Week One TWB Business Guide – The Law, Your Card, and Paperwork

Welcome to WEEK ONE of the 10 week Marijuana Business Training Course!


Hopefully you completed last week’s assignment to familiarize yourself with laws and basic principles. If any of the following summaries sound foreign to you, then we recommend you review the TWB Dispensary Guide, and go a bit more in-depth in your research. After reading the following sections, be sure to take things a step further to understand how this information fits in with the regulations of your particular area, and do any additional research on anything that was unclear.


The Law

Among other things, it is important that you understand the basic differences between federal and state laws, and the contradictions surrounding these two governing bodies. One of the biggest reasons that people think dispensaries aren’t legal is because federally, Marijuana is classified as a schedule 1 substance. According to federal law, schedule 1 substances have the high potential for abuse and have no recognized medical use. Other substances that are also schedule 1 include Heroin, LSD and MDMA. Clearly case studies and advancements in the medical Marijuana community have proven that there is a recognized medical use for Marijuana, and this classification is an antiquated law that needs to change. In November 2009, the American Medical Association recommended that Congress reclassify Marijuana as a drug having possible medical benefits. The fact that it has been five years since this recommendation shows how slowly it takes for some things to change, but it is also evidence that professional communities back the people’s voice as well.


As a business owner, what you need to understand is that your local, county and state law enforcement are NOT federal agents and are not bound to federal law. They are bound and sworn in to uphold state law, and they cannot bust you on federal laws or offenses. The only times federal officers have arrested anyone is when the dispensaries have blatantly and arrogantly disregarded all state laws, flagrantly behaved disrespectfully to the community, and have been tied to other illicit drugs. We know you are much smarter than that. The facts are, that you have a much greater chance of being shut down by the IRS for not paying your taxes or not having your tax paperwork filled out correctly. As with any business there is always small risk, and it is true that, federally, Marijuana is still illegal. However, knowing these facts can help you mitigate risk and make informed decisions to ensure your success.

The biggest challenge posed by the difference between state and federal laws comes from the banking industry. Banks refuse to provide services to dispensary owners because they claim that they are subject to scrutiny from the Fed. This has resulted in a very dangerous scenario in dispensaries, because they are forced to operate as “cash-only” and make manual deposits into the bank. This should not be seen as a deterrent however, and we will cover ways to mitigate this problem when we go over storefront operations until this ridiculous setback is resolved.

The overview on the difference between state and federal law is to all the more emphasize the importance of understanding local laws. So do yourself a favor and know the ins and outs of federal, state and local laws.

Your Card and Filing Paperwork

The first step toward opening a dispensary in almost all states is that the dispensary owner or collective director has attained status as patient or caregiver.

There are three initial steps to starting the process, and the first step is acquiring your card and filing paperwork. If you do not already live in a state where medical Marijuana is legal, you must either move there or begin to establish residency through acquiring a state driver’s license. Next you will need to get a physician to recommend medical Marijuana, and finally register as a medical Marijuana user in your selected state.

This requires meeting with a doctor to establish your need as a patient or contacting the department of health to understand the requirements for becoming a caregiver. It is common knowledge that for every 1,000 dispensary applications, only a few get filled out correctly. And that’s because they’ve either had assistance from a specialized lawyer or they know someone who is already doing it. This is why we provide the TWB Dispensary Guide because there is plenty of research to do beyond understanding the basics, and having your bases covered will drastically increase your chances of filing properly the first time. It will also drastically reduce your lawyer fees if all you have to hire them to do is review the documents you’ve prepared, as opposed to hire them to prepare documents for you.


Acting as a caregiver is the easiest way to begin your business, and also allows for the most options when conducting your business. For example, many states set the allowable number of plants per caregiver as a relative number based on how many patients are included in the caregiver’s network. Let’s use an example of states allowing 24 plants per patient: the caregiver with 20 patients in their collaborative/collective would be allowed 480 plants in the facility designed to produce the medicine for those people. However, caregivers are not authorized to consume the medicine. So if you have ailments that need attending to you can still be registered as the dispensary owner as a patient, just know that the regulations on how you can produce and acquire medicine are slightly different than if you are a dispensary owner licensed as a caregiver.

