How to Start a Medical Marijuana Business in California

Medical marijuana stores or medical cannabis dispensaries are nothing new in California. They have been around since the law was passed in 1996 legalizing medical marijuana in California. Before 2016, you could open a medical marijuana dispensary in California by meeting local city and / or county requirements.

But now we have two new licensing laws that regulate the marijuana business in California. First, we have the Medical Cannabis Regulation and Safety Law that was enacted on September 11, 2015. This new law creates a new regulatory scheme that regulates all aspects of the production and sale of medical marijuana. That law went into effect on January 1, 2016.

Next, we have California Proposition 64, which is officially known as the “Marijuana Use by Adults Control, Regulation and Tax Act”, it was voted into law by 64% of Californians in 2016 and it became law on November 9, 2016. The law is also referred to as the “Adult Marijuana Use Act.” This law regulates the production and sale of recreational marijuana in California.

Both laws require the licensing of various parts of the marijuana business with a full licensing scheme to be ready as of January 1, 2018. There are several different types of licenses available under both laws, including licenses related to various parts of a marijuana business, including the following license types: manufacturer, testing, dispensary or retail store, distribution, and carrier.

Three licensing agencies will oversee the sale, cultivation and manufacture of marijuana. These agencies are identified as follows: 1) Department of Consumer Affairs: issues licenses related to retail sales of marijuana; 2) Department of Food and Agriculture: issues licenses related to the cultivation of marijuana; and 3) Department of Public Health: issues licenses related to the manufacture and testing of marijuana.

Your new marijuana business, be it a medical marijuana dispensary or an adult recreational use of retail marijuana store, will want to get ahead of the competition and research the application process for these new licenses. We look forward to seeing new regulations and a new license application process posted on the California State Department of Consumer Affairs website. The new sub-agency of the Department of Consumer Affairs that will issue retail and dispensary licenses is the new Office of Marijuana Control. At the time of writing, this Division of the Department of Consumer Affairs did not yet have an active website or web pages describing the new licensing requirements.