consider and inquire about when conducting business with a federally illegal substance. Please also note that even though marijuana is illegal under federal law, you will need to pay federal taxes as though you are a legal entity. This is true even if you are a state law not-for-profit entity.

IRS Circular 230 Notice: We do not provide tax advice. However, to insure compliance with certain U.S. Federal Tax Regulations, we are required to inform you of the following: To the extent this message or any attachments concern tax matters, they are not intended or written to be used and cannot be used by any taxpayer for the purpose of avoiding penalties that might be imposed on the tax payer. Further, please be advised that to the extent this message or any attachments concern tax matters, they are not intended or written to be used and cannot be used by any taxpayer for the purpose of promoting, marketing or recommending to any party any matters addressed herein.

What We Do for YOU

Whether you need to amend your articles of incorporation to change your non-profit collective to a for-profit licensed cannabis business or need help deciding which business structure meets your operational and investors requirements.Call me today for a free thirty (30) minute Telephone Consultation to Discuss your Options.

Call me today for a complimentary Telephone Consultation to Discuss your Options.

Good News: all three state cannabis licensing authorities have announced their proposed emergency licensing regulations for commercial medicinal and adult-use cannabis have been posted online and are available to the public for review.

The three state licensing entities establishing regulations for the cannabis industry are:

Bureau of Cannabis Control – housed within the California Department of Consumer Affairs, the Bureau will license retailers, distributors, third-party testing laboratories and microbusinesses. http://bcc.ca.gov/

Manufactured Cannabis Safety Branch – housed within the California Department of Public Health, MCSB will license manufacturers of cannabis products. This includes nearly all non-flower products (edibles, oils, tinctures, etc.) https://www.cdph.ca.gov

CalCannabis Cultivation Licensing – housed within the California Department of Food & Agriculture, CalCannabis will license cultivators and implement the state’s Track-and-Trace system to record movement of cannabis from seed to sale. https://www.cdfa.ca.gov

Our office has been serving the Cannabis Community since 2000. With more than 17 years of experience, our office are ready to help you succeed:

  1. To facilitate the formation of your very own For-Profit Cannabis Business (Retail – Commercial) as authorized under the Medicinal and Adult-Use Cannabis Regulation and Safety Act (“MAUCRSA”)  Click on a link for more specific information:
  2. What-are-the-types-of-cultivation-activity-licenses-available
  3. What are the Types of Manufacturing Licenses Available
  4. What Types of testing, Retailer, Distributor Licenses are Available
  5. To facilitate the formation of your very own For-Profit Cannabis Cultivation Cooperative Associations (Retail – Commercial) as authorized under the Medicinal and Adult-Use Cannabis Regulation and Safety Act (“MAUCRSA”) Three or more natural persons, who are engaged in the cultivation of any cannabis product, may form an association pursuant to this chapter for the purpose of engaging in any activity in connection with any of the following:(1) The cultivation, marketing, or selling of the cannabis products of its members.(2) The growing, harvesting, curing, drying, trimming, packing, grading, storing, or handling of any product of its members.(3) The manufacturing, selling, or supplying to its members of machinery, equipment, or supplies.(4) The financing of the activities that are specified by this section.Click on a link for more specific information:Can-i-convert-my-existing-non-profit-collective-to-a-for-profit-cannabis-cooperative-associations/
  6. To maintain proper Regulatory Compliance with the MMP or MAUCRSA
  7. To facilitate the formation of your very own Non-Profit Medicinal Cannabis Group (Private Club – Non-Retail – Non-Commercial) as authorized under the Medical Marijuana Program (‘MMP’) Health & Safety Code Section 11362.765.(a) Subject to the requirements of this article, the individuals specified in subdivision (b) shall not be subject, on that sole basis, to criminal liability under Section 11357, 11358, 11359, 11360, 11366, 11366.5, or 11570. This section does not authorize the individual to smoke or otherwise consume cannabis unless otherwise authorized by this article, nor shall anything in this section authorize any individual or group to cultivate or distribute cannabis for profit.(b) Subdivision (a) shall apply to all of the following:(1) A qualified patient or a person with an identification card who transports or processes cannabis for his or her own personal medical use.(2) A designated primary caregiver who transports, processes, administers, delivers, or gives away cannabis for medical purposes, in amounts not exceeding those established in subdivision (a) of Section 11362.77, only to the qualified patient of the primary caregiver, or to the person with an identification card who has designated the individual as a primary caregiver.(3)  An individual who provides assistance to a qualified patient or a person with an identification card, or his or her designated primary caregiver, in administering medicinal cannabis to the qualified patient or person or acquiring the skills necessary to cultivate or administer cannabis for medical purposes to the qualified patient or person.(c) A primary caregiver who receives compensation for actual expenses, including reasonable compensation incurred for services provided to an eligible qualified patient or person with an identification card to enable that person to use cannabis under this article, or for payment for out-of-pocket expenses incurred in providing those services, or both, shall not, on the sole basis of that fact, be subject to prosecution or punishment under Section 11359 or 11360.

