Medical Pot Stores' Profits Questioned

Medical Pot Stores' Profits Questioned
Posted by CN Staff on July 24, 2007 at 06:49:30 PT
By Dan Abendschein, Staff Writer
Source: Whittier Daily News
California -- The recent busts of medical marijuana dispensaries have raised questions about the revenue the operations collect. Four dispensaries last week were accused of operating as "super-sized retail drug-dealing centers," turning tremendous profits and accepting questionable doctor's recommendations. The dispensaries were investigated by the Drug Enforcement Administration, which can charge them with violating federal drug laws, regardless of whether or not they make a profit.
However, the agency claims dispensaries it went after last week were operating as for-profit operations, which may not be permitted by state laws that set guidelines for growing, possessing, and distributing medical marijuana. Two of the busted dispensaries, the "Yellow House" and West Hollywood Compassionate Caregivers, are located in Los Angeles. The other two are in Corona, in Riverside County, and Morro Bay on the Central Coast. The DEA, which carried out the investigation, claims that the two owners of the "Compassionate Caregivers" chain, which has seven dispensaries in California, amassed $95 million in profit, and owned luxury cars and real estate in Costa Rica. The DEA said that based on complaints of young, seemingly healthy people buying pot at the busted dispensaries, the operators are "no different than any other drug trafficker." Some in the medical marijuana community spoke out against operators that act more like big retail stores than medical collectives. "Some of these dispensaries have kids with prescriptions from shady doctors lining up outside the store," said the man who operates the Holistic Co-op in Los Angeles. "That part of the medical marijuana community is a joke." Riley, who preferred not to have his last name in print, said that he only helped genuinely sick patients, and always called his patient's doctors to verify they were legitimate. But others rallied to the defense of the dispensaries. "A business grossing the kind of numbers released by the DEA is not making that much money," said Chris Fusco of the Americans for Safe Access organization. "Both the federal and state governments need to give clear guidelines so there is no confusion for dispensary operators." Under federal law, the DEA can arrest any dispensary owners for selling marijuana. State law, which permits medical marijuana, is unclear. The 2003 medical marijuana laws do not "authorize any individual or group to cultivate or distribute marijuana for profit." "Though the law is clear that profit is not authorized, it is not explicitly declared illegal by state law either," said Bruce Margolin, an attorney with the California branch of the National Organization for the Reform of Marijuana Laws. Margolin noted that in a state court case, the People vs. Urziceanu, lawyers successfully defended a dispensary where people were asked for suggested donations in return for medical marijuana, and asked to sign forms saying that the recipient understood the donation was meant to "ensure continued operation" of the dispensary and that it "in no way constitutes commercial promotion." However, Margolin added that a similar case, People vs. Mench, where the court ruled in favor of the defendant, is now being appealed by prosecutors. The profitability of the medical marijuana business has also come to the attention of the Board of Equalization, which administers state taxes. In February, the board sent out a memo telling dispensaries that any commercial transactions would be subject to sales tax, regardless of whether the sale was allowed by federal law or not. "We sent a memo making it clear to dispensaries that they could file taxes without telling us what they were selling," Anita Gore, a spokesperson at the Board of Equalization. Gore said that researchers with the organization looked at the number of dispensaries and potential sales, and saw that the state was missing out on a decent source of revenue. Chris Fusco says that without more clear state regulation, many operators find the best strategy is to run the dispensary as a not-for-profit business, or even file for non-profit status. In either case, says Fusco, a dispensary would set clear staff salaries and reinvest any profit back into services for the patients of the collective. One operator of a West San Fernando Valley-based dispensary said that he keeps careful books showing he is not running his operation for profit, pays taxes, and makes sure his customers are genuine. "There is always a small group of people who abuse the system or act like profiteers, so it is to our benefit when more people use the model we use here," said the operator, who preferred not to be identified by name. He said he was part of a group of about 70 dispensaries under a group named the Greater Los Angeles Caregiver's Alliance that runs as a nonprofit. "Our goal is (to) set up a model that is even more stringent than state or city regulations would be," said the operator. Source: Whittier Daily News (CA)Author: Dan Abendschein, Staff WriterPublished: July 24, 2007Copyright: 2007 MediaNews Group, Inc.Contact: dan.abendschein Website: Articles & Web Sites:California NORML For Safe Access Target Owners Renting To Pot Dispensaries Marijuana Outlets May Be Closed
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Comment #37 posted by whig on July 25, 2007 at 18:20:31 PT
Roe v. Wade is correct.
The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.
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Comment #36 posted by whig on July 25, 2007 at 18:19:02 PT
The fourth amendment does contain a right of privacy in one's person.
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Comment #35 posted by whig on July 25, 2007 at 18:14:05 PT
500 billion dollars worth of cannabis. Hm. For that you can share the oil, too.
