You’ll definitely need financing In order to participate in the cannabis industry in California, but you’ll also need a license. California cannabis licenses are issued by three different licensing authorities depending on the type of license being issued: the Bureau of Cannabis Control, California Department of Food and and Agriculture’s (CDFA) CalCannabis Cultivation Licensing, and California Department of Public Health’s (CDPH) Manufactured Cannabis Safety Branch. The Bureau of Cannabis Control issues commercial licenses for medical and adult use cannabis to retailers, distributors, testing labs, microbusinesses, and temporary cannabis events. The CDFA’s CalCannabis Cultivation Licensing authority licenses cultivators of medicinal and adult-use cannabis and implements a track-and-trace system to record the movement of cannabis through the distribution chain. The CDPH’s Manufactured Cannabis Safety Branch regulates and licenses the manufacturers of cannabis-infused edibles for medical and recreational use.
California has a unique system when it comes to determining the cost of a cannabis business license. Rather than charging a flat fee that varies based on the type of license applied for, California requires applicants to estimate the gross revenue for the 12-month license period. Applicants then refer to a chart that identifies tiers that correspond to revenue amounts for individual license types in order to determine the cost of their licensing fee. Fees range from $500 to $300,000 depending on the purpose of the license and the size of the company, so there is a tremendous range of fees.
In order to apply for a license, you must be 21 years of age or older, but you are not required to be a resident of the state of California; any financial partners or employees associated with your business must also be at least 21 years of age. While California does not strictly prohibit those with a criminal record from applying for a commercial cannabis license, your application stands a greater chance of being approved if you and your business partners have clean records. However, applications are considered on a case by case basis. Make sure to check the local regulations on cannabis, as counties in California are able to opt-out of legalization and some prohibit the growth, sale, and use of cannabis. The state of California will not grant licenses to businesses applying for operation in counties or municipalities that have banned the distribution or commercial sale of cannabis. Licenses are not granted to businesses that cannot demonstrate that they understand how to comply with local and state regulations, so you’ll need a well-rounded team of business managers, financial personnel, horticulturists, and more on your side. In order to get all of the pieces in place, you’re going to need financing.
