What marijuana/cannabis businesses can you start in California?


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Category Archives: Cannabis Licensing

What marijuana/cannabis businesses can you start in California?

What marijuana/cannabis businesses can you start in California?

Orange County Cannabis Lawyer

Under the new regulations, enacted as of November 8, 2016, California started to be open for recreational marijuana businesses as of January 2018. What marijuana/cannabis businesses can you start in California?

The new laws and procedures set by California  have provisions for:

  1. Retail marijuana stores
  2. Marijuana product manufacturers
  3. Marijuana cultivators
  4. Marijuana testing facilities
  5. Marijuana Distributors

As of right now, these new regulations allowed the State of California started issuing licenses by regulators starting with temporary operating permits beginning January 1, 2018. Currently, the state has not indicated when they will open the application period to would-be entrepreneurs.

What can I do right now?

To get ahead and be prepared for when the state will start licensing marijuana businesses, you can consult with us, for a fee.  You should also:

  • Read through the regulations, and determine what business type you’d like to have.
  • If you’re serious and want to determine what moves you can be making right now to get a leg up on the competition for licenses – get a paid consultation with us and let our expert associates review your situation and instruct on the intelligent moves you could be making now to increase your chances of obtaining your licenses.

How To Open a Marijuana Retail Store in California

The state allows potential business owners to open a marijuana retail stores in California. Whether this is possible or not will hinge entirely on the city and/or county of choice, as the state allows the local municipalities to ban or place moratoriums on whether to license marijuana retailers for operation or not.

  1. Setup your Marijuana Business Corporation.
  2. Create a Marijuana Retail Business Plan.
  3. Determine your potential location(s) and investigate whether licensing is even possible in the prospective cities or counties. Many cities have made operating cannabis businesses illegal under their city laws.
  4. Acquire the necessary licenses to operate your cannabis store or other operation and be completely legal and compliant.
  5. Install the operational infrastructure to be in accordance with all regulations and then open your doors for business.
  6. Contract with cultivators and/or edible/extraction/infused products manufacturers to grow and produce marijuana products for you, if you don’t want to do it yourself.

How To Grow/Cultivate Marijuana Legally in California

Same as Retail Store steps, the only difference is that you will be contracting with dispensaries, delivery services and/or edible/extraction/infused products manufacturers to grow marijuana for them.

How To Start a Marijuana Delivery Service in California

Same as Retail Store steps, the only difference is that you will be contracting with cultivators and/or edible/extraction/infused product manufacturers to grow and produce marijuana products for you, if you don’t want to do it yourself.

How To Start a Marijuana Edibles, Marijuana Infused Products or Marijuana Extractions Business In California

Same as Retail Store steps, the only difference is that you will be contracting with dispensaries and delivery services to provide your products to customers as well as contract with cultivators to grow marijuana for you if you don’t want to do it yourself.

The latest marijuana industry news, laws, & frequently asked questions for California.

Some resources for you are :

What about the Federal Government making marijuana illegal?

National prohibitions against interstate cannabis commerce and federal banking and drug laws are keeping big companies at bay, which opens the door for small businesses and startups to establish dispensaries, retail stores, cultivators, processing, manufacturing and testing facilities.

The MMJ industry endures in an unclear legal atmosphere. The interpretation and enforcement of laws vary widely from county to county and location is extremely important to your success. California MMJ laws allow for “an exemption from prosecution” if you are operating under specific rules (the CA Attorney General’s medical marijuana guidelines).

Until new MRSA laws are put in place, “PROFITS” are still not allowed by the federal government.  However, you can make a living wage by working as a dispensary director, employee, or grower.

The California Legislative Analyst’s Office is the state’s nonpartisan fiscal and policy adviser. It issued a paper on Tuesday, February 14, 2017, expressing doubt whether implementation of Proposition 64 will be self-funding in the early stages, or turn out a drain on the treasury.

What follows is a summary of the most relevant points, including opinions expressed by Los Angeles Times and our own thoughts. Here is a link to the official document if you would like to study the long and detailed report.

  • We currently have two official approaches towards regulating marijuana in California. These are (a) the Medical Cannabis Regulation and Safety Act of 2015, and (b) Proposition 64 of 2016 for Legalized Nonmedical Cannabis.
  • The State Legislative Analyst’s Office is urging cash flow restraint. While it agrees with Gov. Jerry Brown, it believes there is ‘significant uncertainty regarding the resource needs for departments to regulate and tax medical and nonmedical cannabis.’
  • Its two main concerns are whether the Trump Administration will clamp down on the industry as it legally may do, and how many marijuana businesses will emerge, register, and contribute to their administrative cost by paying taxes. The Catch 22 is that merging the two systems will delay this benefit.
  • According to Los Angeles Times, “the State Board of Equalization estimates there will be 1,700 dispensaries and retailers paying taxes, while the Department of Consumer Affairs, which will oversee the businesses, expects 6,000 pot shops, based on experience in Colorado.’
  • In the light of this, the California Legislative Analyst’s Office reticence to support borrowing large sums of money becomes understandable. At this stage, we do not even know whether a method to license and tax sales will be in position on January 1, 2018, per proposition 64.

Preparing to apply for state medical marijuana licenses in 2018

Governor Jerry Brown signed the Medical Marijuana Regulation and Safety Act (MCRSA) into law on October 9, 2015. Composed of three separate bills—AB 266AB 243 and SB 643—MCRSA establishes a framework for future medical marijuana regulations and a statewide licensing program for growing, manufacturing, transportation, distribution, testing, and retail dispensing of medical marijuana.

Existing businesses who demonstrate current compliance with their local jurisdictions will be allowed to continue to operate during license application review, likely in 2018.

