How to Start a Medical Marijuana Business in California

Medical marijuana shops or medical cannabis dispensaries are nothing new in California. They have been around since the law was passed in 1996 that legalized medical marijuana in California. Prior to 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 Safety and Regulation Act 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.

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

Both laws 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 types of licenses available under both laws, including licenses related to various parts of a marijuana business, including the following license types: manufacturer, test, dispensary or retail store, distribution, and transporter.

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 marijuana manufacturing and testing.

Your new marijuana business, whether it’s a medical marijuana dispensary or an adult recreational marijuana retail store, will want to stay 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 State of California 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 Bureau of Marijuana Control. At the time of this writing, this Division of the Department of Consumer Affairs did not yet have a website or active webpages outlining the new licensing requirements.