Marijuana Law, Policy & Reform

Editor: Douglas A. Berman
Moritz College of Law

Thursday, May 4, 2017

Highlighting possible hiccups when a marijuana business wants to give away profits to charity

This new local article out of Colorado, headlined "Why Colorado nonprofits are taking a risk accepting donations from pot businesses," highlights yet another was that federal marijuana probation makes it a bit more difficult from a marijuana company to try to do good while doing well.  Here are excerpts:

When is a donation not necessarily something you want to take straight to the bank? Kaya Cannabis, in Denver, is donating a portion to medical marijuana sales to three nonprofit organizations.  "Nothing is simple in cannabis, I've learned," said Amanda Gonzalez, CEO of Kaya Cannabis.  "Many non-profits are part of national organizations or their of board of directors is just a little bit more conservative and nervous about what's still a relatively new industry."

Kaya medical marijuana customers are given a copy of their receipt to put in a basket in front of one of three charities [including] Rocky Mountain MS Center...  "The MS Charity that we are giving to, it was a yearlong process with their board of directors to make sure that they were able to accept these kinds of donations," said Gonzalez....

In Colorado, marijuana is legal.  In the eyes of the federal government, it's still illegal, essentially making donations from a pot shop, drug money.  "Some nonprofits want the waters tested a little bit more," said Gonzalez.

"There is still some legal risk that a nonprofit would need to evaluate, but from the experts we've talked to, it seems small at this point," said Renny Fagan, CEO of Colorado Nonprofit Association.

The Colorado Nonprofit Association sent out an annual survey last year that asked about marijuana industry donations.  One in 10 nonprofits had actively sought out contributions, but two-thirds would consider accepting a donation if offered.

"If the nonprofit receives federal funds through a contract or grant, that contract or grant will probably prohibit a violation of federal law as a condition of receiving those funds, so for those nonprofits, they should not accept donations from a marijuana retailer," said Fagan.  "Most nonprofits do not directly receive federal funds, and so for them, the issue of whether to accept sponsorship or donations from the marijuana industry, really comes down to, how does that fit with their donor base overall and is it consistent with their mission."

http://lawprofessors.typepad.com/marijuana_law/2017/05/highlighting-possible-hiccups-when-a-marijuana-business-wants-to-give-away-profits-to-charity.html

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