Medical marijuana business license types

Grower/Cultivator: this license is for entities that wish to grow medical marijuana plants from seed or clone to flower and finish. Growers wishing to provide clones, but who do not intend to flower or finish plants, may apply for a specialty nursery license.

To apply to grow cannabis in California, you will need to select a license based on your grow size and lighting source:

  • Tier 1: Specialty
    • License 1: Specialty Outdoor. Up to 5,000 sq ft of canopy OR up to 50 mature plants on noncontiguous plots.
    • License 1A: Specialty Indoor. Up to 5,000 sq ft using exclusively artificial lighting.
    • License 1B: Specialty Mixed-Light. Up to 5,000 sq ft using a combination of natural and supplemental artificial lighting.
  • Tier 2: Small
    • License 2: Small Outdoor. Between 5,001 and 10,000 sq ft of canopy.
    • License 2A: Small Indoor. Between 5,001 and 10,000 sq ft of canopy using exclusively artificial lighting.
    • License 2B: Small Mixed-Light. Between 5,001 and 10,000 sq ft of canopy using a combination of natural and supplemental artificial lighting.
  • Tier 3: These licenses are limited in their access to vertical integration.
    • License 3: Outdoor. Between 10,001 sq ft to one acre of canopy.
    • License 3A: Indoor. Between 10,001 sq ft to one acre of canopy using exclusively artificial lighting.
    • License 3B: Mixed Light. Between 10,001 sq ft to one acre of canopy using a combination of natural and supplemental artificial lighting.
  • License 4: Nursery.

Processor: this license allows business entities to process raw medical marijuana plant matter into a variety of medicinal products.

  • Processor licenses are sub-divided into two categories based on the types of solvent being used.
    • License 6: Manufacturer 1. Not using volatile solvents.
      • Legislators have stated License 6 was not intended for use by edibles manufacturers. This may be subject to cleanup language.
    • License 7: Manufacturer 2. Using volatile solvents.

Additional cannabis license types currently allowed under California law include:

  • Tester: laboratories intending to test medical marijuana products for quality and potency will be required to apply for a tester license
    • License 8
  • Dispensing: businesses that intend to retail medical cannabis to qualifying patients will require a dispensing license
    • License 10: one retail location
    • License 10A: up to three retail locations and the potential for full vertical integration
  • Distributor: MMRSA requires that—while business agreements can be made directly between any licensed entities—a third-party distributor be responsible for overseeing and officially conducting any business transaction that occurs. Distributors are required track all products received, and to have them tested for quality.
    • License 11. All distributors must also apply for a Transporter License (12).
    • From the legislative perspective, the inclusion of the “distributor” model was a necessary compromise to address the trust deficit with people who do not believe the cannabis industry is effectively and consistently self-regulating.
  • Transporter: business intending to transport medical marijuana from one licensed facility to another.
    • License 12

Available now from Green Rush Consulting

MMRSA emphasizes the need for medical cannabis business entities to operate in absolute compliance with all local jurisdiction laws, regulations, and standards:

“If your business is “in compliance with local zoning ordinances and other state and local requirements on or before January 1, 2018,” it may continue to operate until licenses are established.”

How we can Help with your Cannabis or Marijuana Business:

  • Incorporation:  Miller and Associates can create an LLC, or C Corp or S Corp for your business to help you be in compliance with the law.
  • Business Plan: Miller and Associates will work with you to prepare your business plan. This crucial document explains your vision and your niche, and establishes consistent values and language that shapes your enterprise. It also prepares you to seek investment, and explain your business and growth goals to local and State regulators.
  • Compliance: Our law firm can help ensure that your vision for your company is state compliant, and in-line with the goals of the State of California. We will constantly update you on the rapidly changing status of legislation and regulations in the state and your local city of operation.
  • General Consulting: Miller and Associates can help you navigate the local-level zoning and regulatory politics that can prove detrimental to your business endeavor. Let ius educate you on the latest laws, policies and standards that pertain to your desired business location, and handle the legal applications, security plan, background check, and submitting all insurance and personal requirements for you.
  • Standard Operating Procedures: Our marijuana business law firm can provide you with custom SOPs designed to efficiently meet your company’s specific needs.
  • Security Plan: Our Cannabis Lawyers can evaluate your security plan, or create one tailored to your facility. Either way, we will make sure that your company is at all times safe, secure, and operating in full compliance.

If you are wondering how to open a dispensary in California, or how to get started legally growing medical marijuana in California, contact us today. Our goal is to give you the tools you need to understand California medical marijuana dispensary laws and the other laws affecting medical marijuana growers, processors, or retailers.

Summary of California marijuana laws

Several different pieces of MMRSA seem designed to limit big business:

  • Legislated caps on the biggest cultivation licenses
  • Limitations to holding multiple license categories
  • Sunset clause on vertical integration – in 2026, unless this clause is renewed, businesses will no longer be allowed to hold dispensary, manufacturing, and cultivation licenses at the same time

The three bills that comprise MMRSA are only the beginning, and detailed forecasting of California’s cannabis industry is premature. That being said, the legislators who authored MMRSA have consistently indicated that they want to establish a compromise between critical stakeholders: the existing cannabis industry, law enforcement, local jurisdictions, and the public.

Key areas of focus in MMRSA are local jurisdiction and environmental responsibility. Existing and future cannabis businesses can start working now to establish a strong foundation in these areas in preparation for the state licensing process.

California Health and Safety Code 11362.775 states that medical marijuana patients and primary caregivers may “associate within the State of California in order collectively or cooperatively to cultivate marijuana for medical purposes”.