    (Amended by Stats. 2017, Ch. 27, Sec. 137. (SB 94) Effective June 27, 2017.)

    11362.768.

    (a) This section shall apply to individuals specified in subdivision (b) of Section 11362.765.

    (b) No medicinal cannabis cooperative, collective, dispensary, operator, establishment, or provider who possesses, cultivates, or distributes medicinal cannabis pursuant to this article shall be located within a 600-foot radius of a school.

    (c) The distance specified in this section shall be the horizontal distance measured in a straight line from the property line of the school to the closest property line of the lot on which the medicinal cannabis cooperative, collective, dispensary, operator, establishment, or provider is to be located without regard to intervening structures.

    (d) This section shall not apply to a medicinal cannabis cooperative, collective, dispensary, operator, establishment, or provider that is also a licensed residential medical or elder care facility.

    (e) This section shall apply only to a medicinal cannabis cooperative, collective, dispensary, operator, establishment, or provider that is authorized by law to possess, cultivate, or distribute medicinal cannabis and that has a storefront or mobile retail outlet which ordinarily requires a local business license.

    (f) Nothing in this section shall prohibit a city, county, or city and county from adopting ordinances or policies that further restrict the location or establishment of a medicinal cannabis cooperative, collective, dispensary, operator, establishment, or provider.

    (g) This section does not preempt local ordinances, adopted prior to January 1, 2011, that regulate the location or establishment of a medicinal cannabis cooperative, collective, dispensary, operator, establishment, or provider.

    (h) For the purposes of this section, “school” means any public or private school providing instruction in kindergarten or any of grades 1 to 12, inclusive, but does not include any private school in which education is primarily conducted in private homes.

    (Amended by Stats. 2017, Ch. 27, Sec. 138. (SB 94) Effective June 27, 2017.)

    (Health & Saf. Code, §§ 11362.765, 11362.775).Click on a link for more specific information:

    http://www.maucrsa-cannabis-attorney.com/what-is-the-future-for-collectives-primary-caregivers-and-patients/

9. Expunge or AUMA – Clean-Up Criminal Record

The Adult Use of Marijuana Act “AUMA”, or more commonly known as Proposition 64, provides a legal mechanism to persons with prior sentences for violations of certain California, Cannabis offenses, i.e., Possession for Sale – Possession – Planting – Cultivating – Transporting – to petition the Court to recall or dismissal of the sentence thus restoring their good name and employability.

Most importantly for those who want to obtain a state issued cannabis business license but, have prior criminal convictions,

Under MAUCRA, an applicant shall not be denied a state license if the denial is based solely on any of the following:

A conviction or act that is substantially related to the qualifications, functions, or duties of the business or profession for which the application is made for which the applicant or licensee has obtained a certificate of rehabilitation,

A conviction that was subsequently [Expunged] dismissed pursuant to Section 1203.4, 1203.4a, or 1203.41 of the Penal Code or any other provision allowing for dismissal of a conviction.

