california cannabis business license

3 min read

How to Prepare for a California Cannabis Business License

November 15, 2017

Preparing for a cannabis business license in California will certainly require some due diligence by dispensary owners and operators. The Bureau of Cannabis Control is expected to release their draft regulations by the end of November 2017 and the applications for a license will be reviewed soon after.

Since the application window is so short and the amount of cannabis businesses expected to apply is so large, temporary licenses will be issued to ensure the transition won’t be delayed. Marijuana retailers and dispensaries should make every effort to accumulate the necessary documentation and information now, before the application process begins.

As a leading cannabis dispensary software company we’re committed to helping marijuana retailers anticipate the sweeping regulation changes in our state. We’ve compiled a comprehensive list of cannabis business license requirements to better prepare dispensary owners and operators.

Business Information

When submitting an application for a cannabis business license to the Bureau of Cannabis Control, you’ll need to provide relevant business information. Including you business name and contact information as well as formation documentation will be required. Additionally all financial information such as loans, investments, and bank accounts should be provided.

All current marijuana dispensary owners will supply their sellers permit and business operating procedures in regards to inventory, transportation and security measures. Dispensary owners will also need to submit government issued ID, social security number, fingerprints and a criminal background check. Gathering all of this information in advance will go a long way in ensuring your application is reviewed in a timely fashion.

Premises Information

Whether you’re applying for a license for your existing dispensary or opening a new location, there are a few things you’ll want include. The premises of you marijuana retailer is not allowed to be within a 600 ft. radius of a school, youth center, or day care facility. Presenting proof of a legal right to occupy the premises such as a deed or lease will also be mandatory.

Providing a diagram of the premises showing the store layout, all entries and exits, and where cannabis will be sold is essential to obtaining a cannabis business license. Cannabis retailers with brick and mortar storefronts will be allowed to apply for both an A-license (adult use) and M-license (Medical Use) if the premises meet code.

Local Compliance

Most dispensaries have been dealing with local compliance ordinances for some time and this will be extremely advantageous when applying for a cannabis business license. Once the application process begins the State of California will be conducting a priority review. Any pre-existing dispensary with non-profit status will be considered first if they were established before January 1, 2016.

So those cannabis businesses with a clean record of compliance will likely see a faster approval of their application. Previous violations of local compliance could delay issuance of a cannabis business license or even qualify your application for rejection.

License Fees

Acquiring a cannabis business license for your dispensary will certainly come with a cost. Currently the Bureau of Cannabis Control will require a $5,000 bond to obtain a license. However a commercial liability insurance policy is also required and is generally an on-going payment.

Of course the license is only valid for one year so dispensaries will need to purchase a renewal. Unfortunately, the renewal price is likely to be the same as the initial price. There are other associated costs that cannabis businesses will want to invest in, such as an accountant and a lawyer. These services will be expensive but are essential to staying compliant and avoiding any regulation violations.

Non-Profit to For Profit

Applying for a cannabis business license does present an opportunity for cannabis businesses to transition away from nonprofit to for profit. This shift will allow dispensaries to register as a limited liability company or a corporation. Consulting with a lawyer is highly recommended when making this change as there are a multitude of state and federal regulations that must be met.

We hope this information will be useful when submitting an application for your California cannabis cannabis business license. Once approved, be sure to install a dispensary POS software that specializes in keeping your business state compliant.