This provision doesn’t give these facilities complete freedom to do as they wish.  In fact, collectives and cooperatives must adhere to strict guidelines in order to comply with state legislation.  These requirements include:

1) File articles of incorporation under the Corporations or Food and Agricultural Code

Collectives and cooperatives are not designed to make a profit but instead are supposed to be set up as “non-profits” to benefit their members. Despite the fact that people are quick to cash in on what is being called as the “green rush”, California law specifically states that there is nothing in Prop. 215 or the MMP to “authorize any individual or group to cultivate or distribute marijuana for profit”.9

2) Obtain the proper forms

Medical marijuana transactions are subject to sales tax, which means that collectives and cooperatives must obtain a Seller’s Permit (information about which may be found on the California State Board of Equalization’s website).  Depending on the city/county in which you plan on opening the facility…you may additionally be required to obtain a business license and/or a zoning permit.

3) Regulate your membership

In order to comply with state regulations, you will want to prove that you are not distributing marijuana for anything other than medical purposes.  In order to do this, you should

  1. a) Have an application process – have new patients or primary caregivers complete a written application that provides his/her recommending physician’s name and contact information.
  2. b) Verify that the patient or caregiver has a valid California medical marijuana identification card or…in cases where they do not…personally contact the recommending physician and verify his/her license status.
  3. c) Keep copies of all I.D. cards and physician referrals.  And,
  4. d) Require the members of your collective or cooperative to sign a contract agreeing not to distribute or use marijuana for anything other than medicinal purposes.  And if you discover that members are not abiding by their contracts, revoke their membership.

4) Only buy/sell marijuana from members

California medical marijuana collectives and cooperatives are not permitted to purchase marijuana from (or sell it to) non-members.  Keep in mind that the only type of legally grown marijuana is that grown by a qualified patient or his/her primary caregiver. Dispensaries are simply supposed to provide a means for facilitating and coordinating lawful marijuana transactions between members.

This means that you should record the source of all incoming and outgoing marijuana for purposes of a state audit.

5) Be mindful of your sales prices

When it comes to distributing your marijuana, you may only:

  1. a) provide it free to members,
  2. b) distribute it in exchange for services that members provide to the collective or co-op,
  3. c) charge fees that are reasonably calculated to cover only your overhead and operating expenses, or
  4. d) any combination of the above.

These rules are to ensure that you comply with your status as a “non-profit”.

6) Keep track of your marijuana

California law establishes strict guidelines under the Medical Marijuana Program “MMP” Act for how much medical marijuana a patient or caregiver may grow, possess or distribute…8oz of dried marijuana, 6 mature marijuana plants or 12 immature plants.  If a person is a caregiver to more than one patient, he/she may grow, possess or transport those amounts for each patient.

Similarly, a co-op or collective may grow, possess or distribute those amounts for each member.  For example, a co-op that has 10 members may carry ten times the amount authorized for one person.  However, many local ordinances prohibit growing or possessing more than 99 plants, regardless of how many patients/caregivers the collective has.

Because of this, it is very important to document exactly how many members you have, as well as how much marijuana you have at any given time.  Engaging in any marijuana-related activities with more than the legal amounts will increase your potential criminal liability.

7) Establish security practices

This isn’t a law, although a security plan must be shown as part of the application for both city licenses and your state cannabis license. Neighborhood complaints are the number one cause of police raids.  As a result, you will want to make sure that your establishment is as “neighborhood friendly” as possible.

This includes (but is not limited to):

  • having a pleasant storefront with no “offensive” signs or symbols to attract law enforcement or neighborhood protest,
  • operating a well-run, clean and professional store,
  • hiring security to ensure that patients are safe and that the surrounding homes or businesses are not negatively impacted by loitering or other criminal activities,
  • establishing and following cash-handling practices…both for in-store sales as well as with respect to bank runs…to prevent robberies or other security violations, and
  • forming and maintaining positive relationships with local police departments, governments and elected officials.

3.2. Regarding non-collective / non-cooperative dispensaries

Medical marijuana dispensaries that do not operate as a collective or cooperative are actually illegal.  Owners of these “for profit” shops may be prosecuted…even if some of their customers are actually qualified patients and/or primary caregivers.

Law enforcement officers/agencies will look for signs that the dispensary isn’t in compliance with local laws by investigating operating practices such as

  • merely requiring patients to designate the dispensary owner as their primary caregiver,
  • carrying excessive amounts of marijuana…or supplying other illegal drugs,
  • possessing excessive amounts of cash,
  • purchasing from or selling to non-members, including ones outside of California, and/or
  • failing to obtain an appropriate business license or pay the requisite sales taxes.

It bears repeating that the only legal authority for operating a California medical marijuana dispensary lies in Senate Bill 420.  If you operate outside of these parameters…for example, by running a “for profit” business…you are violating California’s marijuana laws regarding

  • possessing marijuana,
  • possessing marijuana for sale,
  • selling marijuana, and perhaps
  • cultivating marijuana,

just to name a few.

3.3. The importance of knowing local rules and regulations

California law sets the minimum requirements for opening and operating medical marijuana dispensaries overall as a condition of the license. The local law establishes additional regulations as it deems fit.  Cities and counties regulate issues such as

  • how many marijuana dispensaries may operate at any given time,
  • how many marijuana collectives or cooperatives may operate within a certain radius,
  • whether to even issue new licenses (for example, Los Angeles, Riverside, San Bernardino and Orange County are among some of the counties that have put a hold on issuing licenses to medical marijuana dispensaries, although individual cities are free to regulate on their own),
  • what hours they are allowed to operate,
  • whether patients are allowed to consume or ingest marijuana on the premises,
  • how much marijuana a dispensary is allowed to carry,
  • where they are allowed to operate (for example, California law says marijuana dispensaries may not be located within 600 feet of a school- and local ordinances may tighten that requirement), and
  • what type of security a collective or co-op must utilize.

What marijuana/cannabis businesses can you start in California? For a list of specific regulations, you can review the website for the city you intend to operate on or find the not up to date list provided by Safe Access Now that is organized city-by-city as a start for your research.

