Your Pathway to a California Cannabis License

Since cannabis became a thing in the US, thanks to its medicinal benefits, California legalized it on two fronts. All of which is evident considering, it became legal for its therapeutic uses in 1996 and recreational in 2016, making California the first state in the US to legalize medical cannabis under the auspices of the Compassionate Use Act of 1996 (Proposition 215).

The Breakthrough of Cannabis in California

November 2016 signaled a step in the right direction, as Californian voters made their voices heard through their votes. Because of that, the Adult Use of Marijuana Act (Proposition 64) became law, and the recreational use of cannabis was born. Engineered by the recreational legalization of cannabis following the local governments (city and county), adults can freely grow, consume, or transport marijuana for personal use.

Unlike those seeking the plant for consumption, persons willing to sell, grow, distribute, or manufacture cannabis commercially must get their businesses registered, comply with regulations, as well as apply for permits.

California Cannabis Market

Three years today (2017) signaled a step in the right direction for cannabis use in the state of Califonia. California’s regulatory regime declared that all purchases of cannabis in the state must be conducted with a cannabis card (for medicinal users). Although this law has since been applicable, it hasn’t affected the sales of cannabis for recreational uses, making the demand for cannabis continually hitting record heights.

Cannabis Licensing in California

January 1st, 2018, signaled a step in the right direction for Cannapreneurs. The Cannabis licenses initiative finally saw the light of day and are available to those involved in trading cannabis commercially. Like the cannabis licenses, this same year (2018) saw the inception of two new cannabis tax laws. They include the cultivation tax on all harvested cannabis, making an entry into the market, and a 15% excise tax levied on the purchase of cannabis and cannabis products.

With that said, it should be worthy to note that the state’s three licensing authorities have issued over 10,000 commercial cannabis licenses this year (2020) alone. Notably to cannabis businesses throughout the state of California.

Getting a Cannabis License in California

Are you seeking to get a retail Cannabis License in California? Enclosed below is a guide to help ease your way around the whole process.

1.    Get a Work Plan

The first step to acquiring a cannabis retail license in California is all about putting together a master plan for the entire project. Luckily, most Cannapreneurs or prospective cannabis retailers have all the factors of production, so they should be good to go. However, those starting up with little or nothing but for an idea, there is hope as well.

2.    Create a Site And Facilities Plan

Setting up a facility plan is the core of your project. Cannabis stores reside in designated zones since the local government controls the number of retailers for each zone. With that in mind, you must consider the potential for future growth before purchasing land. Remember, you may begin the business as a retailer with plans of expanding in manufacturing or distribution in the future.

3.    Design a Business Plan

In getting a dispensary license in California, creating a detailed and winning business plan is critical. Remember, regulators will hardly approve of a business plan that will not succeed. So prepare for yourself a list representing your business and how you intern on taking the company to the next level. 

4.    Get Approval From Supporting State Agency(s)

Before getting approval from the local and state governments, get some from both the DTFA, which stands for the Department of Tax and Fee Administration, in collaboration with the SOS (Secretary of State). Based on the nature of land development involved, you will likely need approval from CalFire, the State Water Resources Control Board (SWRCB), or better still, the Department of Fish and Wildlife (CDFW). However, before getting any of the approvals mentioned above, you’d need to form a legal entity through the California Secretary of State. What this means is you need to identify which business entity you would like to venture into

  • Limited Liability Corporation (LLC)

  • For-Profit Corporation (S-Corp, C-Corp)

  • Mutual Benefit Nonprofit Corporation (MBNPC)

5.    Get Local Approvals

Considering 58 counties sandwiched with 482 incorporated cities and 540 different local governments to match, all come with various hurdles to cross. Applying for a “discretionary” conditional land use permit (CUP) from the Planning Department is the first step towards local approval. Once taken care of alongside the additional certifications and environmental assessments, then you are steps away from acquiring the cannabis retail license in California.

6.    Acquire State Cannabis Licenses

By this stage, you must obtain everything required to gain state approval. However, you’d be obliged to submit certain documents. They include Security Plan, Seller’s Permit, Local Approvals, Surety Bond ($5,000), Business Entity Formation, Neighborhood Context Map, Live Scan Background Check, Property or Lease Agreement, Premises (Site/Facilities) Plan, Business and Operations Plan as well as the Labor Peace Agreement (>20 employees)

Final Note

Getting a retail cannabis license in California isn’t just a walk in the park. All cannabis licenses come with an agreement to track inventory to stay up-to-date, and report submittals to state officials. However, and with a little guidance from the tips above, then you should be good to go and, of course, get your cannabis retail license with some ease.

Need help applying for your cannabis business license application?

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