If you wish to be part of the cannabis industry in California, it is important to get to know cannabis business regulations and the regulatory authorities. In addition to securing local approval, three state agencies are in charge of licensing and regulatory enforcement for commercial cannabis businesses. The California Department of Public Health’s Manufactured Cannabis Safety Branch (MCSB) is in charge of cannabis manufacturing. CalCannabis, a division of the California Department of Food and Agriculture (CDFA), is in charge of cultivation. The CA Bureau of Cannabis Control licenses distributors, retailers, testing laboratories, and microbusinesses.

Depending on your business plan, you may need to file a cannabis business application with one of these authorities. An experienced CA marijuana business lawyer will guide you through the application process and help you prepare to remain compliant with California’s complex cannabis regulations. For assistance with this process, contact McElfresh Law at (858) 756-7107, or reach out through the online form.

Cannabis Manufacturing Licensing

The Manufactured Cannabis Safety Branch (MCSB) is responsible for licensing and regulating commercial cannabis manufacturing in the state. The MCSB works to promote good manufacturing practices as well as safe and sanitary workplaces. Its regulations focus on ensuring cannabis products are free from contaminants, meet product standards, and are packaged and labeled correctly.

To apply for a cannabis manufacturing license, talk with a marijuana business lawyer who is familiar with the steps necessary to start such an endeavor. With your application, you will be required to provide information regarding:

  • The operating premises
  • Operational activities (extraction, infusion, packaging, and/or labeling)
  • Local fire code approvals
  • Any necessary system or process certifications
  • Types of products
  • Waste disposal procedures
  • Inventory processes
  • Quality control processes
  • Transportation
  • Security
  • Compliance with city and county ordinances

Cannabis Cultivation Licensing

CalCannabis it is responsible for licensing and regulating cannabis cultivation businesses in the state. CalCannabis also manages the state’s tracking system, which tracks all commercial cannabis from cultivation to sale.

To file a cannabis business application for a cultivation operation, the CDFA offers a step-by-step video guide online. However, we recommend working with a marijuana business lawyer and not relying on these online materials.

To be approved for a provisional or annual cultivation license, you must show that you meet many cannabis business regulations, including proof of:

  • Surety bond
  • Legal right to occupy the property
  • Water source documentation
  • Water discharge program enrollment
  • California Department of Fish and Wildlife documentation
  • EnviroStor records
  • California Environmental Quality Act compliance
  • California Secretary of State documentation

You also must provide a detailed cultivation plan based on the type of license you seek, such as a nursery license, processor license, or specialty cottage, specialty, small, or medium license.

Licenses by the CA Bureau of Cannabis Control

The CA Bureau of Cannabis Control (Bureau) is the lead agency regarding recreational marijuana business licensing and regulations for both medical and adult recreational use cannabis in the state. As you plan to open and develop a marijuana-related business, you must become familiar with cannabis business applications with the Bureau as well as cannabis business regulations, which are created and enforced by the Bureau.

The Bureau licenses commercial operations involving:

Cannabis Distribution

Distributor licenses are intended for any business that transports cannabis goods, arranges for testing of cannabis products, and performs quality assurance reviews of cannabis products to verify that they comply with packaging and labeling requirements. A distributor transport licensee enables businesses to move cannabis products between licensed cultivators, manufacturers, and other distributors. However, these licensees cannot transport cannabis products to a licensed retailer.

Cannabis Retailers

Storefront retail licenses are for businesses that sell cannabis products to consumers on their premises or by delivery. Retail licensees must have a licensed physical location. The Bureau also allows for non-storefront retail licensees for businesses that will sell cannabis products only by delivery. A non-storefront retailer must have a licensed location to store the cannabis products, and it cannot be open to the public.

Cannabis Testing Laboratories

A testing lab, facility, or entity is a business that offers or performs tests on cannabis goods. The lab must have and maintain ISO/IEC 17025 accreditation. Currently, labs can obtain professional licenses that allow you to operate while obtaining the proper accreditation.

Cannabis Microbusinesses

A microbusiness license allows an operation to cultivate cannabis within fewer than 10,000 square feet and to act as a licensed distributor, Level 1 manufacturer, and retailer, as specified in the application. To obtain this license, you must engage in at least three of the Bureau’s four listed commercial cannabis activities.