We can also be hired to research issues related to your new business.  Contact our marijuana cannabis license attorney Robert Miller to discuss your needs in the industry.




New Marijuana Taxes in California for 2018

California Marijuana Licenses Cannabis Licenses

New Marijuana Taxes in California for 2018

As Orange County Marijuana Licensing Attorneys, we get asked about the New Marijuana Taxes in California for 2018 on marijuana products for those purchasing.  As the LA Times noted in a recent story, unfortunately, those are going to be high (no pun intended).

When do the new Marijuana Taxes start?

Beginning January 1, 2018, all harvested cannabis is subject to a cultivation tax and both cannabis and cannabis products are subject to a cannabis excise tax.

If you are running, or starting, a cannabis business, it is important you are aware of the new tax rates, how these taxes apply to your business activities, and your registration requirements.

Cultivation: What are the cultivation tax rates and who pays the tax in CA?

The current cultivation tax rates under the New Marijuana Taxes in California for 2018 are:

• $9.25 per dry-weight ounce of cannabis flowers, and
• $2.75 per dry-weight ounce of cannabis leaves.

Additional categories and rates may be specified at a later date in regulations and will be posted on the state’s website.

The cultivation tax applies to all harvested cannabis that enters the commercial market. Cultivators are responsible for paying the cultivation tax to the distributor or to the manufacturer if the first transfer or sale of unprocessed cannabis is to a manufacturer. Manufacturers who collect the cultivation tax are required to pay the tax to the distributor. The distributor reports and pays the cultivation tax to the California Department of Tax and Fee Administration (CDTFA).

What is the cannabis excise tax rate and who pays the tax?

The cannabis excise tax is imposed upon purchasers of all cannabis and cannabis products at a rate of 15 percent of the average market price when purchased at retail. Retailers are responsible for collecting the cannabis excise tax from purchasers at the time of the retail sale and for paying the tax to the distributor. The distributor reports and pays the cannabis excise tax to the CDTFA.

How is the “average market price” determined?

  • When the sale to the retailer is an arm’s length transaction, meaning the consideration received reflects the fair market value between two parties under no requirement to participate in the transaction, the average market price is the wholesale cost of the cannabis or cannabis products sold or transferred to the retailer, plus a mark-up predetermined by the CDTFA (see heading below).
  • The wholesale cost is the amount paid by the retailer for the cannabis or cannabis products, including transportation charges and adding back in any discounts or trade allowances. In an arm’s length transaction, the excise tax is not based on the retailer’s gross receipts.
  • When the sale or transaction is not at arm’s length, the average market price is the cannabis retailer’s gross receipts from the retail sale of the cannabis or cannabis products.

What is the mark-up rate on marijuana wholesale cost?

The current mark-up rate as set by the CDTFA is 60 percent for all cannabis and cannabis products. CDTFA is required to determine the mark-up rate every six months. The rate will be posted on the State of California’s tax licensing website.

How does the distributor report and pay cultivation and cannabis excise taxes to the CDTFA?

  • Distributors must register with the CDTFA for a cannabis tax permit to report and pay the cultivation tax and cannabis excise tax to the CDTFA.
  • A microbusiness licensee is licensed to act as a distributor, among other things, and must comply with all the same requirements as a distributor.

How does marijuana sales tax apply?

  • Sales and use tax applies to retail sales of cannabis and cannabis products, but does not apply to sales of medicinal cannabis and cannabis products where a purchaser provides his/her Medical Marijuana Identification Card issued by the California Department of Public Health and a valid government identification card.
  • Gross receipts from the sale of cannabis and cannabis products for purposes of sales and use tax include the excise tax.
  • Cannabis retailers, cultivators, manufacturers, and distributors making sales must register with the CDTFA for a seller’s permit to report and pay any sales and use tax due to the CDTFA. If you already have a seller’s permit that was issued by the Board of Equalization (BOE), it is not necessary to re-register for a seller’s permit with the CDTFA.
  • It is important that you timely obtain a valid resale certificate that is accepted in good faith from the purchaser if you make sales for resale.
  • Current sales and use tax rates can be found on the state of California’s cannabis website.

When may I register my cannabis business?

Beginning November 20, 2017, you can register for all the proper tax permits for your cannabis business on the state’s official taxation website. From the CDTFA homepage, click the Register link, and follow the prompt. When registering your business activity, make sure to select box number 3, Cannabis business activities.

Where can I get more information about registering a marijuana dispensary or other cannabis business?

The information provided here about New Marijuana Taxes in California for 2018 is general. The tax law can be complicated and there are very specific requirements for the cannabis industry. The State has a Tax Guide for Cannabis Businesses with helpful information on a variety of topics including: registration, invoicing requirements, tax exemptions, record keeping, calculation of the tax due with examples, and other important resources.

Get more information on New Marijuana Taxes in California for 2018

Our Cannabis Business Licensing Lawyers are available to help you if you  have questions.  But the State of California also has some resources to help you, and your new business.  Contact us.

If you have additional questions, you may also call the California Service Center at 1-800-400-7115 (TTY:711) Monday through Friday8:00 a.m. to 5:00 p.m. (Pacific time), except state holidays.

For additional information about the proposed regulations, or to subscribe to email alerts to hear about updates as they become available, please visit the State of California’s licensing website – http://www.bcc.ca.gov/.

For information on all three licensing authorities, please visit the state’s cannabis web portal – cannabis.ca.gov.

How to get an Orange County cannabis cultivation license.

Orange County Cannabis Lawyer

How to get an Orange County cannabis cultivation license.

As an Orange County cannabis licensing attorney, we often get asked what is needed to get a State of California cannabis cultivation license.

The State of California anticipates that they will begin issuing state cannabis cultivation licenses in California as of January 1, 2018.

While they are completing the final regulations, there are some steps you can work on now to prepare for your licensing application.