What is the difference between the AUMA and Expungement?

 The difference between the AUMA, Business & Professions Code § 11361.8, and Expungement or Dismissal under Penal Code § 1203.4 is that if the court grants your request to resentence the offense as a misdemeanor or infraction under the AUMA, thereafter the crime will be treated as a misdemeanor or infraction for all purposes, automatically restoring all of your civil rights which had been denied because of the felony conviction including relief of your obligation to register as a narcotics offender under Health & Safety Code § 11590.

Click on a link for more specific information:

Clean-Up Criminal Record

 

Copyright © 2010 – 2018 Law Office of Wolfgang Kovach, Inc., all rights reserved.

___________________________________________________________________

Disclaimer
Please be aware that possessing, using, distributing and selling marijuana are all federal crimes and that this blog is not intended to give you any legal advice, merely legal issues to consider and inquire about when conducting business with a federally illegal substance. Please also note that even though marijuana is illegal under federal law, you will need to pay federal taxes as though you are a legal entity. This is true even if you are a state law not-for-profit entity.

IRS Circular 230 Notice: We do not provide tax advice. However, to insure compliance with certain U.S. Federal Tax Regulations, we are required to inform you of the following: To the extent this message or any attachments concern tax matters, they are not intended or written to be used and cannot be used by any taxpayer for the purpose of avoiding penalties that might be imposed on the tax payer. Further, please be advised that to the extent this message or any attachments concern tax matters, they are not intended or written to be used and cannot be used by any taxpayer for the purpose of promoting, marketing or recommending to any party any matters addressed herein.

What is the Future for Collectives, Primary Caregivers and Patients?

Non-Profit Medical Marijuana Program (MMP)The new Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA) added a sunset provision to Health & Safety Code Section 11362.775 of the Medical Marijuana Program (MMP) that authorized collectives and cooperatives and will be repealed one (1) year after the Bureau of Cannabis Control posts a notice on its Internet Web site that the licensing authorities have commenced issuing licenses pursuant to MAUCRSA.

However, Health & Safety Code Section 11362.765 remains in full-force for qualified patients, designated primary caregivers and individuals who provides assistance to a qualified patient or a person with an identification card, or his or her designated primary caregiver, in administering medicinal cannabis to the qualified patient or person or acquiring the skills necessary to cultivate or administer cannabis for medical purposes to the qualified patient or person.

What are the Protections and Limitation?

Protections

Health & Safety Code Section 11362.765 provides:

(a) Subject to the requirements of this article, the individuals specified in subdivision (b) shall not be subject, on that sole basis, to criminal liability under Section 11357 (possession of marijuana), § 11358 (cultivation of marijuana), § 11359 (possession of marijuana for sale), § 11360 (sale, transportation, importation, or furnishing of marijuana), § 11366 (maintaining place for purpose of unlawfully selling, furnishing, or using controlled substance), § 11366.5 (knowingly providing place for purpose of unlawfully manufacturing, storing, or distributing controlled substance), or § 11570 (place used for unlawful selling, furnishing, storing, or manufacturing of controlled substance as nuisance). This section does not authorize the individual to smoke or otherwise consume cannabis unless otherwise authorized by this article, nor shall anything in this section authorize any individual or group to cultivate or distribute cannabis for profit.

(b) Subdivision (a) shall apply to all of the following:Non-Profit Medical Marijuana Program (MMP)

(1) A qualified patient or a person with an identification card who transports or processes cannabis for his or her own personal medical use.

(2) A designated primary caregiver who transports, processes, administers, delivers, or gives away cannabis for medical purposes, in amounts not exceeding those established in subdivision (a) of Section 11362.77, only to the qualified patient of the primary caregiver, or to the person with an identification card who has designated the individual as a primary caregiver.

