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socrateaser, Attorney
Category: Business Law
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Experience:  Retired (mostly)
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I want to set up a non-profit collective/corporation (in California)

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I want to set up a non-profit collective/corporation (in California) for growing medical cannabis. Can I do this as a 501 (c) 3? I have read that 501c3 are for publically beneficial entities, not for mutually beneficial ones. I view a MM collective as being for mutual benefit of the collective's memebers, rather than the public in general. Am I correct in my interpretation? If so, under what 501c can my collective be incorporated?
warmest regards & many thanks.
Submitted: 7 years ago.
Category: Business Law
Expert:  socrateaser replied 7 years ago.

Marajuna is an illegal substance under federal law, and its culitivation is prohibited.


Federal tax law cannot be used to advance an act criminalized by federal law. You can set up your corporation under California state law in whatever manner you wish, but you will never get a nonprofit approval from the IRS to cultivate marajuana.


Hope this helps.


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Customer: replied 7 years ago.

I know that federally marijuana is illegal. However, under CA prop 215 & SB420, CA residents with a Dr's recommendation can cultivate and use medical cannabis. SB420 recommends that patients establish collectives and become non-profit entities. that's what I'm trying to do.


Are you saying that I can establish as a non-profit entity (corporation) in CA, but NOT file for non-profit status with the IRS?

Expert:  socrateaser replied 7 years ago.

Are you saying that I can establish as a non-profit entity (corporation) in CA, but NOT file for non-profit status with the IRS?


A: Yes, that is exactly what I'm saying.

socrateaser and other Business Law Specialists are ready to help you
Customer: replied 7 years ago.
thanks very much! & warmest regards. I accept your answer.
Expert:  socrateaser replied 7 years ago.
You're welcome and good luck.

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