If you’re a cannabis enthusiast in California, you may have thought about riding the green rush wave but didn’t know where to begin. Obtaining a license to set up your business can be complicated and expensive, but don’t be disheartened. With access to insider tips, gaining your marijuana business license in California doesn’t have to be a major challenge. In this article, you’ll learn everything you need to know before applying for a California marijuana business license.
The rules for cannabis business licenses are dynamic and continuously changing, much like marijuana laws! If you’re serious about getting yours, there is one source of information worth bookmarking. This is the Cannabis Licensing California portal. Here, you can find regular info and updates regarding any changes to the regulations.
You should also consult the legislation in your local jurisdiction. If you plan to start any commercial activity that includes cannabis, having a state license is mandatory under California marijuana laws. To set up your business legally, you’ll need to have the proper documentation.
Before Applying for a Marijuana Business License in California
Before applying for your cannabis business license, it’s essential to have a clear idea of the type of business you’re hoping to open. The license type you need will vary depending on the kind of company you’ll be running. You should also be prepared for operating costs and licensing fees. Some regulatory agencies will require you to show proof that you have available capital.
There are five main categories for cannabis licenses: cultivation, manufacturing, distribution, testing, and dispensaries. Of course, the rules, regulations, and requirements are different for each of these business types. The regulatory agencies for each kind of business may also differ.
Cannabis Cultivation License
If your goal is to have a commercial cannabis cultivation license in California, the regulatory agency you should look for is CalCannabis, part of the Department of Food and Agriculture. The requirements for your application include:
Government-issued identification (copies),
Business owner information,
Property and facility information,
You will also need to get the green light from the Department of Fish and Wildfire to ensure your cultivation will not harm the environment. Depending on the size of your cultivation site, you may need an environmental assessment for your project. The requirements for this department include:
Lake and Streambed Alteration Agreements (or you can submit a written document to exempt from this),
California Environmental Quality Act Compliance,
California Endangered Species Report.
Another agency that will need to approve your cultivation site is the State Water Resources Control Board. This board will assess your water sources and also ensure that your farm discharges water safely. Here are the required documents:
Water quality protection enrollment
Small use irrigation registration documentation
Conditional waiver of water discharge requirements (or you can also present a notice of applicability).
To apply for an annual state license, you will need to have local authorization or a permit issued by the county or municipality of your farm or facility. Other requirements include having a seller’s permit issued by the California Department of Tax and Fee Administration, a surety bond of $5,000, a background check, and if you have 20+ employees, a Labor Peace Agreement. The state requires you to present pest and waste management plans and a detailed cultivation plan for growing cannabis.
CalCannabis has an online portal where you can submit your application, and they have a lot of supporting materials. Yes, the amount of documentation and regulation can seem overwhelming. However, the regulatory agencies are not focused on stopping you from becoming a licensed farmer; they just want to ensure everything is in place with your business, and the environment is safe. Take your time, analyze the documentation required carefully, or hire an expert to help you apply.
Cannabis Manufacturing License
Cannabis entrepreneurs interested in gaining a license to manufacture cannabis products such as edibles for medical and recreational use should follow a different path. You should go to the Manufactured Cannabis Safety Branch to get your license. However, you don’t need to go in person because this division of the California Department of Public Health also has an online licensing system.
Before applying for a license, it’s mandatory to have local authorization with your city or county. All business owners must provide necessary information such as name, SSN or ITIN, mailing and email address, and phone number. You must also provide disclosure of criminal convictions or evidence of rehabilitation, as well as a full Live Scan and a disclosure if you own or hold a financial interest in any other cannabis business in California.
Here is the mandatory business information that you must provide:
Legal business name, trade name, and DBA if there is one,
If you are a sole proprietor, your SSN or the Federal EIN,
Information about your business structure: sole proprietor, LLC, corporation, etc.,
Your business mailing address,
Your business primary contact information,
Your business seller’s permit number.
And here is the required information that you need to provide regarding your business premises:
The physical address of your premises,
Number of employees at this location,
If your business is currently operational, please provide the date your operations began,
Phone number, email address, and an on-site contact person,
Information about your operational services:
What types of activities you’re conducting (infusion, extraction, packaging or labeling),
Types of solvents that you will be using,
Types of products,
The estimated gross annual revenue that you expect to generate from the products manufactured.
Aside from sharing all the information stated above, you will also need to provide other documents such as business formation documents, proof of a $5,000 surety bond, and a written statement of the property owner allowing the manufacturing of marijuana products on the property. A diagram of the premises with proper identification according to the CDPH regulations and standard operating procedures is also required.
If you’re planning to make extractions with CO2, chlorofluorocarbon, a volatile solvent, hydrocarbon, or other fluorinated gas, there’s still more to consider. In this case, you must provide approval from the local fire official and gain closed-loop system certification. If you’re using ethanol for extraction, you must provide evidence that the local fire code official approves your facility. You should also comply with the California Environmental Quality Act and provide evidence.
Make sure you check the updated laws and regulations on the California Department of Public Health portal.
Cannabis Commercial License (Dispensaries, Test Labs)
If your marijuana business is a retailer, testing lab, distributor, microbusiness, or you plan to host a temporary cannabis event, then your regulatory agency is the Bureau of Cannabis Control. This agency also has an online licensing system and a comprehensive e-learning portal.
The Bureau of Cannabis Control has different forms and documents required for each type of business: Retailer, Distributor, Microbusiness, Testing Laboratory, and Cannabis Event Organizer.
For retailers, when filing your application, you must declare if your business is for adult of medicinal use and if you have storefront sales or only work in delivery. You must also provide business contact information with your full business name, physical address, website address, email, and phone number. The SSN, ITIN, or FEIN are required, along with details about your business’s organizational structure.
A the time that the license is issued, your premises cannot be located within a 600-foot radius of the following:
Schools with kindergarten or any grade from 1 to 12,
Other declarations required include a limited waiver of sovereign immunity (if applicable), compliance with the California Environmental Quality Act, seller’s permit, SEIN, and labor peace agreement (if 20 or more employees). Information about the owners, surety bond, premises diagrams, and operating procedures is also required, similar to what the other agencies request. You can find more information in the retailer instructions from BCC.
Wrapping Up: Entrepreneurship Requires Studying – A Lot!
Obtaining a marijuana business license in California is a highly complex and nuanced subject. Anyone who’s planning on opening a cannabis business must invest some time studying regulations and laws. And as a smart marijuana entrepreneur, you should learn about the niche before pumping big money into your business. Make sure you comply and operate legally to avoid coming face to face with the law.
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