Required Operating Procedures For All Cannabis Business Licensees

No matter what type of commercial operation you have or plan to open, several over-arching cannabis business regulations are enforced by the Bureau:

  • Transportation Procedures – You must provide the Bureau with information regarding how the cannabis will be securely transported. If your business will not directly transport cannabis, you must inform the Bureau that you will be contracting for transportation.
  • Inventory Procedures – You must inform the Bureau of who you intend to receive and store cannabis, perform inventory reconciliation, and maintain accurate inventory records.
  • Non-Laboratory Quality Control Procedures – You must describe how you will ensure the cannabis products are properly packaged and labeled, ensure a licensed lab tested the products, and prevent deterioration of the cannabis products.
  • Security Procedures – You must describe your process for allowing individuals to come onto your property and your security measures, including your points of access, security personnel, and surveillance system.

Cannabis Distribution License Requirements

To obtain a distributor license, you must complete the Annual Cannabis Distributor License Application, available on the Bureau’s website. The application requires a non-refundable $1,000 fee.

As a distributor licensee, you must meet an insurance requirement. You must provide the Bureau with a Certificate of Insurance demonstrating you have general liability insurance for no less than $1 million for each loss, and $2 million for the aggregate loss. Your insurer also must meet regulations set out by the Bureau.

Cannabis Retailer License Requirements

The Annual Cannabis Retailer License Application is available online at the Bureau’s website, as well as the instructions for the application. This license application requires a $1,000 non-refundable fee.

Retailers with and without storefronts must also adhere to delivery procedures. You must inform the Bureau of how you intend to:

  • Accept and process orders of cannabis goods
  • Verify the identity and age of a potential customer
  • Verify the delivery address is in California and not a public property
  • Deliver cannabis products to customers (including vehicle and GPS information)

Cannabis Testing Laboratory Requirements

You can find the Annual Cannabis Testing Laboratory License Application online along with instructions. To obtain a cannabis testing lab license, you must fill out the application and pay a $1,000 non-refundable fee.

Testing laboratory licensees must provide to the Bureau documentation regarding:

  • ISO/IEC 17025 Accreditation – This attests the lab’s competence in testing cannabinoids, heavy metals, microbial impurities, mycotoxins, residual pesticides, residual solvents and processing chemicals, and terpenoids.
  • Testing Methods/Standard Operating Procedures – You must outline your lab’s procedures for testing cannabinoids, foreign material, heavy metals, microbial impurities, moisture content and water activity, mycotoxins, residual pesticides, residual solvents and processing chemicals, terpenoids, and homogeneity.
  • Sample Preparations – You must outline your procedures for preparing to sample cannabis and cannabis products.
  • Sampling – You must outline your procedures for sampling cannabis and cannabis products.

Cannabis Microbusiness License Requirements

The Annual Cannabis Microbusiness License Application and relevant instructions are available online. Like other current cannabis business applications, this requires you to pay a $1,000 non-refundable fee.

Because a microbusiness is involved in several different licensed activities, it must comply with several cannabis business regulations, including:

  • If the microbusiness will act as a retailer, it must provide the Bureau with its delivery procedures.
  • If the microbusiness is engaged in distributor activities, it must provide proof of insurance.
  • If the microbusiness will cultivate cannabis, it must provide the Bureau with information regarding the types of cannabis cultivation and the cultivation plan.
  • If the microbusiness intends to manufacture cannabis products, it must provide the Bureau with details of its premises, operational activities, and quality control procedures.

Microbusinesses face a complex application process and regulations. To ensure you make it through the application process as smoothly as possible and are set up to remain compliant throughout your business operations, work with an experienced marijuana business attorney.

Contact a Lawyer Regarding Cannabis Business Regulations and Applications

To ensure your cannabis business application progresses through the system efficiently, it is best to work with a marijuana business lawyer who will ensure your application and attachments are complete, accurate, and error-free. Due to state and federal law, it’s important to work with an experienced attorney throughout the entire process.

Jessica McElfresh has worked within the California cannabis industry for years, and has a history of success with both her business and criminal defense clients. Reach out to her today at (858) 756-7107, or through the online form to schedule an appointment.

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