Establishing yourself as a caregiver is an avenue that involves a little more leg work in getting your business established, because you will need to know at least one patient (and sometimes more depending on your state) to get your caregiver card. The best way to start a collaborative/cooperative is to have a group of friends that are established as patients, and begin to grow your network organically. This is not a requirement however, and a good marketing platform can help you find a network of registered patients who would like to join your effort. The most important factor to growing a network of patients is to provide a quality product, and this can only be done through competent and caring caregivers who consider growing, curing and cultivating medicine to be an art. Your sole responsibility in any network is to run a professional business that provides a safe and fair environment for patients and caregivers.

There are caregivers that are looking to grow their network of patients to whom they provide medicine for, and there are many ways to begin seeking out these people. Quite often all it takes is getting in touch with a few people to start, and the rest will come from word of mouth. The most important thing when beginning to grow your network is to do your due diligence to assure you and your caregivers can produce quality products. Patients can only buy medicine from their designated caregivers, so, like all consumers, they are very selective about whom they choose to acquire products from. Ensuring you can provide them with the best products is the best and most essential first step in starting your business. If you do not have the skills to produce (grow and curate) the product yourself, then it is wise to align yourself with caregivers who can.

If you are going the caregiver route, the first step regarding paperwork is to register as a caregiver by submitting your paperwork alongside your primary patient’s paperwork. Because you will be expanding your relationship into a business, it is imperative that you have all of the paperwork properly submitted and duplicated for your records. Therefore you will need a copy of your patient’s registration application, doctor’s recommendation and any other documents evidencing your patient’s illness or debilitating condition. If you are applying for caregiver and patient status together, be sure to send all documentation via certified mail and retain proof of mailing with your records (that is, if your state allows applications to be sent via mail).

Patients and Physicians

If you prefer to become a patient as a method for registering yourself for business ownership, you will then rely on other caregivers to supply the medicine. The information below will help you to become properly certified and registered as a patient, and in the event you choose to go the caregiver route, the following information will still be useful for those who ask you for help in establishing themselves as patients, and ensuring your patients have all of their paperwork properly filed.

Technically, a doctor cannot generate a prescription for medicinal Marijuana, and instead will provide a recommendation. Your doctor recommendation will likely read similar to this except:

“The patient is likely to receive therapeutic or palliative benefit from the medical use of Marijuana to treat or alleviate the patient’s debilitating medical condition or symptoms associated with the debilitating medical condition. The patient’s respective ailments are listed below.”

In general, the more specific the doctor can be referencing “debilitating medical condition” and “symptoms associated with the debilitating medical condition” the better it will be for having all necessary paperwork in order. For some states and people it may be a challenge to find a doctor who is willing to write the recommendation, and doctors that are familiar with the process are likely to charge $200 for the visit and writing of the recommendation. Expect to include this as part of your initial start-up costs. In addition, it is in your best interest to have documentation of your illness and/or pain that result in your procurement of a medical Marijuana recommendation. The most common ailments are related to headaches or depression, and your doctor can give you documentation of your ailment if you request it. For some people, the workplace could provide a secondary source of documentation. One of my friends had migraines that were so severe she had to leave work early on several occasions. She had insurance cover pharmaceutical medications that did nothing more than make her drowsy and cloudy. She had paid out of pocket for acupuncturist visits and yoga classes designed for relieving tension in the spinal column, but still only found temporary relief for the few hours following treatment. Both of these efforts generated paperwork to help her doctor with the necessary documentation for writing her recommendation.

It is also helpful to let your doctor know that you have tried Marijuana illegally, and found the effects to be effective and desirable: reduction in occurrences of headaches without the extreme cloudiness found with pharmaceutical and opiate alternatives is the clear advantage of medical Marijuana. It is true that some strains of Marijuana can cause cloudiness, but there are a vast number that have been hybridized to reduce this effect. Also, many people find that after a few days of experiencing cloudiness, that this same feeling is replaced with an increase in creativity and thoughtfulness, whereas with opiates the cloudiness is only amplified with continual doses. Especially considering that the build up of tolerances to opiates is much more dramatic than the increased tolerance to Marijuana, so many patients that use opiates for pain relief will result in eventually dramatically increasing their dosage and frequency and ultimately run the risk of developing an unsafe dependance.

