Opening A Marijuana Dispensary In California? Here’s A Simple Guide For You!


California led the legalization of medical cannabis in the United States. In 2016, California also joined the ever-growing number of states that have also legalized recreational marijuana. Because of this, more and more people have become interested in entering the cannabis industry. Many entrepreneurs decided to take this business venture and, thus, opened their own California Marijuana Dispensary.

If this is what you are planning to do, then you have come to the right place. Let this short article walk you through the process that you have to follow so that you can set up your own marijuana dispensary.

The Growing Marijuana Market In California

California has been and will always be the largest marijuana market worldwide. Because of this growing industry, you should not be surprised why many entrepreneurs are thinking of opening their own marijuana dispensaries. In fact, this growing market is the reason why California created the Bureau of Cannabis Control. This is for the regulation of commercial cannabis licenses that businesses need for selling marijuana for medical and recreational use.

Understanding The California Laws

Before you can operate as a marijuana dispensary in California, you have to apply for a license. These licenses should be approved at the state and the local level. There are requirements that you need to comply with as per the California Environmental Quality Act. Cannabis is a highly-regulated product.

There are strict regulations when it comes to smoking, purchasing, and selling of cannabis. It is lawful to process, possess, transport, buy, give, and obtain marijuana. However, the person should be at least 21 years old. Unconcentrated cannabis should not be more than 28.5 grams. Also, the amount of concentrated marijuana should not be more than 8 grams.

Getting A License To Sell

As mentioned above, you need to obtain a retail license before you can start your marijuana dispensary. You need to get this from the state in order for you to legally sell cannabis in California. The Bureau of Cannabis Control is the one that issues these retail licenses. There are two types of licenses that you can get – Medicinal Retail (M-License) and Adult-Use Retail (A-License). For retail, California allows two – retail sales for delivery only and retail sales from a dispensary.

Documents Needed For Retail License Application

Now that you know the laws and the licenses that you need to apply for to start your marijuana dispensary, here are the documents that you need to complete and comply for your application:

  • Business structure
  • Social Security Number
  • Or Federal Employer Identification Number
  • Contact person information
  • Sellers permit
  • Declaration of location (not within 600 feet from schools or youth center)
  • Compliance with the California Environmental Quality Act

Important Information Business Owners Need To Provide

Business owners are required to provide their individual profile with the Manufactured Cannabis Licensing System. You need to provide your SSN, date of birth, address, email address, and phone number. Also, you have to declare any criminal convictions. If you own any businesses in the cannabis industry, you should also provide financial interest concerning these assets.

Considerations When Opening A Marijuana Dispensary

You have to remember that opening a marijuana dispensary is not like any other type of business. Yes, marijuana is legal in California, but it is still illegal under federal law, and this can still present some problems. You have three things to consider – banking/funding, tax, and sourcing and distribution restrictions.

  • Banks are federally regulated, and when it comes to cannabis companies, they are reluctant to offer loans and checking accounts. This is why if you are thinking of opening a cannabis business, you need to prepare for it to be an all-cash company.
  • This is another important consideration when opening a cannabis dispensary. This business might not be considered as legal by the federal government, but business owners still have to pay income taxes. The federal income tax will depend on the gross income of your company, which is why this can be higher compared to other businesses.
  • Sourcing And Distribution Restrictions. According to federal law, it is prohibited to transport marijuana across the state lines. So, for most cannabis dispensaries who want to sell their products to clients from other states, they have to ship them to the person’s address. Marijuana businesses are restricted to sales only within California. Also, you can only source your materials and your products within the state alone.

Setting up a marijuana dispensary can be very profitable. This is why many are itching to get into this industry despite the risks that they have to deal with. To prepare yourself, do not stop researching and learning more about this business. There is so much for you to learn because the laws and restrictions concerning the cannabis industry change all the time.

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