Marijuana Retail Sales


If you want to legally sell recreational cannabis within the state of California, you will need to obtain both a state license and local permission. The possession and consumption of recreational marijuana for adults over 21 years of age has been legal in California since November 9, 2016, when the Adult Use of Marijuana Act (AUMA) went into effect.

Both state licensing and local permitting processes will be time-consuming, complex, and expensive. The success of your business will depend on your ability to navigate dozens of rules and regulations. With the help of an experienced California marijuana business lawyer, you can reduce the stress and confusion of dealing with the administrative process, and focus on growing your company.

If you have questions about opening a California marijuana retail business, call McElfresh Law today at (858) 756-7107 to schedule a consultation.

How Do I Open an Adult Use Cannabis Retail Business?

The Bureau of Marijuana Control (BMC) will regulate businesses that transport, distribute, and sell both recreational and medical cannabis. The licenses for recreational and medical cannabis are distinct, meaning that if you want to sell both medical and recreational cannabis, you will need separate licenses. Under AUMA, there are two licenses that allow you to sell marijuana to the public:

  • Type 10 (Non-Medical) Retail- This license allows you to sell and deliver recreational cannabis.
  • Type 12 (Non-Medical) Microbusiness- This license authorizes you to cultivate up to 10,000 square feet of canopy while operating as a manufacturer, distributor, and retailer with on-site consumption.

The Medical Cannabis Safety and Regulation Act (MCRSA) limits the ability of medical marijuana businesses to vertically integrate. AUMA takes the opposite approach, allowing a single business to hold retail, cultivation, distribution, and manufacturing licenses. The only businesses that must only have a single license are testing facilities. In theory, your business can vertically integrate, but the cost of applying for each license with a different administrative agency may be prohibitive.

How Does the AUMA Licensing Process Work?

Until the end of 2019, you can only apply for an AUMA retail license if you were a California resident as of January 1, 2015. The State will give your license application priority over other applications if you were a legal and fully compliant medical marijuana business as of September 2016. The Bureau of Marijauna Control will start accepting retail license applications by early 2018, and may deny applications on the basis of any of the following:

  • Restraint on competition- If the state determines that your business will establish a monopoly, they will deny your application.
  • Participation in the illegal market- Licenses will not be issued to any business that allows its products to be diverted into the black market.
  • Encouragement of abuse- Businesses that encourage the abuse of cannabis or other drugs cannot obtain licenses.
  • Exposing minors to cannabis- AUMA forbids cannabis businesses from opening within 600 feet of daycares, schools, or youth centers. Additionally, your business must not cater to or attract clients under 21 years of age.
  • Excessive concentration in a particular locality- The state may deny your license application if there are already too many cannabis retailers in your area.
  • Criminal record- You’ll need to submit to a federal background check as part of your application. A criminal conviction for a serious felony or an offense that demonstrates your inability to legally operate the business may justify the rejection of your license application. Drug convictions, however, are not necessarily a bar to obtaining a license.

Your application should include a detailed business plan and enough documentation to show that you meet the above criteria. Additionally, you must prove that you have the right to occupy your business’s premises. Unlike a medical cannabis business application, you do not need to provide proof of your compliance with local regulations, but in practice you will eventually need to get permission from your local government to open your business.

How A San Diego Marijuana Lawyer Can Help

The city of San Diego is the only municipality in San Diego County that allows recreational marijuana retail businesses. However, the municipal government is currently not accepting applications. In the meantime, you should begin working with a Southern California cannabis business attorney so that you are ready when local governments and the state of California begin authorizing marijuana retail stores. If you want to know more about opening your own cannabis business, call Jessica McElfresh of McElfresh Law today at (858) 756-7107 for a case consultation.