Whether you plan to commercially grow medicinal and/or adult-use (recreational) cannabis in California, here’s a checklist of documents you may need to complete your application.

  • Although not required, a permit from your city or county (or other jurisdiction) will streamline the application process.
  • Right to occupy property: Your lease agreement, property title, or deed n Business formation documents filed by the California Secretary of State’s office n California State Water Resources Control Board permits and verification of your water source, including: well logs, Notice of Applicability, or a Waste Discharge Requirement (WDR) waiver.
  • California Department of Fish and Wildlife’s 1602 permit or a waiver
  • California Department of Toxic Substance’s hazardous materials record search via their EnviroStor data management system
  • California Department of Fee and Tax Administration’s seller’s permit
  • Labor agreement if you’ll have more than 20 employees
  • Surety bond valued at $5,000
  • California Department of Justice fingerprinting via its Live Scan service

City and County Jurisdictions for Cannabis Licenses

Each city and county has different protocols. Depending on where you want to commercially grow cannabis in California, you might need to contact one or more of the following agencies, in the city where you want to operate, to get the necessary local permits:

  • Building Department
  • Environmental Health Department
  • Office of the County Agricultural Commissioner
  • Office of the Sheriff or Police Chief
  • Planning Department
  • Public Works Department Resources

Cannabis License Resources for California

• CalCannabis Cultivation Licensing, a division of the California Department of Food and Agriculture 1-833-CALGROW (225-4769) calcannabis@cdfa.ca.gov calcannabis.cdfa.ca.gov

• California Cannabis Portal cannabis.ca.gov

• California Department of Fee and Tax Administration 800-400-5448 efile.boe.ca.gov/ereg/index.boe

• California Department of Fish and Wildlife wildlife.ca.gov/conservation/Cannabis

• California Department of Justice Live Scan Fingerprinting Locations oag.ca.gov/fingerprints/locations

• California Department of Toxic Substances Control EnviroStor 877-786-9427 envirostor.disc.ca.gov/public

• California Secretary of State 916-657-5448 sos.ca.gov/business-programs

• Labor Agreements Contact any major union to help you with your labor peace agreement.

• State and Regional Water Control Boards 916-319-9427 waterboards.ca.gov

Contact us if you would like us to prepare and file the cannabis license for you.  For more information, please visit the following sites, which usually have updated information:

Long Beach Marijuana License Attorney

Long Beach Marijuana License Attorney

Long Beach has, or had, 32 licenses available for operation in the city.  They released them in stages, with the last 10 being released and assigned last week, on September 28th, 2017. The city had a lottery to assign the last 10, but they still have to await final approval.
Long Beach requires inspections of any proposed location from the following City agencies which will inspect proposed marijuana business locations:
  • Development Services: Building and Safety Division
  • Development Services: Planning Bureau
  • Environmental Health
  • Fire Department
Long Beach Permit requirements are here:  http://www.lbds.info/civica/filebank/blobdload.asp?BlobID=6361.
You will note that many of the requirements mention building codes, and if you are not doing construction of a new building, or remodel of an existing building that requires city construction permits, you will still need to make sure you are in compliance with all existing city codes.

City of Long Beach Marijuana Taxes

On November 8, 2016, Measure MA, “Long Beach Marijuana Taxation”, passed by the vote of the citizens of Long Beach. That new law sets the tax rates to:
  • six to eight percent (6-8%) of gross receipts for medical marijuana dispensaries; 
  • eight to twelve (8-12%) of gross receipts for non-medical (i.e., recreational) marijuana dispensaries; 
  • six to eight (6-8%) of gross receipts for processing, distributing, transporting, or testing marijuana and marijuana-related products; and 
  • twelve to fifteen ($12-15) per square foot for marijuana cultivation. 

Taxes set by Measure MA could be increased or decreased within the established ranges by the City Council, provided the maximum rates listed above are not exceeded.

Specific Dispensary Rules in the City of Long Beach

Note that you are not allowed to smoke or consume marijuana inside any dispensary.
You also cannot deliver marijuana unless it’s sealed and labeled, and there are signage requirements for the business (see link above).

City of Long Beach Marijuana License Application Fees

There is a minimum tax of $1,000.  Application fees are:
  • Application Fees range from $200.45 for one owner, up to $925.45 for six owners.
  • Zoning Review Fee $33.00 
  • Development Services Review Fee $22.45 
  • ADA State Mandated Fee $1.00 
  • LBPD Background Investigation Fee $145.00 for each owner and business manager
(See the application at http://www.longbeach.gov/globalassets/finance/media-library/documents/business-info/business-licenses/marijuana-applications/medical-marijuana-application).  Note that they want photos and dimensions of the location, specific licenses, and information on each owner.
There are currently no delivery licenses, or dispensary licenses, available after the lottery last week.  If more open up, the application instructions are at  http://www.longbeach.gov/globalassets/finance/media-library/documents/business-info/business-licenses/marijuana-applications/medical-marijuana-application-guidelines_final/
Long Beach also has a “buffer zone”, where you must show you are more than 1,000 feet from any other dispensary, and not near public schools, beaches, or parks.  A description of last week’s lottery and a map showing existing dispensaries are here:  http://www.thecannifornian.com/cannabis-news/southern-california/long-beach-uses-lottery-system-hand-limited-medical-marijuana-licenses/
Background check requirements, requirements of the owner of the property where the business is located (in your case landlord), and a description of the point system used by Long Beach for marijuana licensing is here:  http://www.longbeach.gov/globalassets/finance/media-library/documents/business-info/business-licenses/marijuana-applications/medical-marijuana-faq-s
You will also need a general business license in Long Beach, which is required for the marijuana application.  That license application form is here:  http://www.longbeach.gov/globalassets/finance/media-library/documents/business-info/business-licenses/marijuana-applications/new-medical-marijuana-business-application_final/
There is no current deadline or limit for distribution facilities, although they do have to go through the licensing process as any other business would have to, and are subject to the buffer zones and must provide an operating plan and other information.

