Both medical and adult-use marijuana has been legalized in California. California legalized medical marijuana in 1996, through Proposition 215, which provided a legal way for qualifying patients in the state to access and utilize medical cannabis. In 2016, California legalized recreational medical marijuana through a ballot, Proposition 64, which provided a legal system and access to marijuana for persons 21 years and older. Marijuana businesses are allowed to grow, manufacture/process, delivery/transport, and sell marijuana are required to be licensed by local and state government.
NUMBER OF CALIFORNIA CANNABIS BUSINESS LICENSES AVAILABLE
The number of marijuana business licenses available are subject to each local municipality (city, township, borough, county) and its local ordinances. Local governments will be allowed to regulate the number and types of licenses allowed to operate within their jurisdiction. Types of licenses allowed include the following:
California Cultivation License: can grow cannabis plants and sell wholesale to other licensed California Cannabis Businesses. There are no state-wide limits on the number of cultivation licenses available.
There are multiple types of Cannabis Cultivation Licenses Available:
- Type 1 – Cultivation; Specialty outdoor; Small.
- Type 1A – Cultivation; Specialty indoor; Small.
- Type 1B – Cultivation; Specialty mixed-light; Small.
- Type 1C – Cultivation; Specialty cottage; Small.
- Type 2 – Cultivation; Outdoor; Small.
- Type 2A – Cultivation; Indoor; Small.
- Type 2B – Cultivation; Mixed-light; Small.
- Type 3 – Cultivation; Outdoor; Medium.
- Type 3A – Cultivation; Indoor; Medium.
- Type 3B – Cultivation; Mixed-light; Medium.
- Type 4 – Cultivation; Nursery.
- Type 5 – Cultivation; Outdoor; Large.
- Type 5A – Cultivation; Indoor; Large.
- Type 5B – Cultivation; Mixed-light; Large.
California Manufacturing License: can extract, process, and produce cannabis products such as edibles, concentrates, tinctures, etc. and sell to retail stores. There are no state-wide limits on the number of cultivation licenses available.
There are multiple types of Cannabis Manufacturing Licenses Available:
- Type 6 – Manufacturer 1; or extraction using a mechanical method or non-volatile solvent (ex: CO2, ethanol, water, or food-grade dry ice, cooking oils, or butter)
- Type 7 – Manufacturer 2; for extraction using a volatile solvent (ex: butane, propane, and hexane)
- Type N – Manufacturer; for infusions
- Type P – Manufacturer; for packaging and labeling only
California Retail License: can purchase cannabis from licensed cultivation and manufacturing facilities and sell cannabis to persons 21 years and older or qualifying patients with a valid medical marijuana card. There are no state-wide limits on the number of cultivation licenses available.
There are multiple types of Cannabis Retail Licenses Available:
- Type 9 – Non-Storefront Retailer (delivery); Sells and delivers cannabis goods to customers. A retailer (brick & mortar) must have a licensed premise, but it is not open to the public.
- Type 10 – Retailer; Sells cannabis goods to customers at its premises or by delivery. A retailer must have a licensed physical location(premises)where commercial cannabis activities are conducted.
HOW TO START A CANNABIS BUSINESS IN CALIFORNIA
To obtain a marijuana business license in California, you will be required to submit an application. As part of the application, you will be required to submit marijuana business plans such as the following:
- Business Plan
- Financial Plan
- Cultivation, Production, and/or Dispensing Plan
- Inventory Control Plan
- Security Plan
- Recordkeeping Plan
- Patient/Customer Education Plan
- Community Benefits Plan
Schedule for a complimentary 15-min consult with our licensing/application expert to learn more about how we may be able to assist you.
ENHANCED OVERVIEW OF MARIJUANA IN CALIFORNIA
Being the first state to legalize medical cannabis in 1996, California failed to provide regulations for medical marijuana businesses which led to local governments taking over and regulating marijuana businesses within its jurisdiction. Finally, Governor Jerry Brown signed 3 bills that established a statewide regulatory system for medical marijuana businesses in 2015. Out of the 17 business licenses available, as outlined above, local governments will determine the number and type of licenses that will be granted within its jurisdiction.
The legalization of marijuana for residents 21 years of age and older happened when the Adult Use of Marijuana Act (AUMA), also known as Proposition 64, was passed in November of 2016 with a 57% voter approval. Allowing for the legal possession of marijuana up to an ounce, and the right to grow up to 6 plants at home for personal use. Soon after on June 2017, California created a single regulatory system that governs the medical and adult use cannabis industry under the Medical and Adult-Use Cannabis Regulation and Safety Act (MUCRSA). By January 1st, 2018, AUMA authorized the sale and distribution of cannabis through regulated businesses.
On September 27th, 2018, Senate Bill 1459 was signed by Governor Jerry Brown, permitting new 12-month “Provisional” marijuana business licenses to existing marijuana companies with a current temporary marijuana business license and a submitted application for an annual state license. The provisional marijuana business license allowed these businesses to continue operating without a permanent license while state and local officials processed a backlog of permit applications.
California’s three state cannabis licensing authorities issued a statement that the Office of Administrative Law (OAL) officially approved state regulations for cannabis businesses across the supply chain on January 16th, 2019.
CALIFORNIA MARIJUANA TIMELINE
1996 – California legalized medical cannabis
2016 – California legalized adult-use cannabis
2018 – California adult-use cannabis went into effect
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