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Corp. Code secs. 5110-6910. (West 1990).3 Its articles of
incorporation stated that it “is organized and operated
exclusively for charitable, educational and scientific purposes”
and “The property of this corporation is irrevocably dedicated to
charitable purposes”. Petitioner did not have Federal tax-exempt
status, and it operated as an approximately break-even (i.e., the
amount of its income approximated the amount of its expenses)
community center for members with debilitating diseases.
Approximately 47 percent of petitioner’s members suffered from
Acquired Immune Deficiency Syndrome (AIDS); the remainder
suffered from cancer, multiple sclerosis, and other serious
illnesses. Before joining petitioner, petitioner’s executive
director had 13 years of experience in health services as a
coordinator of a statewide program that trained outreach workers
in AIDS prevention work.
Petitioner operated with a dual purpose. Its primary
purpose was to provide caregiving services to its members. Its
secondary purpose was to provide its members with medical
marijuana pursuant to the California Compassionate Use Act of
1996 and to instruct those individuals on how to use medical
marijuana to benefit their health. Petitioner required that each
3 Under California law, public benefit corporations are
organized for a public or charitable purpose; they are not
operated for the mutual benefit of their members but for a
broader good. See Knapp v. Palisades Charter High School,
53 Cal. Rptr. 3d 182, 186 n.5 (Ct. App. 2007).
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Last modified: November 10, 2007