Long Beach Marijuana Cannabis Licenses Still Available

How many non-dispensary medical marijuana businesses are allowed in the City of Long Beach (cultivation, distribution, manufacturing, testing)?

Currently, there is no limit to the number of non-dispensary medical marijuana licenses that can be issued.
As of the writing of this article, there is only one distribution license application pending in Long Beach.

Does my landlord have to give permission or agree to my marijuana license?

Yes.  Long Beach has their own form for landlord permission. Applicants who do not own the proposed business property must submit the Property Owner Authorization Form.​

​So, if you rent or lease your location, you will need your landlord to certify permission to operate.  See


Contact us for any questions about obtaining a marijuana dispensary license, or other cannabis business license.  As a top Long Beach Marijuana License Attorney, we can help you today.

Cannabis Business Resources: Health Benefits of Marijuana

Cannabis Business Resources: Health Benefits of Marijuana

Marijuana Hemp Cannabis License Health Benefits

For your California Cannabis License, or your Orange County Marijuana Dispensary, the following list of Cannabis Business Resources: Health Benefits of Marijuana, with studies discussing the benefits of Cannabis are as follows:

United States Marijuana Patent:  Cannabinoids as antioxidants and neuroprotectants http://www.google.com/patents/US6630507

Cannabis and Skin Cancer


Cannabis Cures Lung Cancer


Cannabis kills Tumor cells


Cannabis Cures Colorectal Cancer


Cannabis Cures Uterine, Testicular, and Pancreatic Cancers


Cannabis-derived substances in cancer therapy and anti-tumor properties.


Cannabis Cures Brain Cancer


Cannabis Cures Mouth and Throat Cancer


Cannabis Cures Breast Cancer


Cannabis Cures Prostate Cancer


Cannabis Cures Blood Cancer


Cannabis Cures Liver Cancer


Cannabis Cures Cancer in General


Cannabis kills cancer cells


Cannabis Treatment in Leukemia


Cannabinoids and the immune system


Cannabis Induces apoptosis of uterine cervix cancer cells


Cannabis treatment in lymphoma


Cannabis treatment of Melanoma


Cannabis treatment for Thyroid Carcinoma


Cannabis treatment in Colon Cancer


Cannabinoids in intestinal inflammation and cancer


Cannabinoids in health and disease


Cannabis a neuroprotective after brain injury


Cannabis inhibits Cancer Cell Invasion


Cannabis partially/fully induced cell death in Cancer


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If you’re interested in starting a business growing, selling, transporting or testing marijuana, then contact us.  We can help you as a cannabis licensing attorney in Orange County.

How profitable is a marijuana dispensary in California?

How profitable is a marijuana dispensary in California?

Cannabis Dispensary License

In order to calculate how much, on average, a medical marijuana dispensary can earn, you would have to look at the financial records. That depends on how many operating dispensaries there are in any particular area, city, or county, in California, and how much each dispensary earns, on average.

How many dispensaries are there in California?

Through June 30, 2016, 1,023 publicly disclosed medical cannabis sellers registered with the Board of Equalization (BOE) filed returns and remitted sales and use tax to the BOE. There certainly were more than that operating without filing taxes or registering themselves.

How much in sales taxes does the BOE collect from medical marijuana businesses?

Through June 30, 2016, $575,021,347 taxable sales of marijuana were reported to the BOE, and $50,507,006 was remitted in sales and use tax.

Calculation of marijuana sales and profit

That means that each marijuana dispensary license brought in an average of $562,093.  Net profit would be lower, including staff salary and product and building or rent costs.

After taxes, the profit to each dispensary would be $512,722.  Still a healthy profit for a retail business of any kind.

Future prospects of Marijuana and Cannabis Product Sales

As there is more competition in the market, more dispensaries should each take in less, if the demand remains the same.  However, there are substantially more retail customers for marijuana than just the previous medical marijuana patients.  That, plus new products, including edibles, means substantial upside on the demand part of the equation.

Cannabis cultivation licenses, laboratory testing licenses, and the CBD/THC infused products/concentrates sectors are particularly lucrative, with 29% of wholesale growers and 27% of infused companies saying that they are “very profitable.

For retail operations, the cannabis dispensary business makes more money than average for retail businesses.  According to the 2016 Marijuana Factbook, a store that sells either medical or recreational cannabis or marijuana of any type earns on average $974 per square foot in revenue, topping Whole Foods, whose 431 stores earn an average of $930 per square foot.

So how profitable is a marijuana dispensary in California? Cannabis sales are expected to skyrocket to nearly $23 billion in 2020, nearly triple from this year, according to ArcView Market Research and New Frontier, a data analytics company that focuses on the industry.

Given that, a tripling of net profits from current amounts could mean that each dispensary in California could be making over one billion dollars per year, making it a very profitable retail business indeed.

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Can you get a cannabis license with a criminal record

Can you get a cannabis license with a criminal record?

Can you get a cannabis license with a criminal record

If you are interested in applying for a license to start a business in California’s new cannabis or marijuana industry, you may worry that a criminal past might hurt you from being approved for any of the following California cannabis licenses:

  • Mobile cannabis or marijuana business;
  • Marijuana dispensary;
  • Cannabis testing lab; 
  • Marijuana growing operation; or
  • Cannabis wholesale distribution.

The State of California must approve all cannabis licenses in Calfornia, and California requires that you pass a criminal background check before you can be granted a license.

What does the State of California state regarding what types of crimes may disqualify you for a CA Cannabis License?

