How to Open a Marijuana Dispensary in California-Cannabis Industry

In the Golden State, dispensaries have mushroomed since recreational marijuana was legalized in 2016. Marijuana dispensaries are similar to other businesses in California, except that the marijuana dispensary California cannabis industry is highly regulated and requires more licenses than other businesses.

Introduction of Marijuana Industry:

There are many regulated activities in the marijuana industry, including cultivation, testing, manufacturing, distribution, and dispensaries. Finally, the dispensary is the last stop in the supply chain-it’s where the product is delivered to the customer. A marijuana dispensary can be either a storefront where customers can visit or a delivery-only operation. There are different licensing requirements for each type of marijuana dispensary.

Research City & County Marijuana Laws:

California has legalized the use of marijuana dispensaries at the state level, but they aren’t allowed in every town or county. Some municipalities prohibit all cannabis-related businesses. You should check that it is legal in your area to open a marijuana dispensary before taking any steps towards opening one.

A license will need to be obtained from the town or county where you are located and you must follow the local zoning laws if selling cannabis is allowed. Dispensaries are only allowed in certain areas or in some cities and counties. Dispensaries cannot open within 600 feet of schools, daycare centers, or youth centers in California due to a statewide ban.

You should make sure you follow all the rules and check the licensing requirements in your area–running an unlicensed dispensary is a crime, which may prevent you from opening a legal dispensary in the future. You may also face criminal penalties, including jail time of up to six months and a $500 fine.

Start Your Own Business:

It is the same process as starting any other type of California business to open a marijuana dispensary. Choosing a legal structure, choosing a name, and filing the appropriate organizational documents with the state will take some time. You can learn more about starting a business in California in our article, Start Your Own Business.

Start The Process of Obtaining City&County Permits:

California has different regulations for opening marijuana dispensaries in each city and county. The requirements can be more onerous than what’s typically required to open a business. It is likely that you will have to submit several applications, pay fees, and participate in hearings. The application process will require detailed information from you. You may need to submit:

  1. Zoning verification Letter
  2. Live scan & Criminal history check 
  3. Safety & security plans
  4. Community & neighborhood plans
  5. Payment of hefty fees

Tax And Fee Administration of California Permits:

California Department of Tax and Fee Administration requires a seller’s permit and a cannabis tax permit for anyone selling cannabis or products containing cannabis. Before you can apply for other state licenses, you must have the seller’s permit.

Apply for a California Marijuana License:

Following that, you will need to obtain a state license. It is recommended that you obtain your county or city permits before applying for your state license.

A license from the Bureau of Cannabis Control is required for all distributors and retailers. Adult Use Licenses (A-Licenses) and Medicinal Licenses (M-Licenses) are available. Applications must be submitted as follows:

  • Business information, such as formation documents, financial statements, and operating plans.
  • Owners’ information, including Live Scan fingerprints for background checks. If any of the owners has committed a crime in the past, you may not be able to obtain a license.
  • Documentation of compliance with the California Environmental Quality Act.
  • Scale drawings of the premises. Give information about the dimensions, exits, cameras, and restricted areas.
  • The state of California requires a surety bond of at least $5,000.
  • Insurance proof for commercial general liability.
  • The amount of fees varies from $2,500 to $57,000, depending on the expected revenue.

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