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The new year is upon us and this year is especially important for your cannabis business in California. Starting January 2nd, 2018, the state will begin issuing cannabis licenses to medical and adult use businesses who have received approval from their local government and have submitted a temporary or annual application. As a crash course to obtaining your cannabis business permits and licenses, we have shared seven steps our cannabis consultants follow in assisting our clients with their license applications. Today’s blog topic covers these steps for your cannabis businesses looking so you are prepared.
Step 1 – Prepare Work Plan
Our first step in assisting a cannabis business with their applications is to identify what tasks will be needed for their specific license(s). You may already have some of these items in place, including a clear direction for your business, formed entity, available capital, acquired property, and existing operations. If you are at the beginning stages, we suggest spending time defining your goals, developing a vision for how you will operate, and finding a property in a city or county allowing a cannabis business to operate.
Step 2 – Prepare Site and Facilities Plans
The second step we complete for your cannabis business is to prepare schematic site and facilities plans illustrating how they will set up and operate on their property. We typically start with a property survey and collect precision measurements along with recorded observations about any land use, environmental, and building constraints. Our cannabis consultants then develop conceptual plans coinciding with client discussion to make sure we describe their operations in detail. Once the concept is complete, we prepare graphics to include in application packages and business plans.
Step 3 – Prepare Business and Operations Plan
Every cannabis business application needs a solid business and operations plan that describes how it will operate to regulators. A cannabis business plan needs to be very detailed and cover a variety of topics. The business and operations plan template our cannabis consultants use contains 16 sections, as follows:
- Company Overview
- Company Structure and Legal Ownership
- Regulatory Framework
- Business Premises
- Operations Plan
- Standard Operating Procedures
- Inventory Control
- Insurance Needs
- Waste Management
- Environmental Sustainability
- Records and Reporting
- Safety and Security
- Community Relations
- Hiring and Staff Recruitment
- Employee Training Program
- Financial Plan
Step 4 – Obtain Supporting State Agency Approvals
Depending on what type of license our clients are pursuing, local and state agencies issuing licenses for your cannabis business may require approvals from other agencies before an application will be considered complete. These agencies include:
- Secretary of State (SOS) (http://www.sos.ca.gov/business-programs/cannabizfile/)
- Department of Tax and Fee Administration (DTFA) (https://www.wildlife.ca.gov/Conservation/Cannabis)
- State Water Resources Control Board (SWRCB) (https://www.waterboards.ca.gov/water_issues/programs/cannabis/index.html)
- Department of Fish and Wildlife (CDFW) (https://www.wildlife.ca.gov/Conservation/Cannabis); and
While every cannabis business needs an entity formed through the SOS and a seller’s permit from the DTFA, environmental approvals issued by SWRCB, CDFW, and CalFire are only required for cannabis cultivation licenses. Indoor operators must obtain a waiver from both the SWRCB and CDFW and those operating a mixed-light or outdoor operation may need a permit. Land development involving the removal of commercial trees will need an exemption or permit from CalFire. If you are unsure what approvals apply to your cannabis business, contact one of our cannabis consultants.
Step 5 – Obtain Local Approval
Every cannabis business in California must first obtain approval to do so from the city or county in which the business is located before the state will issue a license. Local cannabis approvals typically involve a land use permit and a business operations permit (also called a license). Cannabis businesses are usually more controversial than other business types and local governments often require a conditional use permit involving a public hearing to allow residents the chance to voice their opinion about whether the business is a good fit for the community. Additionally, a conditional permit includes an environmental assessment that analyzes whether the cannabis business will significantly impact the environment in any way. Business owners must also disclose a background check, entity documentation, and financial information. Our cannabis consultants assist our clients by preparing a comprehensive and organized application package that provides regulators all the information they need for their review.
Step 6 – Obtain State Cannabis License
Once local approval is received, cannabis businesses are ready to apply for a state license. The state agencies issuing cannabis licenses require an extensive list of information about your business before approval. However, if the steps we described above are completed, most of this information will already be ready. Cultivators will need to apply to CalCannabis (http://calcannabis.cdfa.ca.gov/), a division of the Department of Food and Agriculture. Manufacturers must apply to the Manufactered Cannabis Safety Branch (https://www.cdph.ca.gov/Programs/CEH/DFDCS/MCSB/Pages/MCSB.aspx) of the Department of Public Health. Retailers, testing labs, distributors, and microbusinesses must apply to the Bureau of Cannabis Control (http://www.bcc.ca.gov/). Our cannabis consultants help clients ensure that their applications are complete and organized to streamline review and obtain approvals faster.
Step 7 – Maintain Permits and Licenses
While obtaining a permit or license is an accomplishment, local and state agencies include conditions and monitoring and reporting requirements a cannabis business must follow to keep the approval in good standing. Our cannabis consultants help clients prepare through proper organization, planning, and implementation of a compliance program that is integrated into operations. Because there are literally hundreds of requirements for a state cannabis license, it is imperative to ensure that your cannabis business is ready for unannounced inspections, audits, and license renewals.
For more information on how to obtain your permit or license contact us today for a half-hour consultation.