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Comment #34 posted by whig on July 25, 2007 at 18:13:19 PT
goneposthole #29
It would work, too. Fifty billion dollars worth of cannabis buys a lot of good will, and we wouldn't have to fight our way out of the country at all.
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Comment #33 posted by FoM on July 24, 2007 at 20:55:07 PT
Video: 2 of 3 Pot Shops Shut Down
July 24, 2007
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Comment #32 posted by mayan on July 24, 2007 at 18:26:03 PT
The only reason certain drugs are illegal in the first place is so the gov't can inflate their price and sell the drugs themselves. Plenty of Afghan heroin floating around these days thanks to the U.S. & British militaries!Jmoran, you seem awful terrified of Ron Paul. I'm just curious, who do you support for Prez?THE WAY OUT IS THE WAY IN...9/11 Truthers, William Rodriguez,Cindy Sheehan & Ed Asner - Live In LA - Aug. 17: WTC Collapse Video Analysis Highlights Unmistakable Implosions: Smoke Emerging From WTC 2 Seconds Before Collapse Thermite Related Aluminum Oxide? Did the White House Know America was Safe on 9/12/2001? 9/11 truth Music Video: Determined To Strike In US With WMD This Summer: Only Impeachment, Removal or General Strike Can Stop Him: WAS AN INSIDE JOB - OUR NATION IS IN PERIL:
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Comment #31 posted by runderwo on July 24, 2007 at 17:38:00 PT
You know what's stupid about this?
IF... IF these dispensaries were operating outside the law, just think about it for a second. Last year, we got a ruling that said that the dispensaries are illegal no matter whether they are complying with Prop 215 or not. Hey, if they're damned if they do damned if they don't, why not go for the big bucks? Rake it in while you can, because the ATF agents might show up and shut you down tomorrow. Isn't that just American business?Comments re: Roe v. Wade. Ron Paul's personal views on abortion don't matter. Roe v. Wade is a constitutional issue. The court invented a right to privacy that does not exist in the constitutional text, and used that to overturn all state abortion policies. The Constitution should be amended if this right to privacy is to be guaranteed by the federal government. Federal government powers should not be invented by an activist court. That is the same mechanism by which we ended up with Raich, which Paul also disagrees with. A reasonable person can be for or against both Roe v. Wade and Raich, but not flip-flop.Note: The federal government was already not allowed by the Constution to interfere in state abortion policies, thanks to the 10th Amendment. Roe v. Wade goes a step further says that states are not ALLOWED to have their own first-trimester abortion policies because the federal government must now protect a (constructed) right to privacy. This is often misunderstood.Again, if a right to abortion, or to general self-determination in medicine is to be guaranteed even if state policy would disagree, it needs to be via Constitutional amendment. The Federal government only gets to tell us we CANNOT use medical marijuana by the same reasoning used to tell us we MUST permit first-trimester abortions -- by a liberal interpretation of the Constitution that is not supported by the text, but is supported anyway by well-meaning but misguided activists.
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Comment #30 posted by FoM on July 24, 2007 at 17:23:25 PT
Anything is better then where we are now. I just saw on the news that we are building a big Embassy in Iraq. When we leave Iraq I want us to leave.
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Comment #29 posted by goneposthole on July 24, 2007 at 17:10:18 PT
What if...
the US gov bought 500 billion dollars worth of cannabis, rolled it into huge Bob Marley rolling paper reefers, and bombed Iraq and Afghanistan with 500 billion dollars worth of reefers? It would have given the enlisted personnel in the US armed forces something to do at home: Roll reefers for Iraqis and Afghanis. Not a bad job to have. 500 billion dollars worth of fireworks could have been saved for the Fourth of July celebration. Happy Iraqis and Afghanis with 500 billion dollars worth of reefers, courtesy of the US Armed Forces, and 500 billion dollars worth of fireworks on the Fourth of July. Seems all worth it to me; freedom in action, man.Everybody would forget about the war.It would be peace in a time of universal deceit.
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Comment #28 posted by FoM on July 24, 2007 at 17:02:40 PT
That link made a lot of sense to me. Thanks.
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Comment #27 posted by greenmed on July 24, 2007 at 16:46:14 PT
strange mindset
This article describes a social model of authoritarianism, based on attitude survey evidence... seems that high-RWAs would be difficult to persuade with any kind of argument we might offer. On the other hand, as the Cannabis reform movement continues to gather steam and pick up "authority" (acceptance by the PTB), the RWAs would tend to self-herd away from prohibition.
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Comment #26 posted by FoM on July 24, 2007 at 16:30:05 PT
I don't know what to make of this case. I wish him well. 
