California - How do medical marijuana dispensaries survive being closed down by the feds?

Interested in getting involved with the legal cannabis "green rush"?

Yet maybe you've heard that the federal government has been cracking down on medical marijuana dispensaries, and many dispensaries and collectives have recently been closed.

But were those dispensaries operating legally under California medical marijuana law?

Recently, the Obama administration announced it would not challenge the decision by Colorado and Washington voters to fully legalize marijuana. The feds have also stated that they will no longer be specifically targeting medical marijuana businesses, as long as these business are legal under state law.

The federal government has stated they will continue to go after dispensaries that are not in accordance with State law. But what does that mean?

From what I've seen in California, the types of dispensaries that don't close down are the ones that fulfill not just the letter of the law, but also the spirit of only providing medical marijuana to a limited amount of patients.

The more a dispensary advertises and expands quickly (seems to be operating as a business for profit, instead of as a non-profit for sick patients), the more likely it is to get shut down.

In my city, nearly all the dispensaries have been closed down except for the ones that...

• Cater to very sick people and offer high-CBD strains, extracts and oils
• Keep only a small number of patients (instead of expanding to everyone who will buy)
• Check documentation thoroughly and stay organized enough to never sell to a patient who's recommendation has expired
• Don't advertise publicly
• Present themselves publicly as a medical office with a generic name; no cannabis leaves or anything showing from the outside of the office that immediately proclaims themselves as a dispensary. They're not notable from the street and most people don't realize there's a dispensary there.
• Sell only top quality medical cannabis, for higher prices. Instead of offering lower quality meds at lower prices, they provide discounts for people who are sick and qualify for help. The idea seems to be to weed out casual buyers who are trying to find the cheapest deal or buy a gram at a time - this strategy greatly reduces the amount of foot traffic (which tends to attract unwanted attention)

The other group of medical marijuana providers in my city who seem to have survived all the shut-downs are the delivery services. The same sorts of rules seem to apply to these services, and they tend to be more likely to go "under the radar" when they don't have a store front and don't advertise publicly in local publications (everyone seems to use Weedmaps though).

Most delivery services with reasonable prices and high quality meds have waiting lists and applications for new patients, again to limit the total number of patients and reduce the number of people who just buy once or twice. The delivery services that are more open to the public tend to have much higher prices and will only sell 1/8 or more at a time. The services that open up with low prices, low minimums, and take lots of new patients tend to get closed down in a heartbeat.

The delivery service workers dress in clothes that make them look like an electrician or handyman, something that people would expect to see in a neighborhood. They don't do any chit chat, and all transactions take place inside the house with doors closed.

For right now, with the feds coming and shutting down people who sell cannabis left and right, I believe the businesses who survive are the ones who stay small and grow smart instead of big.

Because of all the uncertainty (and prison penalties) associated with selling cannabis in the US, I know I personally wouldn't get involved in a business that actually sells cannabis. At least not until the federal laws change.

So far I've noticed 3 major ways of getting involved with the industry that have emerged, and I'm sure there's lots more ways coming soon as this industry continues to grow:

• Getting involved with selling cannabis directly (very high risk, high uncertainty since business could get closed down at any time, likely to get prison time if company gets shut down, biggest immediate rewards, with the potential for huge amounts of money to be made as you take on higher amounts of risk)
• Catering to growers with information or equipment, for example hydroponics stores (much lower risk, lower immediate profits, though the risk and amount of money made goes up the closer you get to catering directly to bigger growers in person)
• Catering to patients with information and equipment, such as selling vaporizers or water pipes (similar risk to above; the closer you get to catering directly to medical marijuana users in person, the more risk you're undertaking, though there is opportunity for major growth here for businesses that are willing to innovate and grow the traditional way, just look at the incredible growth of the Magic Flight Launch Box)

Those were just some thoughts that come to mind from the experience I've had in California with medical marijuana, and what I've seen online. I know the climate is very different in other states. I hope someone finds the above information helpful and I'd be happy to answer questions.