The Ins and Outs of Medical Marijuana Delivery Services
Recently, and yet again, law enforcement arrested several (14) people connected to what they allege were medical marijuana delivery businesses engaged in the unlawful sale of medical marijuana. In my experience, the delivery people who get busted most often are those who choose to advertise on Weedmaps or Leafly, etc. When questioned, cardholders typically justify their actions by characterizing the transaction(s) in question as being a patient-to-patient (“p2p”) transfer. Is that legal? In short, p2p transfers are lawful under the AMMA (ARS 36-2811(B)(3), but only if the patient transferring the MMJ is not compensated in any way.
Despite me and other attorneys fighting for years in favor of the legality of p2p sales, in a 2015 decision called Matlock v. Fields the Court of Appeals held that such transfers are only lawful if there is nothing of value given in return for the MMJ (e.g., money). Basically, the Court reasoned that licensed dispensaries were the only entities that can accept money in exchange for marijuana. Importantly, however, the Court left room for a way to operate a delivery business lawfully, but first: how to do it the wrong way.
Although Matlock was decided way back in 2015, there remains a good deal of confusion and misunderstanding surrounding the legalities of p2p transfers. In brief, Matlock held that a p2p transfer is illegal if the patient transferring the MMJ receives anything of value in return. That includes “donations” and any form or amount of reimbursement. It also includes services (e.g., accepting an oil change in exchange for MMJ). Anything of value related to the transfer of MMJ makes the transfer illegal.
In most delivery cases, the delivery person either claims that (1) she thought that she was legally allowed to receive some form of reimbursement or (2) she knows that she is not allowed to receive any form of compensation and that is why the marijuana she delivered was for free. In the first scenario, sometimes the delivery person is confused about the law that allows “designated caregivers” to receive reimbursement from their patients for actual out of pocket costs. What they do not realize is that a caregiver must be approved in advance by the ADHS and that only the (maximum of 5) patients to whom a caregivers are designated may pay them such reimbursement.
In the latter scenario, the delivery person will typically say that they were only charging money for an unrelated non-cannabis product or service, not for the cannabis itself. For example, a delivery person might say that he was simply charging a delivery fee or was charging for a “consultation”. In most every case, however, this kind of characterization is untenable. For example, if the patient recipient had to spend money on the non-cannabis product or service as a precondition of receiving the MMJ, then it wasn’t really for free, right? Or, if the recipient receives more MMJ for spending more money on the non-cannabis product, then that’s also a problem. After all, if it is for free then why would you get more of it for spending more money on the other product? Or, if the amount of money paid is more consistent with the market value of the marijuana than the market value of the non-cannabis product, then the argument begins to fall apart.
Despite the above problems, there is a way to operate a delivery business legally. If done right, a delivery business can be both legal and profitable. In short, this involves working in cooperation with a licensed dispensary, as a registered agent of that dispensary. So, don’t get busted, get legal. Meet with an experienced cannabis attorney ahead of time and do it the right way.
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