California Laws and Regulations

Everything you need to know for cannabis-based businesses

Proposition 64 recently passed in 2016 in California and legalized “recreational marijuana for persons aged 21 years or older under state law and establishing certain sales and cultivation taxes”.

Prop 64 is allowing recreational dispensaries to open for business and sell marijuana to adults (21 and older) and is phasing out the “collective” and “cooperative” business models that dispensaries are using in California today. There are strict guidelines that these new dispensaries will need to abide by and there will be limited licenses available on a city-by-city basis. If you are planning on opening a dispensary under the new laws in California, this is what you need to know.

California

What Will Happen to Medical Users and Dispensaries

One, for medical marijuana users, the medical marijuana card program will not be going away. The California Department of Public Health (CDPH) will continue to print ID cards and maintain a database of qualified users for verification. Two, for medical marijuana growers, your medical marijuana cultivation licenses WILL NOT be valid for recreational cannabis growth. You will need to apply for a nonmedical cultivation license under Business and Professions Code Section 26053. Three, medical marijuana dispensaries will not be allowed to sell non-medical cannabis to individuals without a doctor’s recommendation. Only from January 2018 will individuals be allowed to start applying for non-medical cannabis licenses and once these businesses open then adults over 21 can purchase recreational cannabis.

Collectives and Cooperatives Will No Longer Be Legal

Under California’s new laws, the Bureau of Medical Cannabis Regulation (BMCR) has made it very clear that they plan on “phasing-out” the collective model. One year after BMCR starts accepting applications for the new dispensaries, collectives and cooperatives will be illegal to run in the state of California. This is extremely important for those business-owners that want to continue their growth; be on the lookout for the new licenses!

California Dispensaries Need to Have Local and State Approval

California is known for it’s diversity and dense population. Along with that comes cities and counties that will still refuse to allow recreational dispensaries operating within their jurisdiction. Cannabis business owners need to be mindful of where they are conducting business or planning on conducting business. BMCR is requiring local (city/county) approval prior to applying for the state license. Not all cities/counties will be on board with the new laws; we will provide a list of cities/counties that are banning recreational sales as they come out.

California Recreational Dispensary Licensing Under Prop 64

Licensing for California dispensaries under Prop 64 will begin January of 2018. One year after this (January 2019), the collectives and cooperatives that we see today will be deemed ILLEGAL. If you plan on operating as a dispensary in California past 2019, you will need to apply for a new license with the Bureau of Medical Cannabis Regulation (BMCR).

The BMCR requires that a seed-to-sale, “track and trace” program is used for all cannabis businesses, including growers, testers, and dispensaries. The California Department of Food and Agriculture will establish the track-and-trace program for medical and nonmedical cannabis. This program will allow the movement of cannabis to be documented from the moment it’s planted in the ground (by cultivators), to when it’s tested (by testing facilities), to when it’s sold (by dispensaries). According the BMCR, “the system will ensure that if public safety concern arises, the source can be quickly identified”.

Licenses are limited, and the cities are giving them out to the most equipped professionals.