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Starting a Cannabis Business in California

Starting a Cannabis Business in California

Since November 8, 2016, growing marijuana in your home has been legalized. Marijuana can now be used for recreational as well as medicinal purposes. Laws are also being passed that allow you to start your own marijuana-growing business in California. These laws have provisions for retail stores, manufacturers, marijuana cultivators, as well as testing facilities and marijuana distributors.

While these laws are still being discussed, regulators have until January first of 2018 to begin issuing licenses and regulations. A date has not yet been given for when applications can be sent in for those entrepreneurs hoping to launch a marijuana-growing business in California. However, there are some steps you can take while regulations are still undergoing.

What to do to prepare for a cannabis business in California

As regulations are changing every day, you should start reading up on where the laws are as far as growing marijuana in California. You should also start talking to financiers and business investors who might be interested in funding your marijuana business. Research on how to write a business plan that you can prepare and present to potential investors.

Opening a Marijuana Retail Store

In California, marijuana retail stores are now legal. However, opening a business can be a challenge, and there are regulations enforced by both the state and your city that you must follow. Make sure you research your local region to find out what business regulations you need to implement in order to open your retail marijuana business.

Marijuana Retail Store

Marijuana Retail Store – Image powered by Huffingtonpost.com

As with any business, you need a detailed corporate structure and a retail business plan. Your business plan will not only give potential investors an idea of how your business will progress, it will also help you plan for the future of your marijuana-growing business.

You will also need to acquire the licenses for your business, including marijuana-growing licenses for retail use.

Non-Profit Marijuana Businesses

If you plan to open a marijuana business, note that most counties in California only allow non-profit marijuana businesses. Normally, these types of business remain not-for-profit because they distribute marijuana primarily for medical reasons. The Medical Marijuana Program Act of 2003 prohibits groups or individuals to cultivate or distribute marijuana for profit. This means that revenues will go toward the cultivation and distribution of marijuana, as well as any other business investments you have made. You will be reimbursed for any business expenses from these revenues, but you may not make any profits from the sale of medical marijuana.

Medical Marijuana Collectives Regulations

The California Safety and Health Code 11362.775 requires that any distributor of medical marijuana must be associated with the California collective that cultivates marijuana for medical purposes. Facilities that cultivate and distribute marijuana have to follow strict regulations and adhere to the guidelines in order to comply with state regulations. In order to remain a member of a collective, you have to follow their codes and remain up to date with any changing regulations.

Medical Marijuana

Medical Marijuana – Image powered by Edition.cnn.com/

First, you must file articles of corporation under the Corporations or Food and Agricultural Code. Your business should be set up as a non-profit to benefit customers who need marijuana medically.

You must also obtain proper forms to start your business and pay the proper taxes. Medical marijuana is still subject to sales tax. This means that any distributor must obtain a seller’s permit. You may also have to apply for a business license or zoning permit depending on what county or city your business is located.

In order to remain part of the collective and continue selling marijuana through your business, you have to prove that you are distributing marijuana for medical purposes and nothing else. Your patients have to fill out forms stating they need marijuana for health reasons, and the patient’s caregiver must have a medical marijuana identification card. Anyone working for your business must also sign a contract that they are only distributing marijuana for medical purposes.

In addition, you can only purchase marijuana from cultivators who are also part of the collective. They must also follow the strict rules enforced by the collective, which keeps marijuana businesses in line with state regulations.

Keep Up to Date with Changing Regulations

The most important part of starting a marijuana business is making sure that you are always up to date with the regulations. Marijuana cultivation is a new and growing business. Laws will change as issues become apparent. Stay up to date and research what you and your business need to do in order to stay within regulations.

Thanks for reading

William Kroger

William Kroger Cannabis attorney

William S Kroger is an award-winning criminal defense lawyer and founder of Kroger Law Group, a Southern California firm with offices in Beverly Hills. Mr. Kroger specializes in marijuana defense and is an active member of NORML, the National Association for Criminal Defense Lawyers, the Association of Federal Defense Attorneys and the International Criminal Law Association.

Mr. Kroger practices law in the state of California, and has been admitted in several state courts including: Maricopa and Kingman County, Arizona; Citrus County, Florida; Henry County, Georgia; Council Bluffs, Iowa; and Dawson County, Nebraska. He also has defended cases in the Federal Districts of Alaska, Nevada, Wyoming and Utah, as well as portions of California, Georgia, Florida, Michigan, Mississippi, New York, Texas, and Wisconsin. Contact him at www.laattorney.com

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Comment Section

One thought on “Starting a Cannabis Business in California


By Dayna Bowles on 21 March 2017

Trying to start a delivery business as our county does not allow dispensaries. Then a shop when it becomes legal. I have the financial backing just need to know how to start. I am a 51 year old grandma and have some good ideas as I have grown for 35 years. Any information would be greatly appreciated. Thank you, Dayna

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