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Iconic Record Store to Open a Pot Dispensary in Jazz Section

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By George Khoury, Esq. on October 04, 2016 6:57 AM

The most iconic record store in Berkeley, California, Amoeba Records, is in the process of renovating their store to provide an independent medical marijuana dispensary with a storefront shop in what used to be their jazz section. Citing the decline in record sales over the past decade, the store's owners hope that the pot dispensary will provide the necessary capital needed to keep the record store's doors open.

Having just celebrated their 25th anniversary, Amoeba Records has been approved by the City of Berkeley's City Council to be one of the city's half-dozen medical marijuana dispensaries. The San Francisco Amoeba Records store has had a medical marijuana evaluations clinic operating independently in a separate space located within the store since 2014.

Can a Record Store Really Sell Marijuana?

While it may sound like the record store itself will be selling the marijuana through the dispensary, that is actually not the case. The store will be providing space for the dispensary, to be known as Berkeley Compassionate Care Collective, to operate. Additionally, while both the record store and the collective may share an owner, the property itself is owned by Amoeba Records, and, likely, the only income the music store will receive is from rent.

In California, medical marijuana dispensaries are allowed to operate as not-for-profit collectives. What this means is that the owners of any given collective, while they can collect a salary, technically, should not be profiting on the sales of the medical marijuana. While a dispensary, or other non-profit, may generate high revenues, unlike a traditional retail store, profits are generally not supposed to go to the owners.

Is It Legal for Your Non-Profit to Rent From Your For-Profit Business?

While this relationship between Amoeba Records and the Berkeley Compassionate Care Collective may seem a bit sketchy, apart from the social implications, it is, for the most part, legal. Presidential candidate Donald Trump has in fact taken advantage of a similar loophole and, according to Politico, has used $1.3 million of his campaign's money to pay for renting offices he already owns. Unlike the political candidate though, Amoeba Records is touted as a Berkeley institution, and the added rental revenue will likely allow the iconic record shop to stay just where it is for years and generations to come.

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