Cannabis Dispensary

How to Apply and Get Approval for Annual Dispensary License in California

August 17, 2020 0 Comment

The cannabis retail industry is growing by the day in California. With such fast-paced growth, numerous business owners are leaping to open their own dispensary.

Although it’s currently a hot market, opening a dispensary is a problematic project. There are many steps to take before you can open your doors. One of these significant steps is to get approved for a California dispensary license.

If you think you have what it takes to enter this market, keep reading to learn how to complete the first step: getting approved for a license.

Seven Steps to Getting a License

Let’s discuss how to apply and get approval for an annual dispensary license in California in 7 steps.

1) Prepare a Work Plan 

The first step before doing anything else is writing down an overview of the entire plan. You may or may not already have some of the elements in the program figured out.

If you haven’t, it’ll give you an idea of where to start. Things to include in the project are visions and goals, property, operations and procedures, financial flexibility, and tax compliance. 

2) Prepare a Site and Facilities Plan 

One of the critical steps is choosing a location for your site. Options might be limited because cannabis stores can only be in the designated green zones.

Restrictions can include factors like the number of other cannabis retailers near the area, schools nearby, churches nearby, etc. Some of the property’s features could disqualify you from receiving a license. Once you have a site, design a model to show the store layout. 

3) Prepare a Business Plan 

You won’t get approved if you don’t have a solid business plan. A business plan should show how your business will succeed. You’ll also want to include exit strategies, target demographics, and conduct market research to gain investors.

There will be multiple retailers trying to get an approved license, so you won’t want to fall behind. Some basic things to include in your plan are: 

4) Supporting State Agency Approvals 

Get approval from supporting state agencies like the Secretary of State (SOS) and Department of Tax and Fee Administration (DTFA).

Form a legal entity from the SOS and decide which entity best suits your needs. There are three entities: 

  • Limited Liability Corporation (LLC)
  • For-Profit Corporation (S-Crop, C-Crop)
  • Mutual Benefit Nonprofit Corporation (MBNPC)

Depending on the level of land development involved for your site, you may require approval from CalFire, the Department of Fish and Wildlife (CDFW), or the State Water Resources Control Board (SWRCB).

5) Obtain Local Approvals 

Apply for a discretionary conditional land use permit (CUP) from the Planning Department. This means you’ll need to present your project at a hearing.

The planning commission and city council will then vote to accept or deny the project if you get accepted, great! But, you may still need to get additional certifications and environmental assessments. 

6) Obtain State Cannabis License 

If you’ve completed all the previous steps, you’re almost at the end of the road. To get final state approval, you’ll need to submit the following documents: 

  • Security Plan 
  • Seller’s Permit
  • Local Approvals
  • Surety Bond ($5000)
  • Business Entity Formation 
  • Neighborhood Context Map 
  • Live Scan Background Check 
  • Property or Lease Agreement
  • Site/facilities Plan 
  • Business Plan 
  • Labor Peace Agreement (>20 employees) 

Once you have submitted the documents, the state will confirm that you have received approval from the local governments.

7) Maintain Permits and Licenses 

Congrats, you made it! But don’t get too comfortable. Just because you got approval doesn’t mean you can start slacking. It will be your responsibility to maintain all your licenses and permits.

All licenses and permits are issued with an agreement to track inventory, stay up-to-date, and report back to government regulators. State officials might stop by your business to ensure everything is in order, so it’s in your control to stay current. 

Get to it! 

So, now you know opening a dispensary isn’t just a hobby you can pick up in your free time. It requires tons of work to get it running.

This guide outlines only one of the steps, which is: how to get approved for a state license.

Check out the California Cannabis Portal to gain information on how to get started, look for required documents, and the steps to take if you’re interested in becoming a California dispensary owner.  Reference.

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