If you want a California Cannabis License, it is essential to understand the legal process that goes along with the business. It includes obtaining a license and registering your business with the state.
The process can be complex, but with the proper guidance from a cannabis experienced regulator who understands how these things work in California, it will become more accessible.
But before you visit or search for a compliance expert, here is a step-by-step guide to getting your cannabis license in California!
Step 1: Find the Right Location
You’ll first need to find a location that is not too close to other dispensaries. It will help ensure your business does not get caught up in a war between rival groups, which can cause problems for anyone involved. It is also essential to provide enough space for your store and its employees, so don’t pick a building that’s too small.
Once you’ve found an ideal location and secured it for yourself (or bought out another dispensary), there are still some things leftover from this process: getting permits and licenses through local governments.
Step 2: Research the Local Market and Regulations
There are more than 10 different California cannabis license types, all of which support different business types. So, find out how many licenses have been issued, what the regulations are for cannabis businesses and products, and how many cultivation facilities there are in your area.
Step 3: Create Your Cannabis Business Structure
You’ll need to choose the best business structure for your cannabis business. There are two main options:
A corporation is the most traditional way to form a legal entity in California, and it’s generally recommended as the first choice for most new businesses. It offers many benefits, such as liability protection and access to more tax deductions than other types of structures.
With the exception that corporations take longer than LLCs or sole proprietorships to form. You’ll have to file papers with the state and pay an initial fee before anything else happens.
Limited Liability Company (LLC)
An LLC allows you more flexibility than a corporation but less so than a partnership or sole proprietorship, while they aren’t required by law (and therefore aren’t always available). They’re often chosen when there isn’t enough money left over after setting up all necessary paperwork regarding taxes and insurance needs associated with running an agricultural operation like yours.
Step 4: Create Your Business Plan
You should also create a business plan that includes the following:
- Location and contact information for your business.
- Market analysis; describe what you are looking to do in terms of quality and quantity, as well as how it will be distributed, if at all.
- Product and service offerings (including packaging).
- Financial projections are based on expected sales volume over the next 12 months. This includes outlining any financial arrangements you may have made with suppliers or investors during this time (e.g., loans). This can help ensure that you don’t overextend yourself financially before opening day.
Step 5: Apply for a California Cannabis License
The first step in getting a license is to apply. There are two ways you can do this: online or by mail.
- If you choose to apply online, all your information will be collected automatically and saved on the website for future reference should any questions or issues with your application. This process takes about five minutes to complete, so don’t worry if it seems long at first; you’ll be finished soon enough.
- If applying by mail instead, simply fill out the application form provided by the Bureau of Cannabis Control (BCC) along with any additional supporting documentation necessary (such as copies of proof-of-age cards). Once submitted, payment via check or money order is payable directly into the BCC account.
Requirements for Getting a Cannabis License in California
California is a vast state with a lot of people and many different types of jobs. To become a licensed marijuana dealer, you must meet some minimum requirements.
- You must be 21 years old.
- You must be a resident of California for 2 years and have the proper documentation to prove it (such as a photo ID).
- You will need to provide proof of your legal residence at the time of application, such as a utility bill or bank statement showing your address.
- You can’t drive under the influence of marijuana; this includes driving with any amount of THC in your system.
- Must have a valid California State tax identification number.
- You must be able to pass an FBI background check and fingerprinting by local law enforcement officials.
- Finally, and most importantly, you’ll need proof that your business is financially stable enough so it won’t close down due to a lack of funding.
Step 6: Register with the IRS
If you are a cannabis business owner, you must register with the IRS. You can do this by visiting the IRS website. The website will walk you through registering your company’s tax identification number, sales tax permit number, payroll taxes, and unemployment taxes. If possible, it’s best to file quarterly returns instead of annually, so there are no gaps in payments when they get due later in the year (e.g., quarterly instead of annual).
Step 7: Hire a Great Cannabis Expert to Walk You Through Licensing Process
The cannabis licensing process can be costly and complicated. If you are not careful, your finances will suffer.
Finding an experienced and savvy cannabis consultant is crucial to your success as a cultivator and dispensary owner. An experienced regulation consultant will help you with every step of this process, from finding the right location for your business to creating a business plan, applying for licenses, and even assisting during inspections by law enforcement agencies.
The cannabis industry is growing fast. The California Department of Tax and Fee Administration (CDTFA) is working to ensure that the rules are followed, and regulations are in place for those who want to join the business side of this booming industry. Not only will this help ensure the safety of consumers, but it will also help protect their rights and yours.
How we can help?
At Cannabis License Experts, we provide you with the guidance to plan your cannabis business, acquire funding, navigate the legal requirements, and acquire the appropriate cannabis license for your operations. As the California cannabis license industry develops, more and more licensed producers will be needed to meet the demands of consumers.
Cannabis License Experts offers support from day one of starting your cannabis business, including strategic planning, floor plan preparation, site audits, SOPs, Preventive Control Plan (PCPs), and more.
Our Edibles Compliance division can provide you with a solid plan for your edibles business to help get your products on store shelves.
Contact us today to discover how we can license and legalize your cannabis business to meet federal or provincial regulations.