Getting a Dispensary License in California

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The legalization of Cannabis (also known as marijuana in the United States) in certain regions of the world has not only started to shift the way people look at it, but the way it is used for both recreational and medicinal purposes. However, the sale and use of cannabis is a slippery slope when it comes to state laws around cannabis, and getting a dispensary license can be likewise confusing.

Cannabis Laws in California and the United States

While the possession of cannabis is illegal under federal law in the United States, it is now officially legal in the state of California for medicinal as well as recreational use. As the first state in the US to establish a program for the medicinal use of marijuana, California has been at the forefront of the campaign to legalize the use of cannabis beginning in 1972.

In California, it is legal to carry up to one ounce, in addition to being able to grow up to six live plants as an individual, or many live plants with a commercial license. Medicinal use was legalized in the state in 1996, followed by recreational use 20 years later in 2016. The laws for recreational use officially came into effect on January 1st, 2018.

Since federal law still prohibits the possession, cultivation, and distribution of cannabis, it is still illegal to operate a dispensary, even when abiding by all state laws. This means that federal agencies can seize inventories as forfeiture and owners can be issued with fines and even prison time. However, in recent years, federal agencies have become more concerning with illegal operations and have stated that they may not prosecute dispensaries that are operating in accordance with state law.

Obtaining a Dispensary Licence in California

In California, there is a dual-licensing system in place. This means that you would need to obtain a permit from your business’ jurisdiction (county or city) first. Then you may apply to the state for the official license. The processes involved in obtaining permits vary greatly between jurisdictions.

At this stage, most jurisdictions offer permits, while some are still awaiting rules to be put in place and others that have banned the business of cannabis altogether. Thus, it is important to do proper research regarding the rules in your jurisdiction, before making plans to start a cannabis business.

Set-Up Costs

It is safe to say that setting up a legal marijuana dispensary is going to cost a pretty penny. Industry analysts gauge that it may cost between $30,000 and $500,000 to set up your dispensary in California legally. The costs may vary based on the scale of your dispensary as well as its exact location.

When going through the set-up process, costs that you will need to keep in mind include application fees for your permit as well as the license, financial and legal advisory costs, building up the store, equipment you will need to purchase, and the actual cultivation of the marijuana, to name but a few.

There are companies that will provide a full-service set-up for you, from filing all necessary paperwork for your licenses, ensuring all laws are abided by, as well as building the dispensary for you. At the end of the day, you just show up and run the show. However, this option will cost you! Roughly $100,000- $200,000 to be more precise.

Should you wish to go this route, ensure, all laws are adhered to correctly by consulting with a California marijuana attorney first, making sure all the information regarding the company is correct and legal.

Types of Medical Marijuana Dispensaries

  1. Collectives & Cooperatives

According to Health and Safety Code 11362.775 in California, primary caregivers and patients who make use of medical marijuana can form a collective or cooperative to cultivate cannabis plants for medicinal purposes. However, they are bound by very strict rules and regulations in order to abide by state regulation. This type of marijuana business is essentially a ‘non-profit’ and needs to file all the appropriate paperwork, update their membership, regulate prices and stock, as well as the choice of suppliers and members.

  1. Non-Collectives and Non-Cooperatives

These types of dispensaries are in actual fact, illegal since they are operating as a ‘for-profit’ business. Regardless of whether their customers are qualified primary caregivers or patients, they can be prosecuted as they do not abide by state law.

That being said, it is important to know and understand the laws surrounding cannabis in the state of California before attempting to get a license to sell the substance. Set up a meeting with a qualified professional to discuss your business ideas before going ahead with your plans.

It is important to take into consideration any limitations that may be placed on your prospective business venture, such as how much stock can you carry at any given time, how many dispensaries are legally allowed to operate in a given area, hours for operation, location in relation to schools, use of the substance at the location of the dispensary and what type of security is necessary for the business premises.

This is simply a demonstrative list, and official regulations are much more extensive. It is, thus highly important that you consult with a professional before starting any stage of building your cannabis business.

The laws surrounding marijuana are constantly changing on both state and national levels. Since prosecution is possible in any state, it is important that any activity relating to the use, possession, cultivation, production or distribution of cannabis and related products be done so carefully in accordance with the latest laws and regulations.

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