All patients have different needs based on different symptoms. It is important to run a dispensary that will provide a compassionate, non-judgmental and a detailed evaluation of each patient’s medical problem. A good dispensary formulates an individualized treatment plan, which incorporates the different strains of cannabis, guiding the patient through an otherwise confusing initial experience. The type of cannabis patients need in the morning may be completely different from what they need in the evening. For instance, patients suffering from morning nausea, midday stress, or evening relaxation require different delivery methods and strains of medicinal marijuana. Medical marijuana can be ingested, smoked, vaporized, drank, taken in a capsule, and applied topically as a salve or ointment. Patients suffering from localized pain may benefit more from applying cannabis salves and other topical treatments rather than ingesting or smoking cannabis. For asthma sufferers, smoking is out of the question, so they should try taking their medication in the form of a drink, tea, tincture, or other edible form. The specifics of patient symptoms in relation to the strains available are covered in greater detail in week seven.

State Registries

In most cases it may also be necessary to enroll in your state’s medical Marijuana program, beyond the basic acquisition of your patient or caregiver card. This too will likely cost around $200, and should be considered a necessary expense toward establishing your business as legitimate. It should be your goal to be open about your established rights to use and grow Marijuana as being in compliance with state laws. This includes paying taxes and promoting the positive aspects of your industry. The Medical Marijuana Program (MMP) was designed to provide patients with a voluntary medical Marijuana ID card along with a registry program for qualified patients and their caregivers. The web-based system even allows law enforcement and the public to verify the validity of a qualified patient or caregiver by running their card as authorization of possessing, growing, transporting and/or using Medical Marijuana. The database is available to simplify the verification of authorized cardholders. To many who have lived with the harshness of federal laws for decades, it is thought to be a risky maneuver to voluntarily place yourself on a list, however the list is designed to help you not persecute you. Functioning within the system is the best tactic for supporting and establishing the forward momentum of recreational and medical Marijuana in the United States.


Colorado and Washington – Adding Recreational Sales to your List of Services

Both states legalized the recreational use of Marijuana in 2013 as a result of the voice of the people via public ballot. Regardless of the user’s state of residence, all people can purchase Marijuana through these Recreational storefronts. Colorado residents can purchase up to one ounce in a transaction, and non-residents can purchase up to 1/4 ounce in a single transaction (this is an effort to reduce the movement of Marijuana outside of state borders). Most of these dispensaries already offered medicinal services, and just applied for the appropriate associated paperwork to expand their operations. Patients with medical cards ages 18 and over can purchase Marijuana from any facility per the above descriptions on medical facilities. Washington will also sell Recreational Marijuana to non-state residents using different specifications on quantities.


As of 2014, 160 Colorado Dispensaries were issued licences to sell Recreational Marijuana, and as they each move through the process of awaiting inspections, local zoning hearings and background checks the number of retail facilities that have opened their doors to the sale of Recreational Marijuana to all users over the age of 21 increases every week. As this transition is occurring “on the fly” many local zoning ordinances change regularly, often in regards to signage and other specifics, so the best thing to do is consult with your local laws to ensure you have all of your bases covered. Definitely the place to start is with your local Licensing Center, and a great resource for general information is the Denver Licensing Center. which higlights these 5 documents as being required for obtaining a retail license in Denver:

  • Copy of your business’ lease or deed
  • Zone Use Permit
  • Copy of City burglar alarm permit
  • Certificate of Good Standing from CO Secretary of State (entity name matching retail marijuana applicant name)
  • A floor plan, drawn to scale on 8-1/2 x 11″ paper, showing the layout of the establishment and the principal uses of the floor area, including a depiction of where any operations and services are proposed to occur on the licensed premises. Please include dimensions, security cameras, and separate pages for each floor level. The floor plan must be stamped by the Zoning Dept. during its zoning permit review.
  • A security plan indicating how the applicant intends to comply with the requirements related to monitoring and securing the licensed premises as required by law
  • Copy of City sales tax license
  • A description of products and services to be provided, including an indication of whether the establishment proposes to engage in the retail sale of edible marijuana products
  • A tax/surety bond in the amount of twenty thousand dollars ($20,000.00), in accordance with the requirements of the Denver Retail Marijuana CodeAn area map, drawn to scale on 8-1/2 x 11″ paper, indicating land uses of other properties within a 1,000-foot radius of the property upon which the applicant is seeking a license. The map must depict the proximity to the property to any school, child care facility, retail marijuana store, medical marijuana center, or alcohol or drug treatment facility.
  • Retail Marijuana License Bond (downloadable form)
  • Retail Marijuana Licensing Policies and Procedures – mostly pertaining to:
  • Public Hearing
  • Safety and operations inspection

