California and Their Laws on Medical Marijuana

Sellers of marijuana as a medicine here don’t fret about raids any more. They’ve stopped stressing over where to hide their stash or how to move it unseen.

Now their concerns involve the state Board of Equalization, which collects sales tax and requires a retailer ID number. Or city planning offices, which insist that staircases comply with the Americans With Disabilities Act. Then there is marketing strategy, which can mean paying to be a “featured dispensary” on a Web site for pot smokers.

After years in the shadows, medical marijuana in California is aspiring to crack the commercial mainstream.

“I want to do everything I can to run this as a legitimate business,” says Jan Werner, 55 years old, who invested in a pot store in a shopping mall after 36 years as a car salesman.

State voters decreed back in 1996 that Californians had a right to use marijuana for any illness — from cancer to anorexia to any other condition it might help. But supplying “med pot” remained risky. The ballot measure didn’t specify who could sell it or how. The state provided few guidelines, leaving local governments to impose a patchwork of restrictions. Above all, because pot possession remained illegal under U.S. law, sellers had to worry about federal raids.

But in February, the Justice Department said it would adhere to President Barack Obama’s campaign statement that federal agents no longer would target med-pot dealers who comply with state law. Since then, vendors who had kept a low profile have begun to expand, and entrepreneurs who had avoided cannabis have begun to invest.

Some now are using traditional business practices like political lobbying and supply-chain consolidation. Others are seeking capital or offering investment banking for pot purveyors. In Oakland, a school offers courses such as “Cannabusiness 102″ and calls itself Oaksterdam University, after the pot-friendly Dutch city. As shops proliferate, there are even signs the nascent industry could be heading for another familiar business phenomenon: the bubble.

Medical use of pot now is legal in 13 states. It is also facing some resistance. New Hampshire’s Democratic governor, John Lynch, vetoed a med-pot bill this month, citing inadequate safeguards. Los Angeles, which passed a moratorium on new dispensaries in 2007, is trying to close a loophole that has led to an explosion of new ones.

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