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 making medical marijuana legal in California. Before 2016, you could open a medical marijuana dispensary in California by complying with 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 Act which was enacted September 11, 2015. This new law creates a new regulatory scheme that regulates all aspects of medical marijuana production and sale. That law went into effect on January 1, 2016.

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

Both Acts require 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 license types 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 transporter.

Three Licensing Agencies will supervise the sale, cultivation, and manufacturing 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 cultivation of marijuana; and 3) Department of Public Health – issues licenses related to manufacturing and testing of marijuana.

Your new marijuana business, whether it may be a medical marijuana dispensary or a recreational adult use of marijuana retail store will want to get ahead of the competition and research the application process for these new licenses. We expect to see new regulations and a new license application process published at the State of California Department of Consumer Affairs Website. The new sub-agency of the Department of Consumer Affairs that will be issuing retail sale and dispensary licenses is the new Bureau of Marijuana Control. At the time of this writing, this Division of the Department of Consumer Affairs did not have a website or webpages live yet describing the new licensing requirements.