Denver will license four categories of RMJ businesses:

  • Retail marijuana stores (RMJ Stores)
  • Retail marijuana cultivation facilities (RMJ Grows)
  • Retail marijuana products manufacturer (RMJ MIP’s)
  • Retail marijuana testing facility

During the two-year “Ramp-Up” period prior to January 1, 2016, only fully licensed Medical Marijuana (MMJ) businesses will be eligible to apply for (RMJ) licenses, and they must have been legally operating under Colorado law and applied for their Denver MMJ licenses prior to October 1, 2013. This restriction only applies to RMJ Stores, Grows and MIP’s, not to RMJ testing facilities. The Denver RMJ application processes will be for either “Conversion” or “Co-Location.” Conversion: The applicant surrenders its MMJ license when it receives its RMJ license. It is then an RMJ business only; the MMJ business no longer exists. Co-Location: The applicant keeps its MMJ license and adds an RMJ license, by either: (1) Split Co-Location: Having a physical separation between the MMJ side of a Store and the RMJ side, with separate entrances and Points-of-Sale. This process will simultaneously apply for the RMJ license for its portion of the premises and apply to modify the premises of the MMJ license to its smaller footprint. When fully licensed, customers 18 and older will be able to enter the MMJ center premises, but they must be 21 to enter the RMJ store side.
(2) Co-Terminus: Having no separation between the RMJ Store and the MMJ center, the licenses for each are for the same premises. No separate entrances are required. Only customers 21 and older may enter the combined MMJ / RMJ Store, regardless of whether they wish to purchase MMJ. It is presumed that following the “Ramp-Up” period, Denver and other locations will change the regulations on who can apply to own a retail location.


For the State of Washington, the Liquor Board stopped accepting applications for Recreational Facility licenses at the turn of the year (2013-2014), and they are in the process of solidifying terms and conditions for operations. They have set the state maximum number of facilities at 334, and applicants are subject to selection via lottery and a follow up interview process to gain their license. Once the initial round of facilities are opened, if there are any remaining licenses available, it is presumed they will re-open the application window. This is unlikely however, as the Board received a total of 2,206 applications for retail outlets, and they will initially limit the retail stores to 334. The state is creating three different types of license – producer, processor and retailer, and there were 2,821 applications for producer licenses, and 2,019 for processors. The licenses cost $250 and then $1,000 for renewal. There is no limit to the amount of producer/ processor licenses issued, but there are limits on which can be held simultaneously. Retail is separate from the producer and processor. A person or company can’t be both; they have to choose between being a retail outlet or the production.


FOR MORE INFO read the TWB Dispensary GUIDE to find out – Best Ways to Meetup With Vendors and Patients ; Patient Documentation ; The Patient Caregiver Agreement

Following this introduction and your research, hopefully you feel confident on the initial steps of becoming registered with your state as a caregiver or patient, know the law, and are ready to move on to the next step.


Learn the difference between a collective and a collaborative, and begin to familiarize yourself with the basics of owning a non-profit or limited liability corporation. Your goal with this research is to begin to prepare for writing your business plan, so if you are uncertain about what a business plan is then you should begin to research that as well. For a huge jumpstart on this information read the TWB Guide and save time getting your bearings so you can focus your independent research on what you need to find out about your specific area.


We are here to help and want to see you succeed! If you have questions you can email The Weed Business directly at info@theweedbusiness.com.

Happy Trails!

The Green Ninja, DANKO and the Weed Business Team

The Green Ninja has business experience from owning two companies, has operated The Weed Business since 2009, and follows news providers to stay as current on issues and business laws of Medicinal and Recreational Marijuana use in the United States. DANKO is from a Medical Marijuana and has many card carrying friends providing first hand insights from patients and caregivers, in addition to researching and writing in-depth articles about the most current issues of the industry. Combined, we have spent hundreds of hours looking into different states’ medical Marijuana laws and the industry to make sure the information included is the most cutting-edge and up to date information there is. The Weed Business has a number of other contributors and a large support network, so if you have a question we can’t answer there’s a good chance we know someone who can.

Move On to WEEK TWO