The State of California only addresses this in a question and answer by stating, in question and answer format:

Q. If I have a criminal background will I be denied approval for a license?

A. According to the Act, the Bureau may deny a license to an applicant who has been convicted of an offense that is substantially related to the qualifications, functions, or duties of the business or profession for which the application is made.

What crimes are “substantially related” to the cannabis application?

The State doesn’t answer that question directly.  But for cannabis licenses, the State has an interest in two types of crimes – those that show 1. An inability to follow rules, or being unfit for the business; and 2. An avoidance of taxes or an inability to follow the rules.

1. An inability to follow rules, or being unfit for the business.

The inability to follow rules doesn’t just refer to selling marijuana during the time period that it was illegal in California.  The State of California usually, for many types of professional licenses, wants to protect consumers.  That means that they look especially seriously at “crimes of moral turpitude”.  A crime of moral turpitude, from the point of view of the state, means that you might be more likely to be dishonest. Those crimes may include the following types of convictions:

  • Convictions for fraud;
  • Convictions for theft of all types (shoplifting, burglary, embezzlement from an employer, robbery, or theft from customers)
  • Convictions for the types of crimes that are serious enough to be “shocking” to the reasonable person, such as the following: murder, voluntary manslaughter, kidnapping, robbery, and aggravated assault.

2. An avoidance of taxes or an inability to follow the rules

The State of California is highly interested in not only regulating this new industry but also in the tax income it is expected to bring.  As a result, any indication that you are behind on filing taxes or paying taxes, or any efforts to avoid taxation, are looked at as especially seriously by California’s license issuing authorities.

Can you get a cannabis license with a DUI?

A DUI is not a crime of moral turpitude like the above and does not involve taxes due to California.

As a result, a single DUI is unlikely to prevent someone from becoming licensed for Cannabis business purposes in California.  DUI is the number one crime in California, and so it is very common, and many applicants will have a DUI on their record.

More than one DUI, however, could indicate an alcohol or drug problem (especially if it was a Drug DUI or DUID), which for other types of licenses the state has looked especially closely at.  That doesn’t mean that the license may not be approved, but there may be a probationary period or a requirement that counseling or a program be completed.

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If you are interested in having an attorney handle your cannabis license in California, then contact our firm today.  We can help.

Avoiding monopolies with California cannabis licenses

Avoiding monopolies with California cannabis licenses

Marijuana Hemp Cannabis License Health Benefits

The current issue (September 2017), of GQ magazine, has an interesting article on the legal structure and secrecy of big companies that are getting into the cannabis business.  As you may know, the State of California is about to issue cannabis licenses in California for those that want to become marijuana growers, retailers, wholesalers, lab testing facilities, and mobile delivery services for marijuana. The State of California currently does not allow certain licenses to be held if you already have a cannabis license.  That is, according to the appropriate departments in the State, to prevent vertical integration, under the fear that large tobacco companies can come in and control the growing, wholesaling, and retail distribution of marijuana, as they did with tobacco.

The State of California currently does not allow certain licenses to be held if you already have an existing cannabis license.  That is, according to our Orange County DUI lawyer, to prevent vertical integration, under the fear that large tobacco companies can come in and control the growing, wholesaling, and retail distribution of marijuana, as they did with tobacco.

The GQ article mentions one company, BioTech Institute, as follows, as one company that has been aggressive in applying for (and paying for) patents on specific strains of marijuana:

If the rest of its patents get approved, and they hold up legally, BioTech Institute might have a near-monopoly over crucial intellectual property for a commodity whose soothing, mind-altering effects make it more valuable than wheat. Unless the hustlers in the rest of the cannabis industry take a break from shoving one another aside to work together against the patents, BioTech Institute could have the market cornered in a few years. The company could control access to a plant that has been shown to reduce tremors in Parkinson’s patients, to help veterans stop dreaming in flashbacks, to relieve the nausea of anyone undergoing chemotherapy. They could charge whatever they wanted.

One cannabis business lawyer,  Gary Hiller, has been helping investors as the lawyer who runs Phytecs and BioTech Institute, according to the article.

California Lt. Gov. Gavin Newsom, a big supporter of the legalization measure, stated that:

“We have got to protect the small cultivators as well as entrepreneurs who don’t have access to millions of dollars.”

To that end, the Adult Use of Marijuana Act – as the California initiative is called – includes language meant to protect the industry “against monopolistic practices” for five years, noted Newsom, the highest-ranking state politician to support legalization measures.

For example, any adult-use cultivation business that operates an outdoor facility larger than one acre or an indoor building that exceeds 22,000 square feet would be prohibited from getting a license until January 2023. All legal rec growers prior to that date would have to fall within those limits.

Under the proposed law, state licensing authorities also would be required to consider whether issuing a particular applicant a permit might stifle competition or create a monopoly.

Newsom stressed the need to ensure minorities have a place in the cannabis industry, and he also said existing medical marijuana businesses that have proven they can operate responsibly will have a leg up in obtaining a recreational license

“For those who have been good actors in the state of California, you’re going to be prioritized,” he said.

Contact us today for questions about your California cannabis license.


Marijuana and California State Law

Marijuana and California State Law

Cannabis Dispensary License

Marijuana and California State Law: A growing number of states are defying the federal marijuana ban, not only by rewriting their own laws, but by actively cooperating with marijuana growing, processing, and use. Many contend that pot should be a state, rather than a federal, concern. California made the sale legal of Marijuana and California State Law reflects that by making a cannabis business license available under state laws for sales to patients and the general public.

There are 17 different types of California marijuana licenses based on the type of business activity involved. The following types of business are permitted under the CA MMRSA law:

  1. Marijuana Cultivators or Growers (Cultivars) with four total acres of growing area,
  2. Marijuana Manufacturers
  3. Marijuana Testing labs
  4. Marijuana Retail dispensaries
  5. Marijuana Distributors and
  6. Marijuana Transporters.