(3)  An individual who provides assistance to a qualified patient or a person with an identification card, or his or her designated primary caregiver, in administering medicinal cannabis to the qualified patient or person or acquiring the skills necessary to cultivate or administer cannabis for medical purposes to the qualified patient or person.

(c) A primary caregiver who receives compensation for actual expenses, including reasonable compensation incurred for services provided to an eligible qualified patient or person with an identification card to enable that person to use cannabis under this article, or for payment for out-of-pocket expenses incurred in providing those services, or both, shall not, on the sole basis of that fact, be subject to prosecution or punishment under Section 11359 or 11360.

(Amended by Stats. 2017, Ch. 27, Sec. 137. (SB 94) Effective June 27, 2017.)

Limitation

3.1 No More than Five (5) Qualified Patients Per Designated Primary Caregiver

1. Business & Professions Code § 26033(b) provides in part, A primary caregiver who cultivates, possesses, stores, manufactures, transports, donates, or provides cannabis exclusively for the personal medical purposes of no more than five specified qualified patients for whom he or she is the primary caregiver within the meaning of Section 11362.7 of the Health and Safety Code.

2. The designated primary caregiver cannot possess more than eight ounces of dried cannabis per qualified patient unless a physician’s recommendation or local guidelines allow amounts in excess of this limit. (H&S Code section 11362.77(a)-(c)); and

3. The designated primary caregiver cannot maintain more than six mature or twelve immature cannabis plants per qualified patient unless a physician’s recommendation or local guidelines allow amounts in excess of this limit. (H&S Code section 11362.77(a)-(c)).

3.2 Support. The designated primary caregiver will not receive remuneration for these activities other than:

1. For actual expenses, including reasonable compensation incurred for services provided to an eligible qualified patient or person with an identification card to enable that person to use cannabis under this article, or

2. For payment for out-of-pocket expenses incurred in providing those services. (B&P section 26033(b), H&S Code section 11362.765(c));

What are the Required Duties of a Primary Caregiver:

A primary caregiver is a person who is designated by a qualified patient and “has consistently assumed responsibility for the housing, health, or safety” of the patient. (§ 11362.5(e).)

California courts have emphasized the consistency element of the patient-caregiver relationship.

Although a “primary caregiver who consistently grows and supplies . . . medicinal marijuana for a section 11362.5 patient is serving a health need of the patient,” someone who merely maintains a source of
marijuana does not automatically become the party “who has consistently assumed responsibility for the housing, health, or safety” of that purchaser.

A person may serve as primary caregiver to “more than one” patient, provided that the patients and caregiver all reside in the same city or county. (§ 11362.7(d)(2).)

Primary caregivers also may receive certain compensation for their services. (§ 11362.765(c) [“A primary caregiver who receives compensation for actual expenses, including reasonable compensation incurred for services provided . . . to enable [a patient] to use marijuana under this article, or for payment for out-of-pocket expenses incurred in providing those services, or both, . . . shall not, on the sole basis of that fact, be subject to prosecution” for possessing or transporting marijuana].)

Possession and Cultivation Guidelines:

If a person is acting as primary caregiver to more than one patient under section 11362.7(d)(2), he or she may aggregate the possession and cultivation limits for each patient. For example, applying the MMP’s basic possession guidelines, if a caregiver is responsible for three patients, he or she may possess up to 24 oz. of marijuana (8 oz. per patient) and may grow 18 mature or 36 immature plants and must have supporting records readily available.

While the MMP 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.

That is, the immunities conveyed by Health & Safety Code, § 11362.765, have three defining characteristics:

(1) they each apply only to a specific group of people;

(2) they each apply only to a specific range of conduct; and

(3) they each apply only against a specific set of laws.

