Creating A Small Business DBA for your Marijuana Collective

First you will probably want to look at the local laws in your county.  If you have several friends in mind that are medical marijuana patients, but live in other counties and would be able to grow consider the laws in all your counties.  Knowing how law enforcement handles marijuana cases in each of your counties will allow you to choose the best spot for your grow and for your collective. 

Some counties have restrictions on the amount of patients that can be involved, and some have size restrictions on how large a space the grow can take up, or if outdoor growing is allowed or not.

Check here for updates on local county guidelines:

 

http://www.safeaccessnow.net/countyguidelines.htm

OR

http://www.canorml.org/prop/local215policies.html

Keep in mind that although as of now there are no legal limits that can be placed on patients as long as you can prove that the amount you are growing is reasonable for the amount all the patients in your collective require for medicinal purposes.  In general all counties should respect the old laws of 6 immature plants, OR 12 immature plants per patient (remember it’s OR, not and, so you can only have one or the other per patient).  Some counties have less restrictive laws as well and may allow more plants per patient and/or possession of more dried bud per patient.

Now onto starting your collective

The easiest way to start anything is to ask someone who has already done it and do what he/she did.  So, that’s what we did.  We asked a friend of ours that runs a collective how he did it, and here are the steps he told us to take.  They may not apply to everyone, but they should apply to your average person looking to start a collective.

The first step is to file for a DBA (Doing Business As) with your local county.  This is your first step towards legally forming a marijuana collective and protecting yourself and your crop from the law. 

As stated earlier you DON’T NEED:

A grower’s certificate

Medical Marijuana Card, State ID Card, Cannabis Card, etc

Naming Your Business

First you need to name your business, the easiest thing to do to make sure that your business name is not taken or liable for trademark infringemnt, etc is to simply use your last name, such as “Chris Hernandez’s retail distribution” or “Jessica Parker Company.”  Keep in mind at this time (due to mmjs controversial status) that it is probably best not to mention collective, dispensary, or marijuana anywhere in your application or business name.  You will want to make a name specific as possible in order to make sure it is not taken (which is reason to get your s-corp application rejected) but also to keep it vague and open-ended so as not to limit the type of business you can do, it also really doesn’t matter for this type of collective as the only ones who may ever see the name of your business are going to be the patients in your collective and usually not the general public.  Your corporation can also do business under several DBAs (“Doing Business As” described later), you just have to file for each of them.  Doing business under another name allows you to keep your corporate name more secretive and also to do business under a more marketable name, that may otherwise be taken.  You can do checks at your local county office for free before you hand in your dba form to make sure that the name you chose is not taken.  You also may not use, inc, corp, company, etc in your name if you are doing a dba.  For an s-corp you may do a free name search by mail go to: http://www.sos.ca.gov/business/be/mail-processing-times.htm and get the form for your name search, you may then pay a $10 fee to reserve the name of your corporation.

Forming a DBA (Doing Business As)

For filing the dba it is recommended that you go into your local county office so that you can ask questions about local requirements and any other business related questions you may have about filing your paperwork.

The fee for filing a DBA depends on your county (in Oakland it is currently $29).  Before starting your business in your local county you are usually required to publish your new business in a local paper once a week for 4 consecutive weeks.  They can usually recommend a paper that will do this if you go into your county clerk’s office to file your DBA.  In Oakland there is a local newspaper on the same block as the county office that will publish your DBA for $40.  The paper will send the county office all the necessary paperwork and your proof of publication by mail to the address you listed on your application. 

Once you’ve paid the filing fee for your DBA, handed in the forms (which is done at the same time) and then gotten your DBA published in a local publication you can move onto the next step – Getting your seller’s permit.

Remember you can also always ask the person at the front desk, whom you are submitting your forms to, any questions additional questions you may have.  Try not to mention medical marijuana, instead tell them you are running a business from your home as a hobby and in a not-for-profit manner and will be doing retail sales.  Base your questions off of that description and ask away.  I’ve found most people in the offices to be very helpful when trying to figure out how to fill out the paperwork.

Tomorrow's post will show the next step of obtaining your seller's permit.  This will allow you to show that you are legally allowed to be making transactions and collecting taxes.  Remember to keep track of sales in order to prove you are paying taxes, as this is often the area where most collective owners get in trouble with the law, even though it is such an easy step.  In a later post I will show you how to easily keep track of your records.