How to Get a Marijuana License in California

California is a great place to own a cannabis-related business. California has always been the most progressive state in the nation when it comes to easing restrictions on marijuana, and recent changes to the law have made things even easier.

In order for your business to be legal, however, you still need a license. To get one, you’ll need to do the following:

Form a business plan

Before you can even apply for a marijuana license in California, you have to have a business plan in place. The smartest move when building your business plan is to get the help of a lawyer.

Part of your plan is deciding on the structure of your business. It could be a corporation, an LLC, a general partnership, or a sole proprietorship. Each of these will mean different things for you when it comes to taxes, fees, and accounting.

Choose your location

Your location is very important. You need to be able to put down an address for your business when you apply for your license. You also must be able to certify that your address isn’t within 600 feet of a school, youth center, or day care center.

It’s important to nail down your address because California law allows every city and county to regulate marijuana in their own way. This means certain areas may not allow a cannabis business inside city limits at all, while others may have additional restrictions about where you can be.

Apply for numbers

You have a couple of applications to finish before you can apply for your license. You need a Federal Employer Identification Number if you’ll be employing anyone to work for you. If you have more than 20 employees, there are extra hoops to jump through.

You also need to apply for a California Department of Tax and Fee Administration Seller’s Permit Number. You will have to put your assigned number down on your license application, or at least be able to attest honestly that you already applied for it.

Finally, you need to show that you are in compliance or exempt from the California Environmental Quality Act. You get this by approaching your local jurisdiction and asking for their review or a letter of exemption.

Fill out an application

On your application, you need to specify whether your business is general or medical related. You also need to state whether you’re planning on having a storefront or running a delivery-only business.

Then you state the type of company you’ve chosen with your business plan and give the names of everyone involved. You also need your company’s name, address, website, email address, and contact phone number.

Finally, you need to make sure you are in compliance with the Compassionate Use Act of 1996 and estimate your revenue expectation. You will be taxed at different rates depending on how much you expect to make.

Gather your documents

When you submit your license application, you’ll need certain documents. These include all the ownership documents for your property, business formation documents, and a diagram of the business premises.

You need to show evidence that you are complying with all the local regulations, and specify how you plan to deal with transportation, storage, waste management, and security in dealing with your cannabis.

Other issues to know about

It is still illegal under federal law to sell marijuana. Even if you are in compliance with state laws, it is good to be aware that the federal response to marijuana sellers varies depending on the Attorney General’s position.

You should also know that if you have a felony conviction which is considered serious or violent, related to fraud or embezzlement, or related to drug trafficking or providing drugs to minors, you will not be able to get a license.

The license fee will cost you between $4,000 and $72,000 depending on the size of the operation. Once you have your license application in, however, you can get right to work making money from your cannabis business.

Adam Torkildson