For example, Heath & Safety Code § 11362.765, subd. (b)(3), which grants immunity from certain state marijuana laws to one who provides assistance to a qualified patient or primary caregiver, in administering medical marijuana to the patient or acquiring the skills necessary to cultivate or administer marijuana for medical purposes to the patient, affords the specified criminal immunities only for providing the described forms of assistance. This subdivision does not mean a defendant may not be charged with cultivation or possession for sale on any basis. On the contrary, to the extent the defendant goes beyond the immunized range of conduct, i.e., administration, advice, and counseling, the defendant would subject himself or herself to the full force of the criminal law.

How Much will it Cost and What will I Receive?

Fixed Fee: This office’s fixed fee (fixed fee means no other fee will be charge for legal service described below is $3,500.00 (Three thousand, five hundred U.S. dollars)  and includes costs of $371.50 for: Agent Representation Service $125.00, Deluxe Entity Kit $127.00, File Non-Profit Articles of Incorporation $99.50, Parasec Service Fee 1 $45.00, Surcharge 1 $4.50, Agency Filing Counter Fee 1 $15.00, Agency Incorporation Filing Fee 1 $30.00, Certified Copy $5.00, Agency Certified Copy Cost 1 $5.00.

Documents You will Receive:

  1. Prepare and file Articles of Incorporation with the Secretary of State by Standard Service
  2.  Obtain Corporate Kit, Corporate Seal
  3. Prepare By-Laws
  4. Unanimous Consent of Directors (1st meeting of directors that releases the incorporators and elects the directors, offices and managing member.
  5. Membership Certificates (Issued to Stakeholders)
  6. Prepare Membership Agreements: Designation of Primary Caregiver, Membership Accountability File Folder Check-List, Membership & Association Agreement, Release and Waiver of Liability-Indemnity Agreement, HIPPA – Medical Release of Physician’s Recommendation/Statement, Member Cultivation, Transportation & Possession Agreement, Member Transportation & Possession Agreement, Supporting Documents Patient Membership Number Template – Download all to CD (in .pdf format)
  7. Facilitate Client with online Tax ID number
  8. Prepare and file mandatory Secretary of State, Statement of Information ($20.00 filing fee included)
  9. Act as point of contact for Paracorp Incorporated (agent for service of process)
  10. Prepare Paracorp Incorporated  Annual Information sheet
  11. Prepare notices and minutes for special and annual meetings
    This Agreement includes complimentary six (1) year of telephonic nonprofit corporate compliance.  This free services is to ensure that any changes in directors, offices and managing member is properly documented and filed with the secretary of state).

How You Will You Receive Your Documents

You will receive your documents in (3) three separate notebooks: 1. The Original Corporate Kit with Corporate Seal, 2. Supporting Records Binder for All patients and 3. Supporting Records Binder.

1. The Original Corporate Kit with corporate Seal – available in Black, Green and Burgundy – should be kept in a safe place as a backup to the Supporting Records binder for All Patients and includes:
Non-Profit Medical Marijuana Program MMP

  1. Corporate Kit, Corporate Seal ($127.00 purchase price included),
  2. Articles of Incorporation with the Secretary of State by Standard Service ($99.50 Service – Filing Fee included,
  3. Prepare and file mandatory Secretary of State, Statement of Information ($20.00 filing fee included),
  4. Act as point of contact for Paracorp Incorporated (agent for service of process),
  5. Prepare Paracorp Incorporated  Annual Information sheet and Annual Statutory Agent for Service of Process Agrement ($125 annual fee included),
  6. Unanimous Consent of Directors (1st meeting of directors that releases the incorporators and elects the directors, offices and managing member,
  7. Prepare By-Laws,
  8. Membership Certificates (Issued to Stakeholders),
  9. Membership Agreements: Designation as primary caregiver. Membership Accountability File Folder Check-List, Membership & Association Agreement, Release and Waiver of Liability-Indemnity Agreement, HIPPA –
    Medical Release of Physician’s Recommendation/Statement, Member Cultivation, Transportation & Possession Agreement, Member Transportation & Possession Agreement, Supporting Documents Patient Membership Number Template –
    Download all to CD (in .pdf format).

