How To Start an Edibles Business in California (Follow This Plan)

While starting a marijuana edibles company isn’t cheap, it’s often both cheaper than opening a dispensary and less complicated than joining the industry as a grower. 

Here’s our guide on how to start an edibles business in California. 

Check Your Local Ordinances

Although Proposition 64 legalized cannabis in California, you cannot get a local permit in some counties and cities. They have their own ordinances that prohibit cultivating, manufacturing, or selling marijuana products. 

Before going any further, search online for “cannabis ordinances” plus the name of the county where you’ll be operating to make sure the California edibles business you want is legal. 

Choose Your Business Name and Entity Type

First, choose the name you want to give your edibles brand. Also, decide which type of business entity you wish to form: 

  • Limited liability company (LLC)
  • Corporation
  • Partnership
  • Sole proprietorship

The entity type you choose will affect how your business and staff are taxed, how you run the business, your personal liability, and more. 

Find a Good Location for Your Business

Statewide, marijuana businesses cannot be within a 600-foot radius of a daycare facility or K-12 school. Cannabis businesses also cannot operate from a private residence, or require people to pass through a place that sells tobacco or alcohol. 

Your location should be accessible and have the right amenities on-site so staff can happily work all day. Confirm that you can tick all the boxes before settling on a location. 

Get Licensed

Check with the local city and county about how you should obtain the right licenses. Each will require a slightly different list of documents from you. You’ll also need to apply for: 

  • A city and/or county license, before you can apply for a state license
  • Required state licenses
  • A CDTFA seller’s permit
  • A CDTFA cannabis tax permit
  • Licenses from the California Department of Cannabis Control, depending on your product types

LLCs and corporations also need to file and renew a Statement of Information with the California Secretary of State within the first 90 days of registering. 

Once you have your certificate, display it prominently on your premises. 

Create an Edibles Business Plan

An airtight business plan is crucial in the cannabis industry to secure funding. At base, it should provide a brief description of your company’s: 

  • Competitors
  • Staff organizational structure
  • Operations infrastructure
  • Plans to source your cannabis
  • Brand identity and packaging
  • Product offering
  • Fixed and ongoing costs
  • Safety and product quality obligations
  • Marketing/sales strategy
  • Distribution channels
  • Chosen management software
  • Plans for financing

Hire Your Team by the Book

Need staff for your California cannabis edibles business? You must register your business as an employer and apply for a federal Employer Identification Number (EIN). You’ll also need to consider: 

  • Payroll taxes
  • Workplace health and safety regulations
  • Equal employment opportunity
  • Wage withholding requirements
  • Requirements for State Disability Insurance
  • Unemployment insurance
  • Matching employer withholding requirements with employee employment eligibility requirements

Know Your Ongoing Obligations

Several agencies in California administer a variety of taxes for businesses. You should consult them to figure out the exact tax obligations of your business. 

Once your products are lawfully in use, you may also wish to register your trademark with California’s Secretary of State. 

Need a Business Loan for Your Cannabis Edibles Business? 

Fill in our quick California-specific form to see how we can help you. 

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