No matter what state you are in, if you want to know how to open a collective, you first need to know that dispensaries are formed as either collectives or cooperatives and that there are major differences between them and your choice of formation affects how you operate your dispensary and the legality of it.

By far, collectives are the most widely used choice. The idea behind a collective is that you as the Dispensary Owner (You also must be a qualified, legal medical patient yourself) are teaming up with other patients to collectively form an establishment that cooperates to exchange and donate marijuana amongst each other.

Members of the collective may be reasonably compensated monetarily for their time and efforts in producing and transporting the marijuana. Within a collective, the production is done by the able members of the collective and distribution is back to them. Nothing is "bought from anyone" it all belongs to the members.

If you want to know how to open a collective or cooperative, know this also - It's been said that Collectives don't have the tight definitions that Cooperatives have around them.

For instance Collectives are not privately owned, they are owned and worked by members of the group (collective) and no single member 'owns' the production there of. The old communistic axiom of "Each as they can; each by their needs," would be a good line to follow to see if an entity is a collective.

Cooperatives (on the other hand) are groups of people who all own their own land, (production sites) and sell their production to a central market or hub.

A Cooperative is an entity that buys medical cannabis from members (at given prices: 1,800-6,000 a pound) then resells it tacking on their Cost Of Operations (COO) also looking at current street prices to dissuade resell on the black market.

A Collective is an entity that produces its own cannabis then provides it to its membership for Cost of Production (COP) and Cost of Operations (COO) (staffing et al). Prices are totally reflective of the actual COP & COO vs. any outside modifiers. Membership and distribution is in a closed circuit and monitored in a collective model.

Applying this definition, a collective should be an organization that merely facilitates the collaborative efforts of patient and caregiver members - including the allocation of costs and revenues. As such, a collective is not a statutory entity, but as a practical matter it might have to organize as some form of business to carry out its activities.

The collective should not purchase marijuana from, or sell to, non-members; instead, it should only provide a means for facilitating or coordinating transactions between members.

Collectives and cooperatives should be organized with sufficient structure to ensure security, non-diversion of marijuana to illicit markets, and compliance with all state and local laws.

Regardless of the organizational structure, a medical cannabis collective should operate in a "not-for-profit" manner.

Not-for-profit operation describes the behavior of a business or association that is not operated for a commercial purpose, or to generate profits for its owners.

Any business, regardless of its formal structure, can operate in a not-for-profit fashion by reinvesting excess revenue (after salaries and other overhead) in services for members, advocacy for patients' rights, or other noncommercial activity.

Remember when you know how to open a collective properly- you can be salaried and if you are providing the marijuana, you can also still be reasonably compensated for your time and efforts.