Each of these types of business must acquire its own license as provided in Section 19300.7 of the California Business and Professions Code. For example, a Type 1 license will be allowed for small specialty outdoor operations, whereas a Type 4 license is required for cultivation in a nursery. A Type 6 or 7 license will be required for manufacturers, while a Type 8 license is required for those engaged in testing. Type 10 and Type 10A are for dispensaries. Type 11 is a license for distributors, while transportation businesses must apply for a Type 12 license.

Licensees may usually hold licenses in two separate categories, but only in certain combinations. All cultivators and manufacturers must send their products to a Type 11 licensee in order to obtain quality assurance, and Type 11 licensees must submit marijuana products to Type 9 laboratories.

Federal Law and Marijuana Legality

The U.S. Supreme Court has ruled in Gonzales v. Raich (2005), the court held that under the Constitution, Congress may use its Commerce Power to ban even “window box” medical marijuana, whether permitted under state law or not.

The Commerce Power derives from two constitutional provisions: (1) the Commerce Clause, which grants Congress authority to “regulate Commerce … among the several States,” and (2) the Necessary and Proper Clause, which says Congress may “make all Laws which shall be necessary and proper for carrying into Execution” certain itemized grants—including the Commerce Clause.

In Gonzales, the court found that marijuana growing and use were economic activities. It then followed some 20th-century cases that (contrary to earlier rulings) allowed Congress to use the Constitution’s Necessary and Proper Clause to regulate economic activities with “substantial effects” on interstate commerce. 

Was the court correct? Answering that question requires us to determine what the Constitution meant to those who adopted it. Even though the founders did not discuss marijuana specifically, a vast array of sources tells us their answer. The sources include debates from the Constitution’s framing and ratification, and writings informing us how key constitutional phrases were used in legal documents.

All students of the Constitution know it splits authority between the states and the federal government. What many do not recognize is that it deliberately divides responsibility for some closely-connected activities. For example, the founders often observed that commerce and domestic manufacturing were tightly related. Nevertheless, their Constitution granted power over several forms of commerce to Congress, but left authority over California cannabis manufacturing licenses to the State of California. The founders divided authority this way because protecting liberty was a higher priority than regulatory coordination.

So the Supreme Court is wrong to conclude that because an activity “substantially affects” interstate commerce it follows that Congress may regulate it. Many activities, economic or not, substantially affect commerce without being constitutional targets for Congress.

When the Constitution was adopted, the phrase “regulate commerce” was well-understood. It referred to laws governing mercantile trade and certain associated matters, such as tariff barriers, commercial finance, navigation, and marine insurance. It did not include other aspects of the economy. In fact, many of the founders are on record as specifically assuring the public that Congress would have no jurisdiction over agriculture, manufacturing, land use, or (according to Chief Justice Marshall) “health laws of every description.”

Growing marijuana is, of course, a species of agriculture. Processing is manufacturing. The ban on personal consumption is a health regulation. The Constitution places control over all those activities squarely within the state, not the federal, sphere.


So does Congress have any power over marijuana? Under a correct reading of the Constitution, the answer is, “Only some.” The Commerce Clause allows Congress to restrict or ban the marijuana trade across national and state boundaries. Moreover, the Necessary and Proper Clause recognizes some additional authority.

The background and history of the Necessary and Proper Clause establish that the provision is not a grant of authority to Congress, but merely a rule of interpretation. The Clause does, however, acknowledge Congress’s prerogative to pass certain laws “incidental” to regulating commerce. For example, if Congress prohibits interstate trade in marijuana, it might also require interstate shippers to disclose whether their cargoes included the substance—but only if disclosure is reasonably necessary to enforce the congressional ban.

However, incidental powers do not extend to comprehensive regulation of areas, such as agriculture or manufacturing, reserved to the states.

In sum: Under the original Constitution, as ratified by the American people, Congress may regulate, or even ban, marijuana from interstate and foreign commerce. It also may exercise some incidental authority. But it may not constitutionally regulate or prohibit in-state growing, processing, or use of marijuana. For better or worse, those are exclusive concerns of the citizens of the several states.

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Were marijuana laws racially discriminatory?

Were marijuana laws racially discriminatory?

DUI Under the Influence of Marijuana

As NORML marijuana lawyers in California, we had notification of one of our colleagues making an argument today (July 18th, 2017), in court in Connecticut that was interesting.

Aaron Romano says many state laws criminalizing marijuana were based on the federal “Marihuana Tax Act of 1937“, which essentially criminalized marijuana by imposing harsh financial penalties. That is one of the reasons why, under federal law, the legal nature of banking for marijuana dispensaries and other businesses is such a difficult area to deal with for most cannabis businesses.

Mr. Romano argued that the federal law was rooted in racism and bigotry against blacks and Mexicans and therefore was unconstitutional, as are the state bans based on the law including Connecticut’s, where he practices as a marijuana lawyer.

“It was racially motivated and states just adopted it wholesale,” said Romano, a Bloomfield attorney who also is legal counsel for the state chapter of the National Organization for Reform of Marijuana Laws (NORML). “With the growing awareness of cannabis’ health benefits … at this point there is no reason to maintain its illegal status.”

The prosecutor in the case declined to comment, while at least one drug law expert doesn’t believe such an argument would be successful.

Romano made the unusual argument Tuesday in a motion to dismiss marijuana possession and probation violation charges against his client, William Bradley, who was caught with nearly a pound of marijuana in January while on probation for a previous marijuana conviction. He is detained while awaiting trial because he can’t post $150,000 bail.

The article about the case from US News and World Report is an interesting read, and the financial laws regarding banking and marijuana remains in dispute.

If you have questions about the ever changing field of marijuana laws in California, or need an attorney for your marijuana business licenses or cannabis license, contact us today. 

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