2. “The Supporting Records Binder for All patients” holds all of the formation documents referenced above AND all of the completed membership documents as required by California Law.  The documents in this binder are not stapled so that additional copies can be easily made.  This binder will be used to make the “Supporting Records Binder”.

3. The “Supporting Records Binder for Primary Caregiver” holds just the Article of Incorporation, Federal Tax ID number, Cultivation or Transportation Agreement and the documentation of each patient to show compliance with the possession and cultivation guidelines. This binder only contains those patient agreements that the primary caregiver is cultivating for or transporting to.

 

 

 

 

 

 

Copyright © 2010 – 2018 Law Office of Wolfgang Kovach, Inc., all rights reserved.

______________________________________________________________________

Disclaimer
Please be aware that possessing, using, distributing and selling marijuana are all federal crimes and that this blog is not intended to give you any legal advice, merely legal issues to consider and inquire about when conducting business with a federally illegal substance. Please also note that even though marijuana is illegal under federal law, you will need to pay federal taxes as though you are a legal entity. This is true even if you are a state law not-for-profit entity.

IRS Circular 230 Notice: We do not provide tax advice. However, to insure compliance with certain U.S. Federal Tax Regulations, we are required to inform you of the following: To the extent this message or any attachments concern tax matters, they are not intended or written to be used and cannot be used by any taxpayer for the purpose of avoiding penalties that might be imposed on the tax payer. Further, please be advised that to the extent this message or any attachments concern tax matters, they are not intended or written to be used and cannot be used by any taxpayer for the purpose of promoting, marketing or recommending to any party any matters addressed herein.

Clean-Up Your Record

How Can I Restore All of My Civil Rights after a Cannabis Felony conviction?

Proposition 64, provides a legal mechanism to persons with prior sentences for violations of certain California, Cannabis offenses, i.e., Possession for Sale – Possession – Planting – Cultivating – Transporting – to petition the Court to recall or dismissal of the sentence thus restoring their good name and employability.

How Can I Restore All of My Civil Rights after a Cannabis Felony conviction?

What is the difference between the AUMA and Expungement?

 AUMA

The difference between the AUMA, Business & Professions Code § 11361.8, and Expungement or Dismissal under Penal Code § 1203.4 is that if the court grants your request to resentence the offense as a misdemeanor or infraction under the AUMA, thereafter the crime will be treated as a misdemeanor or infraction for all purposes, automatically restoring all of your civil rights which had been denied because of the felony conviction including relief of your obligation to register as a narcotics offender under Health & Safety Code § 11590.

Section 11361.8(h) provides, “Any felony conviction that is recalled and resentenced under subdivision (b) or designated as a misdemeanor or infraction under subdivision (f) shall be considered a misdemeanor or infraction for all purposes. Any misdemeanor conviction that is recalled and resentenced under subdivision (b) or designated as an infraction under subdivision (f) shall be considered an infraction for all purposes.”

Misdemeanor or infraction for all purposes

If the court grants the request to resentence the offense as a misdemeanor or infraction, thereafter the crime will be treated as a misdemeanor or infraction for all purposes. Unlike Expungement or Dismissal under Penal Code § 1203.4 or Proposition 47 under Penal Code § 1170.18(k), the resentencing does not preclude the right to own or possess firearms.

 Expungement or Dismissal under section Penal Code 1203.4

However, in any subsequent prosecution of the defendant for any other offense, the prior conviction that was expunged or dismissed under section Penal Code 1203.4 may be pleaded and proved and shall have the same effect as if probation had not been granted or the accusation or information dismissed. The order shall state, and the probationer shall be informed, that the order does not relieve him or her of the obligation to disclose the conviction in response to any direct question contained in any questionnaire or application for public office, for licensure by any state or local agency, or for contracting with the California State Lottery Commission.

