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Weednomics: Salaries for Marijuana Executives

Posted by Joseph Tully | Mar 17, 2015

Complex organizations require talented executive leadership. This is true in the corporate world, as well as in non-profits. In California, medical cannabis patients can form non-profit collectives to cooperatively produce their medicine. It is a legal way to obtain medicine not personally grown. Any group of two or more people who are both qualified patients can exchange medicine and money. This is generically described by the law as a “collective.” However, when a “collective” chooses to file as a non-profit with the state, it is known as a “cooperative.”

Starting and running a medical cannabis cooperative is no small undertaking. This is not the community vegetable patch. Running an MMJ cooperative is as complex as managing a medium-sized corporation, or a community clinic with thousands of members. Leadership, finance, patient care, compliance, logistics, security, management, customer service and taxes are just a few of the skills required from a co-op director.

This is not to mention the risks involved. Co-ops can be targeted by bad guys to steal money or medicine. Also, they can and are targeted by Law Enforcement. Remember, marijuana is still illegal at the Federal level and local law enforcement gets federal grants to attack legit MMJ collectives and cooperatives. Cooperatives are an easy target because they are in public as storefronts.

The MMJ laws in California are interpreted to restrict cooperatives to be non-profit entities. But non-profit medical marijuana executives are not paid in smiles and sunshine – they have rent, mortgages, families, holiday and birthday gifts, vehicles, and need to eat just like everyone else. By comparing salaries at other non-profit organizations in California, we will see that “non-profit” doesn't mean that those who dedicate their lives to supply medicine to sick patients while providing a safe environment shouldn't have to work for free or be homeless!

What are appropriate salaries to pay executives of a medical cannabis collective?

In 2014, Charity Navigator published its latest non-profit CEO compensation survey. In the Pacific West, the median compensation for non-profit execs was $125,000. The size and complexity of the non-profit increased the median executive pay. According to the survey, small size organizations had a median executive pay of $97,158. Large non-profit institutions with tens of millions of dollars of expenses had median CEO salaries of over $240,000.

There are extreme examples of non-profit executive pay here in Northern California. The director of K-Love Christian Radio made $535,950. The director at the California Travel and Tourism Commission earned $445,590. Both according to a January 2015 Sacramento Bee article.

A large medical cannabis cooperative can easily have over 25,000 patients, and expenses in excess of ten million dollars. Managing an organization of that size requires a skilled executive and high salaries are required to attract such talent. MMJ collectives should reward their directors with compensation in line with other non-profits. A small cooperative might pay $60,000 a year, and a large one will pay up to $325,000.

MMJ Discrimination by Law Enforcement

A tactic by prosecutors targeting medical cannabis professionals is to focus on salaries. DA's claim that collectives are not non-profits if they are paying the directors. Law enforcement persecutes MMJ non-profits for taking a salary.

However, what did non-profits operated by and for Law Enforcement pay their executives? (based on 2013 filings)

  • $105,000 – COO, of California State Sheriff Association
  • $889,118 – Annual Management Fees, CA Law Enforcement Assn.
  • $113,924 – Exec Director, California Police Chiefs Assn. (Only 1,500 members)
  • $118,727 – Exec Director, California Peace Officers Assn.
  • $199,750 – Director and Exec Director, California Narcotic Officers Assn. (7,000 members)

And the fattest non-profit of them all is the California District Attorneys Association. They pay total executive compensation of over $770,000 a year! Including $148,000 for their CEO, and another $130,000 for their Assistant CEO. PLUS, over $2.6 Million more in additional salaries. This non-profit has fewer than 3,000 members!

Note that many of the non-profit organizations above are supported by tax-free donations, government grants, and dues paid by government employees, who are in turn paid by our taxes. These groups spend millions every year on lobbying and entertainment to gain yet more favor with Sacramento. It is hypocritical of Law Enforcement to wield non-profits as weapons, in addition to their executive and judicial weapons, against the legal medical marijuana establishment in California, voted in by voters in 1996.

We don't need mobs with pitchforks to protest what other executives get paid. If non-profit collective members are pleased with their directors, that is their business. Medical cannabis is legal in California. Law Enforcement shouldn't attack non-profit salaries without looking at the big picture, including their own Law Enforcement non-profits!

About the Author

Joseph Tully

Founding Partner, Criminal Law Specialist Our founding attorney, Joseph Tully, is sought out for his expert legal advice throughout California. With over 20 years of experience as a criminal lawyer, in 1000+ felony and other cases, Tully served as felony trial counsel as a public defender before...