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How to open a Dispensary in California

As the first state to legalize medical cannabis, California has a rich history of cannabis activism. With the Compassionate Use Act of 1996 (Proposition 215) and the Medical Cannabis Program Act of 2003 (Senate Bill 420), as well as Attorney General Brown’s 2008 memo, commercial businesses began to

establish themselves under a collective model based around patient access.

 

The operating environment for commercial businesses remained extremely convoluted. With the passage of comprehensive legislative and regulatory frameworks beginning in 2015 and ongoing (MMRSA, MCRSA, and MAUCRSA), California’s cannabis businesses now have clarity with respect to state requirements. However, this also has substantially increased compliance costs and oversight reporting.

 

In 2016, voters passed the Adult Use of Marijuana Act (AUMA or Proposition 64). This legalized the use, cultivation, and commercial sales of cannabis for non-medical purposes throughout the state. The state-run California Cannabis Portal provides a single consolidated source of state updates on the local cannabis industry.

 

In 2017, California passed MAUCRSA (Medicinal and Adult Use Cannabis Regulation and Safety Act), creating a regulatory structure for commercial cannabis businesses. State agencies are accepting compliance-based applications for cannabis licenses on a rolling basis.

 

MAUCRSA has created a two-tier licensing system in California: in order to successfully submit an application for a state license, cannabis businesses must receive Local Jurisdiction Authorization. Many jurisdictions have banned these businesses or have implemented competitive applications.

 

MAUCRSA has also given authority and oversight power to various different agencies in the process of reviewing and approving applications for state licenses. The Bureau of Cannabis Control (BCC) oversees all retail businesses, including those with dispensary and distribution licenses. The California Department of Food and Agriculture (CDFA) oversees all cannabis businesses with cultivation licenses, and application materials include pre-approval from the California Department of Fish and Wildlife (CDFW), the California State Water Resources Control Board (SWRCB) and the California Department of Taxes and Fees Administration (CDTFA). The California Department of Public Health (CDPH) oversees cannabis businesses with manufacturing licenses.

"Green Rush Consulting has worked with successful applicants and licensees throughout the state. Our clients have won local approval in competitive jurisdictions like Santa Monica, West Hollywood, San Bernardino and Hayward, and secured compliance-based permits from Humboldt to Sacramento to Richmond."

Licenses Available

Annual Licenses

California’s licensing authorities currently offer the license types listed below. Licensees must also indicate whether they serve the adult use market (A-designation) or medical patients (M-designation), or both.

 

Cannabis Cultivation Licenses: there are 18 cannabis cultivation license types available, tiered by size and distinguished by indoor, outdoor, and mixed light. These also include nursery and processor (trimming/curing/packaging – no extraction) licenses.

 

Cannabis Manufacturing Licenses: there are 4 manufacturing license types available:

  • Type 7 (volatile extraction)

  • Type 6 (mechanical or non-volatile extraction)

  • Type N (edible or topical infusions)

  • Type P (packaging only)

Cannabis Retail Licenses: there are 3 dispensing license types available:

  • Type 9 (non-storefront/delivery)

  • Type 10 (storefront retail)

  • Type 12 (microbusiness)

There are 3 distributor license types available:

  • Type 11 (Distributor)

  • Transport-only distributor

Transport-only self-distribution  

Note: Micro-business licenses are listed under retail above, but also encompass cultivation, manufacturing (extraction), and distribution, depending on the scope requested during license application.

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