One of the most daunting elements of starting any kind of business is the paperwork involved to keep things above board. The cannabis industry is no exception to this. To distribute cannabis, you’ll first need to apply for and be granted the proper license by the state of California. In fact, distributing without a license is classed as a misdemeanor and can result in six months in jail and/or fines up to $500.
Want to make sure you acquire the proper licenses for your cannabis distributor business? This article will offer you a helpful guide.
Different Types of Cannabis Distribution Licenses
Before applying for a cannabis industry-related license, it’s important to first understand the different types of cannabis licenses available in California. Almost every part of the cannabis industry — from manufacturing to cultivation, testing, and distribution — warrants a license of some sort. Even an organizer of a cannabis event requires a Cannabis Event Organizer License.
Specifically, cannabis distributors can apply for one of these four licenses:
- Type 9 — This license is for cannabis retailers who plan to sell cannabis products to customers through online sales.
- Type 10 — This license is for cannabis retailers who plan to sell cannabis through a brick-and-mortar storefront establishment.
- Type 11 — This license is for distributors transporting cannabis products between cultivation and testing labs or transporting them to retailers. It allows distributors to order the testing of their products, perform quality checks, package or repackage products, label or relabel them, and offer storage services.
- Type 13 — This license is restricted to cannabis products’ transport to retailers or other distributors. It allows distributors to transport cannabis goods and merchandise but does not allow for the additional privileges of a Type 11 license.
City or County Approval to Distribute Cannabis
Before applying for a license, you’ll first need to ensure that you have city or county approval to distribute cannabis. California has a total of 58 counties, each with its own laws approving or banning cannabis product manufacture, cultivation, and distribution. Cities may also have their own laws.
If you operate out of an incorporated city, you’ll need to check for city approval. If you operate out of an unincorporated area, you’ll need approval from your county. Fortunately, this is relatively easy to check online before applying for your license.
How Much Does a Cannabis Distributor License Cost?
Costs will vary depending on the type of license you need. For example, the Type 13 distributor license, though more restrictive, is considerably cheaper than the Type 11 license. According to the Department of Cannabis Control in California, the application fee for both retailers and distributors is always $1,000. Moreover, the license fees are based on your gross annual revenue:
- Distributor license (Type 11) fees — $1,500 to $180,000
- Distributor license (Type 13) fees — $200 to $1,000
- Retailer license fees — $2,500 to $96,000
- Microbusiness license fees — $5,000 to $300,000
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