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Comment #25 posted by whig on July 24, 2007 at 16:23:58 PT
I think the RFRA is very relevant but I hope he wasn't really selling. I would rather see someone accept donations and provide medicine to the needy and reserve some for sacramental use if you want to make the religious case. I don't believe in religion for profit.
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Comment #24 posted by FoM on July 24, 2007 at 16:18:18 PT
 AP: LA Minister Cites Religious Protection
LA Minister Cites Religious Protection in Marijuana Defense Tuesday, July 24, 2007
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Comment #23 posted by FoM on July 24, 2007 at 15:10:00 PT
I agree with what you are saying. It is a strange mindset to me. One thing I really work hard on is being consistent and saying why I believe like I do to anyone who asks me. I have many issues that I care about and are important to me personally.
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Comment #22 posted by whig on July 24, 2007 at 15:01:11 PT
And the same people are against making health care available to everyone too. So you can be "Pro Life" and that means as soon as someone is born then they don't care any more.
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Comment #21 posted by whig on July 24, 2007 at 14:59:41 PT
Many of those people who call themselves Pro Life are also Pro War and that makes me think they aren't really thinking through their moral principles.
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Comment #20 posted by FoM on July 24, 2007 at 14:26:46 PT
Video Link
Medical Marijuana Users Testify of Pot's ImportanceJuly 24, 2007
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Comment #19 posted by FoM on July 24, 2007 at 14:16:57 PT
I agree because you can be against abortion but be Pro Choice. If a person says they are Pro Life it means that woman should be criminalized if they can overturn Roe vs. Wade. More jails and more people being made into criminals isn't the way I see the future.
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Comment #18 posted by jmoran on July 24, 2007 at 14:07:07 PT
Ron Paul
I just watched Ron Paul on YouTube on his web site at a Right to Life convention talking about Row vs. Wade should be overturned. I thought he just personally didn't agree with abortion. He seems down right determined to get it changed if he makes President to me. 
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Comment #17 posted by FoM on July 24, 2007 at 13:28:57 PT
Press Release from MPP
House to Vote on Medical Marijuana Amendment as Newest State Law Takes Effect, Raids EscalateJuly 24, 2007Research Reveals New Evidence of Marijuana's Medical ValueWASHINGTON, D.C.  The U.S. House of Representatives will vote  possibly as soon as Wednesday, July 25  on an amendment to prohibit the U.S. Department of Justice from interfering with state medical marijuana laws. The vote comes amid a burst of activity on the medical marijuana front, including positive actions by several state legislatures, escalating DEA attacks on medical marijuana providers, and new research both affirming marijuana's medical benefits and debunking a key claim made by opponents.The amendment, known as the Hinchey-Rohrabacher amendment  after Congressmen Maurice Hinchey (D-NY) and Dana Rohrabacher (R-CA)  received a record 163 votes last year, when only 11 state medical marijuana laws were in effect.Complete Press Release:
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Comment #16 posted by dongenero on July 24, 2007 at 13:08:58 PT
I had considered..
Miss Swollen Calyx.............but it isn't as fun sounding as Stickybuds.
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Comment #15 posted by FoM on July 24, 2007 at 12:29:07 PT
You made me laugh. Thanks.
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Comment #14 posted by NikoKun on July 24, 2007 at 12:14:50 PT
what a joke...
The DEA is such a joke... bunch of lying insane morons...Do anything they can against Marijuana huh... Arrest sick people, lie and say that Marijuana doesn't work for them... Lie about the despenaries and claim they're selling pot to healthy people...We need to get rid of the DEA... what a worthless useless corrupt lying sack of garbage.
Besides that the DEA has never met any benchmark put on them, they haven't put a dent in anything... and then they go and lie to everyone and claim their job is succeeding...
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Comment #13 posted by herbdoc215 on July 24, 2007 at 12:09:10 PT
I would like to see books of UniMed (& Ely Lily)
pharmaceuticals in Indiana who makes Marinol (THC pills  $20 US each 5 mg pill) for sale by gov't lackeys (Rite-Aid, etc.) that was just shown to be ALMOST as effective ( only at 8x, yes I said 8x the recommended dosage)as whole smoked cannabis (gov't swag at that;) in a DOUBLE-BLIND study! So now DEA fools and player haters, whom is profiting from whom! FYI..average 'joint' from Cali clubs contains  100mg of THC instantly available so at Rite-aid prices thats worth $400....seems like a hell of a deal at $10 to me, but what do I know?
peace, steve
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Comment #12 posted by dongenero on July 24, 2007 at 12:09:10 PT
County Fair
Just like micro-brewed beer competition. Why not?Maybe they could crown a Miss Stickybuds too!
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Comment #11 posted by FoM on July 24, 2007 at 12:04:48 PT
I hope for a day when a County Fair will have a Cannabis display and give them ribbons like other plants. 
