In February, the California Department of Health Services (CDHS) began accepting applications for cannabidiol (CBD) regulatory testing, which will allow licensed cannabis businesses to determine if their product is compliant with state regulations.
This is a great step forward in making it easier for small businesses to start and run a business. To learn more about the testing program and how to apply, go to www.cdhsa.ca.gov/businessregulations or call 866-957-6778.
Types of licenses
There are many ways to run a cannabis business in California. As the state capital, Cali
has numerous high-tech companies that are focused on innovation in the cannabis industry. Many of these
companies are legally licensed to sell products that contain cannabis, but not all companies operate in compliance with state law.
Having this wide range of licenses has been helpful to consumers, as there are now more options for purchasing marijuana than just the traditional green and white varieties.
Some of these licenses include: cultivation centers, retail stores, educational institutions, and telepresence farms. Each of these can offer their own set of products and services, depending on who they contract with.
Who can get a license?
Cannabis businesses can apply for a license to sell cannabis, known as a “business license.” A business license is required in order to operate a business in California.
There are several levels of business licenses, and each has different regulations and restrictions. A store may not sell cannabis, or only cannabis sourced from California counties, or only medical cannabis, or only with a drip process. There are even level-specific names for them such as “farm to table” or “table top.”
To obtain a level-specific business license, companies must pay a application fee, provide proof of state insurance coverage if the company sells only medical cannabis, and pass an exam intended to measure their knowledge of cannabis laws.
Businesses that hold lower levels of licenses may use corrupt practices legislation (ccommercial) to illegally evade regulation.
Cost of a license
When a business or individual wants to operate as a cannabis retailer, they must currently get a federal license called a Department of Justice (DOJ) permit.
Once the business has their permit, they can open up their doors and sell cannabis, even if itsillegalto do so. The standard maximum price per gram for legal cannabis in California is $10 per serving, making it cost-effective for small businesses to offer their customers affordable and legal cannabis.
Some permits are for Manufacturing Cannabis Products, Loading Facilities, or Processing Stations. These may be used if certain features are lacking in an existing business or if another company was previously unable to obtain a permit.
As mentioned before, having anCONNECTION WITH CANNABIS is the most important thing when applying for a permit.
Apply for a cannabis business license
As soon as a business receives a license, it is required to apply for and receive a permit. A cannabis business license is classified as an industrial or manufacturing permit in California, so expect some paperwork before you start selling.
Selling cannabis is not free. The sale of marijuana products like edibles and oil is usually priced at around $25 for a large bottle (300 to 400 mg) and $10 for an individual piece. At those prices, this can be a very profitable business!
Many people believe that having a sales license makes them an “asset” of the business, meaning they are more confident in their sales techniques and can charge more because they are “owed” the money by the government. While having the ability to apply for licenses and pay fees does not guarantee quality salesmanship or quality product, it does help!
Take time to educate yourself about cannabis businesses before you get into the market to see if they can help meet your needs.
Get an establishment inspection
Before you apply for or obtain a business license in California, you must have an establishment inspection. Having a business license does not mean you are allowed to operate your business, only that you will be inspected and licensed if you need to.
There are a few conditions that require your license, such as being able to display the state ID card or being supervised by an authorized person at all times. Being able to accept credit and debit cards and having a non-profit status are other conditions of license.
In order to have your business license, you must be licensed. In order to have a business licence, you must be licensed. Having a licence is not enough to get your shop open; you must be supervised by an authorized person at all times.
Prepare your business plan
As mentioned earlier, cannabis sales are permitted in California only if the product is extracted and packaged as accordance with the legal definition of cannabis.
Find a financial sponsor
Even if you don’t plan to use cannabis, it’s important to find a financial sponsor because without a bank account or credit card, you will not be able to buy money market accounts or get loans through mainstream channels.
The cost of cannabis is still unregulated, meaning there is no way to know what price you will pay for it or whether it will be cheap or expensive. Having access to a bank account and getting approved for a credit card can also be difficult in Cannabis-legal states, making sure you find the right bank for your needs and meet the requirements of your state.
If you need a loan for cannabis, looking up potential financial sponsors can be tricky too, as they can’t yet ask about income or previous drug habits.
Pay fees and submit paperwork
Once you are in the cannabis business, it is important to pay fees and submit paperwork to be able to operate. This includes having a legal business address, selling directly or providing services like cell phone activation, opening a bank account, and having the authorization to purchase and sell property under your control.
Many small businesses do not have this authorization and run out of money or unable to meet regulatory requirements. If you need special permission to operate as a business in California, send in your required paperwork and you may get your permits quickly.
If you are planning on operating as a commercial entity in California, make sure you have the necessary documents or permissions ahead of time because it can be difficult to get these later on.