Dismissal of an accusation or information pursuant to this section does not permit a person to own, possess, or have in his or her custody or control any firearm.

Dismissal of an accusation or information underlying a conviction pursuant to this section does not permit a person prohibited from holding public office as a result of that conviction to hold public office.

How much does it Cost to Petition for relief under the AUMA and is it a Fixed Fee?

Yes, my office charges a fixed attorney fee of $1,750.00 (One thousand, Seven hundred fifty, U.S. dollars). Fixed fee means no other attorney fee will be charge for AUMA , Health and Safety Code, § 11361.8 resentencing or dismissal legal service that includes; preparing your petition, filing it with the Court, serving the petition on the District Attorney’s office, and appearing in-court with you for hearing on your Petition. Fixed Fee does NOT include Court costs of approximately $150.00 or costs to locate your file.

What’s the Next Steps Do I Need to Restore All of My Civil Rights after a Cannabis Felony conviction?

The resentencing provision under Health & Safety Code Section 11361.8.(a) et. seq., permits persons previously convicted of designated marijuana offenses to obtain a reduced conviction or sentence, if they would have received the benefits of the AUMA had it been in place when the crime was committed and

If the crime was for conduct now legal under the AUMA, there is a provision requiring the court to “dismiss and seal” the record of conviction if you have completed your sentence.

Eligibility of Person Currently Serving a Sentence

A person currently serving a sentence for a conviction, whether by trial or by open or negotiated plea, who would not have been guilty of an offense, or who would have been guilty of a lesser offense under the Control, Regulate and Tax Adult Use of Marijuana AUMA had that AUMA been in effect at the time of the offense may petition for a recall or dismissal of sentence before the trial court that entered the judgment of conviction in his or her case to request resentencing or dismissal in accordance with Sections 11357, 11358, 11359, 11360, 11362.1, 11362.2, 11362.3, and 11362.4 as those sections have been amended or added by that AUMA. (Unless otherwise stated Sections cited are Health & Safety Code)

There are Three (3) Eligibility Requirements.

There are three (3) eligibility requirements specified by section 11361.8(a) for resentencing of persons currently serving a sentence:

  1. The resentencing must be for one or more violation(s) of sections 11357, 11358, 11359, 11360,
  2. The person must be currently serving a sentence for one or more Sections listed above, and
  3. The person “would not have been guilty of an offense or who would have been guilty of a lesser offense under the AUMA had it been in effect at the time of the offense.

Certain factors must be taken into account to be eligible for resentencing or dismissal such as how old you were, been between the ages of 18 and 21, or over 21 at the time of the offense, or on the type and quantity of marijuana involved. For example, section 11362.1(a)(1) makes it legal for a person over the age of 21 to possess not more than 28.5 grams of marijuana not in the form of concentrated cannabis requiring the court, upon your Petition, to “dismiss and seal” the record of conviction.

Mandatory Presumption Your Petition Satisfies the three (3) Three Eligibility Requirements.

Step 1 – Upon receiving your petition the court shall presume the petitioner satisfies the criteria in subdivision (a) unless the party opposing the petition, generally the District Attorney’s Office, proves by clear and convincing evidence that the petitioner does not satisfy the three (3) criteria.

Step 2 – If you satisfy the three (3) criteria in subdivision (a), the court shall grant the petition to recall the sentence or dismiss the sentence because it is legally invalid unless the court determines (proper burden of proof of “dangerousness” is preponderance of the evidence) that granting the petition would pose an unreasonable risk of danger to public safety. Section 11361.8. (b)

In this regard the court may consider “(1) Your criminal conviction history, including the type of crimes committed, the extent of injury to victims, the length of prior prison commitments, and the remoteness of the crimes; (2) Your disciplinary record and record of rehabilitation while incarcerated; (3) Any other evidence the court, within its discretion, determines to be relevant to deciding whether a new sentence would result in an unreasonable risk of danger to public safety.”