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Comment #10 posted by whig on July 24, 2007 at 12:01:54 PT
Shouldn't there be county fairs with cannabis crops being sampled?
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Comment #9 posted by FoM on July 24, 2007 at 10:50:12 PT
From the beginning of time people would fuss with their gardens and they did great. Big healthy vegetables came from those people's gardens. Plants and people are meant to work together. We get oxygen from the plants and when people use to say that my plants are happy because I talk to them it really is just people giving the plants Co2 that they need to grow well. Factory farms lack that and will never be as good as anything grown by someone who loves their plants.
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Comment #8 posted by Sam Adams on July 24, 2007 at 10:31:03 PT
Big corporations/government will always screw up cannabis.Try this experiment. Go into the local McDonalds, order a burger, and pull out the lettuce and tomato.Now, go down to the local farmers market, and buy an organic head of lettuce and tomato. Compare the two and ask why anyone would want cannabis from a huge corporate/govt agency. The Canadian and US govt. cannabis is the equivalent of the plastic-pink tomatoes you get at McDonald's & BK.
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Comment #7 posted by jmoran on July 24, 2007 at 10:22:14 PT
contaminated pot from Canada
I would not put it past the Government to let cannabis be contaminated. Then once the people get sick from Cancer from the Heavy Metals then they can say we told you cannabis is dangerous. 
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Comment #6 posted by Sam Adams on July 24, 2007 at 10:10:48 PT
This must be one of the few times in the history of the capitalist-crazed USA that someone has been criticized for getting rich! My god, has the DEA visited the east coast of Florida lately? There are scores of $10 million+ mansions popping up in Palm Beach like mushrooms after a spring rain.How many are owned by those profiting from Big Pharm? I don't know. We do have 6 million children taking Prozac, though, and countless other millions of kids on Zoloft, Ritalin, etc, etc. SOMEBODY is getting rich - Big Pharm is marking up their prices by THREE TIMES what they charge in Europe and Canada!To me, this struggle is a facinating window into our culture & society. I've mentioned before how these dispensaries go against the grain of our system - almost all are locally owned & operated Mom & Pop operations. That type of business and the middle class that goes with it have been systematically destroyed by our rich elite & political class over the last 50 years.Look at the current model of dispensaries - no way for the IRS to tax them, because they're federally illegal. No way for private equity firms to invest in them. No way for a corporate pirate to buy them & steal everyone's pension money. No way to buy them & shift all the labor to slaves in China to increase profits for some rich a$$hole who isn't creative enough to come up with his own way to make money.The corporate/political elite just can't stand it! Medical MJ is such a charged issue. There is so much more going on than the herb itself. Just like the buzz from the comtemplative herb, this issue forces us to confront the way we live and the way our system works.For me, it demonstrates that the government beast MUST always be minimized and kept as small as possible. Look what's happened - the govt told us we needed the FDA to keep drugs pure and safe back in 1920. When they took away our basic freedom to choose & consume your own medication for your body. Now, the government is just a mafia protection outfit for Big Pharm. The Govt. has made it illegal for Medicare to negotiate prices with Big Pharm! That is absurd! A total outrage.  Look as the goverment sends its DEA Luco Brazzi to beat up and wipe out the oppostion to their racket. It's disgusting! We must stop this reckless government takeover of lives at once, before the consequences become even more dire than they already are. Being beaten and jailed for trying to treat your own illness.
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Comment #5 posted by whig on July 24, 2007 at 09:50:14 PT
Storm Crow
There was some discussion in the comments that they might be selling contaminated pot for those prices.
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Comment #4 posted by Storm Crow on July 24, 2007 at 08:47:00 PT
That isn't much of a mark up!
Get a load of what our neighbor to the north is doing! Talk about price gouging!
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Comment #3 posted by Truth on July 24, 2007 at 08:43:00 PT
No one has ever cheated or abused the system at Walgreens. I can tell because the cops haven't tried to shut them down yet. Go figure....
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Comment #2 posted by museman on July 24, 2007 at 08:29:56 PT
damn hypocrites
"The DEA, which carried out the investigation, claims that the two owners of the "Compassionate Caregivers" chain, which has seven dispensaries in California, amassed $95 million in profit, and owned luxury cars and real estate in Costa Rica."Sounds like rich-people-jeolousy to me, you know, 'don't want any "new money" polluting the old order. Don't want anybody associated 'marijuana' getting empowered either, they might use some of that money to help people, or to bribe politicians.
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Comment #1 posted by smoknjoe on July 24, 2007 at 07:26:00 PT:
pop dispensaries
cvs & walgreens can make millons in profit while there drugs side effects make people sick or can kill them and pot dispensaries whose product has never killed anyone is not alloyed to make a penny. Go Figure! I give up trying to understand politics. Did anyone ask any qustions about the pot laws on the Utube debate last night? I didn't see any.
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