If you want to start a medical marijuana business or bring your existing one into compliance with current California law, you will need to obtain a medical cannabis business license. California’s new medical marijuana law, the Medical Cannabis Regulation and Safety Act (MCRSA), requires that every medical marijuana business – from cultivators to manufacturers, to distributors, to testing labs, to retailers – must have a state license. There are currently 17 California medical marijuana license types.
The process for obtaining a medical marijuana license is extremely complex. You will need to obtain a local permit for your business as a condition for applying for a state license, so essentially you will need to go through two grueling application processes. For this reason, you should retain the services of an experienced and skilled medical marijuana attorney to help you succeed at every stage of the process.
Call McElfresh Law at (858) 756-7107 to find out how we can help you with your medical marijuana business.
Free consultation for criminal defense cases only. Cannabis business consultation requires a fee.
Medical Cannabis Business Licenses Available Under MCRSA
The Department of Food and Agriculture will issue the following licenses for cultivators:
- Type 1 – The specialty outdoor license is for naturally lit cannabis farms of up to 5,000 square feet or 50 plants on non-contiguous plots.
- Type 1A – The specialty indoor license covers single location indoor farms with less than 5,000 square feet of canopy that use only artificial light.
- Type 1B – The specialty mixed-light license applies to single premise growing operations that use a combination of artificial and natural lighting on up to 5,000 square feet of canopy area.
- Type 2 – The small outdoor license is for single location grow operations of between 5,001 and 10,000 square feet of canopy that use no artificial lighting.
- Type 2A – The small indoor license applies to the cultivation of between 5,001 and 10,000 square feet of canopy at a single location where only artificial lighting is used.
- Type 2B – The small mixed-light license covers single location farms that use a combination of natural and artificial lighting on 5,001 to 10,000 square feet of canopy area.
- Type 1C – The specialty cottage license is available for single location farms of up to 2,500 square feet of mixed-light canopy area, up to outdoor 25 plants, or up to 500 square feet of indoor canopy.
- Type 3 – The outdoor license applies to farms of 10,001 square feet to one acre of canopy at one location that don’t use artificial light. Only a limited number of these licenses will be available.
- Type 3A – The indoor license covers growers who use only artificial light on 10,001 to 22,000 square feet of canopy at one location. Only a limited number of these licenses will be available.
- Type 3B – The mixed-light license is for farms that use a combination of natural and artificial light at one location that holds 10,001 to 22,000 square feet of canopy area. Here too, the department will only issue a limited number of these licenses.
- Type 4 – The nursery license doesn’t limit the number of plants or canopy area that you may grow. Holders of this license may transport live plants.
The Department of Health will handle licenses for testing facilities and for manufacturers of edibles, creams, concentrates, and oils:
- Type 6 – This license is for manufacturers of cannabis products that don’t require the use volatile solvents such as butane.
- Type 7 – This license is for manufacturers of cannabis products that do require the use of volatile solvents.
- Type 8 – This license applies to cannabis-product testing facilities.
The Department of Consumer Affairs will issue all remaining licenses:
- Type 10 – This license is for dispensaries with a single location.
- Type 10A – This dispensary license may be issued for businesses with up to three retail locations.
- Type 11 – This license applies to cannabis distributors.
- Type 12 – This license is reserved for transporters of cannabis.
The California legislature wants to keep large conglomerates from taking over the medical cannabis industry, so MCRSA makes it difficult for businesses to vertically integrate. This means that a single cannabis business cannot generally grow, manufacture, distribute, and sell medical cannabis:
- Type 1, 1A, 1B, 2, 2A, or 2B cultivators can also hold Type 6 or 7 manufacturing licenses.
- Type 11 distributors must also hold Type 12 transporter licenses.
- Any cultivator or manufacturing business may also hold a dispensary license.
- Type 10A dispensaries may have a combination of Type 6 or 7 manufacturing licenses and Type 1, 1A, 1B, 2, 2A, 2B, 3, 3A, 3B, and 4 cultivation licenses – so long as the total cultivation area doesn’t exceed four acres.
How Can I Obtain a Medical Cannabis Business License?
The agencies in charge of implementing MCRSA are still developing the licensing procedures and fees. For now, we know of the following requirements:
- You need proof that your local government has permitted you to operate your medical cannabis business.
- You must demonstrate that you have the legal right to occupy the proposed location of your business.
- If you’re a cultivator, you must be registered as an agricultural employer.
- For a cultivation license, you must submit a detailed plan regarding the size of your grow site, what chemicals you will use, and how you will source and store water, remove waste, maintain security protocols, track inventory, control quality, and store and label your products.
- For other license types, a detailed business model and location plan is necessary.
- You need to show proof that you have a bond of at least $25,000.
- If you have more than 20 employees, you must submit a labor peace agreement.
- You need to send your fingerprints to the Department of Justice for a background check, and your employees and partners must do the same.
- If you’ve been convicted of a felony involving drugs, violence, fraud, or deceit – or any criminal offense that could affect your ability to legally and safely operate a medical marijuana business – your license application may be denied.
It’s important to remember that even before you can apply for an MCRSA medicinal marijuana business license, you will need to go through the local permitting process. The process for obtaining a Conditional Use Permit (CUP) for a marijuana business can be grueling and expensive. If you want to obtain an MCRSA license next year, you need to start working on getting a local permit now.
San Diego medical marijuana business attorney Jessica McElfresh can help you succeed at both the local permitting and state licensing stages. At McElfresh Law, not only do we have a proven track record of helping medical cannabis businesses thrive, we are also able to take your defense should you be charged with a crime relating to your business activities. If you want to obtain an MCRSA license for your cannabis business, schedule a consultation today by calling (858) 756-7107.
This website is intended for informational purposes only. Use of this website does not create an attorney-client relationship. Free consultation for criminal defense cases only. Cannabis business consultation requires a fee.