Eligibility of Person Who Have Completed Their Sentence

Sections 11361.8(e) – (g) allow persons who have completed their sentence for qualified marijuana offenses to apply to the court that entered judgment in their case for designation of the offense as a misdemeanor or infraction, or dismissal as if the Act would have been in effect at the time the crime was committed.

There are Three (3) Eligibility Requirements.

If you have completed your sentence, there are three eligibility requirements specified by section 11361.8(e) for redesignation or dismissal of qualified offenses:

  1. You completed your sentence for an offense listed in the Act: sections 11357, 11358, 11359, 11360.
  2. You must have completed the sentence for one of the designated crimes.
  3. The person “would not have been guilty of an offense or who would have been guilty of a lesser offense under the [Act] had that Act been in effect at the time of the offense.” (§ 11361.8(a).)

Certain factors must be taken into account to be eligible for resentencing or dismissal such as how old you were, been between the ages of 18 and 21, or over 21 at the time of the offense, or on the type and quantity of marijuana involved. For example, section 11362.1(a)(1) makes it legal for a person over the age of 21 to possess not more than 28.5 grams of marijuana not in the form of concentrated cannabis requiring the court, upon your Petition, to “dismiss and seal” the record of conviction.

Basic eligibility is established by you meeting just these three requirements. (§ 11361.8(f).) The AUMA does not disqualify a person simply because he or she has any particular prior criminal offense, even “super strikes.”

The hearing will be to confirm your eligibility for relief: that you have been convicted of a qualified offense, that you completed a sentence for a qualified crime, and that you would have been convicted of a lesser offense, or no crime at all, had the AUMA been in effect when the offense was committed. As to the last issue, it may be necessary to determine defendant’s age at the time the crime was committed, or the nature and quantity of the marijuana. To overcome the presumption of eligibility, the prosecution must present clear and convincing evidence that the defendant is not eligible. There is no determination of dangerousness in this process.

The provisions of this section shall apply equally to juvenile delinquency adjudications and dispositions under Section 602 of the Welfare and Institutions Code if the juvenile would not have been guilty of an offense or would have been guilty of a lesser offense under the AUMA.

Section 602 permits the criminal prosecution of a child suspected of committing a misdemeanor or felony. If the charges are sustained, the child may be declared a ward of the court under the Probation Department or California Youth Authority supervision.

No refilling of charges

Section 11361.8(d) specifies that “under no circumstances may resentencing under this section result in the reinstatement of charges dismissed pursuant to a negotiated plea agreement.” With this provision, the Act makes it clear that although prior plea negotiations resulted in a certain disposition, the fact that the defendant receives a reduced disposition under the Act is not grounds for reopening those discussions.

Sealing of Record Only after Sentence Completed

The Act does not provide persons currently serving a sentence the means to seal the conviction if the recall of the sentence is based on the fact that the conduct of the defendant is no longer criminal. Such a right is given to persons who petition for relief after the sentence has been completed. (Section 11361.8(f).

 

Copyright © 2010 – 2018 Law Office of Wolfgang Kovach, Inc., all rights reserved.

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Disclaimer
Please be aware that possessing, using, distributing and selling marijuana are all federal crimes and that this blog is not intended to give you any legal advice, merely legal issues to consider and inquire about when conducting business with a federally illegal substance. Please also note that even though marijuana is illegal under federal law, you will need to pay federal taxes as though you are a legal entity. This is true even if you are a state law not-for-profit entity.

IRS Circular 230 Notice: We do not provide tax advice. However, to insure compliance with certain U.S. Federal Tax Regulations, we are required to inform you of the following: To the extent this message or any attachments concern tax matters, they are not intended or written to be used and cannot be used by any taxpayer for the purpose of avoiding penalties that might be imposed on the tax payer. Further, please be advised that to the extent this message or any attachments concern tax matters, they are not intended or written to be used and cannot be used by any taxpayer for the purpose of promoting, marketing or recommending to any party any matters addressed herein.

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