On January 1, 2018, the use of recreational marijuana became legal in the state of California. Under the Adult Use of Marijuana Act, individuals 21 years or older are now permitted to use marijuana recreationally.
What does that mean for potential recreational marijuana dispensary owners who want to enter the business? While it’s now legal to start a marijuana dispensary for recreational use in California, that doesn’t mean they make it easy. Here are a few of the steps you will need to go through:
Obtaining a Seller’s Permit
Like other businesses selling goods, individuals and startups interested in selling cannabis or cannabis products will need to register for a seller’s permit. This is a basic prerequisite when applying for a cannabis dispensary license. There is no cost to obtain a seller’s permit in California.
There are a few cases where you may be exempt from registering for a seller’s permit, specifically if you operate a collective that dispenses medical marijuana. For recreational marijuana dispensary owners, there is no exemption.
Cannabis License Durations and Other Types of Licenses
There are primarily two different license durations — temporary (valid for 120 days) and non-temporary. A non-temporary license is valid for up to 12-months and must be annually renewed.
Any license issued by the state will be valid for only a year. Until the Bureau of Cannabis Control finalizes a draft for what is required at the time of license application, a checklist for anticipated annual license application requirements has been made available to the public.
A few of those requirements from The Bureau of Cannabis Control are listed below:
- Business Information – e.g., name, seller’s permit number, financial information, operating procedures
- Individual Owner Information – e.g., government-issued identification, criminal history
- Premises Information – e.g., physical address, proof the business is not within 600 ft of a grade school or daycare
For those wanting to start a recreational marijuana dispensary, this checklist will help ensure you have time to gather what is necessary in order to apply for a state license.
Types of Cannabis Dispensary Licenses
Depending on how your recreational marijuana dispensary operates, there are three, different license types defined by The Bureau of Cannabis Control that you will need:
- Retailer License – a licensee is permitted to sell cannabis goods to customers on-premise or by delivery
- Retailer (non-storefront) License – a licensee is permitted to sell and deliver cannabis products to customers
- Micro-business License – a licensee can engage in cultivation, manufacturing, distribution, and retail sale, or any combination of the four activities
All licensees must also hold an A-license to sell recreational cannabis (as opposed to an M-license for medical cannabis) in order to own and operate their marijuana dispensary.
Receiving a Recreational Dispensary License in California
The licensure requirements for medical and recreational cannabis products are now the same since Senate Bill No. 94 passed. In the state of California, there are three agencies involved in making the regulations on how marijuana can be grown, transported, sold, and where it can be consumed by legal adults.
The three agencies responsible for distributing licenses are listed here:
- CalCannabis Cultivation Licensing — responsible for distributing licenses to cultivators.
- The Bureau of Cannabis Control — the lead agency; responsible for distributing licenses to retailers, distributors, testing labs and micro-businesses.
- The Manufactured Cannabis Safety Branch — responsible for distributing licenses to manufacturers.
As with any other business operation, owning and operating a recreational marijuana dispensary can be a challenge. Since California passed Senate Bill No. 94, it paved the way for new regulations that took effect on January 1, 2018.
This is great news for aspiring recreational marijuana business owners!
Ever since SB 94 passed, business owners can open a recreational marijuana dispensary without needing to follow the strict policies that used to be in place with medical marijuana dispensaries prior to January 1, 2018.
Obtaining a Local City or County License Before a State Bureau Issued License
The state of California advises you obtain a local license before applying for a Bureau-issued recreational marijuana dispensary license. This is why:
- Applicants for non-temporary recreational marijuana dispensary licenses — must comply with regulations and ordinances within their local city and county. Local jurisdictions may ban, in whole or in part, medicinal and adult-use commercial cannabis activity.
- Applicants for temporary marijuana dispensary licenses — must obtain a license, permit, or authorization from their local city or county when applying for a temporary state license.
Will the State Bureau Issue a Limited Number of Marijuana Dispensary Licenses?
As of November 2017, there have been no plans to limit the number of cannabis licenses within the state of California. However, cities and counties can operate under local jurisdictions. Depending on where you live or plan on opening your recreational marijuana dispensary, your local city or county may deny your retail or micro-business license due to excessive concentration.
Want to Start a Dispensary in California?
Cayenne Consulting offers business planning specifically for cannabis businesses, making them an excellent choice for anyone interested in joining this budding industry.