Cannabis Update: New York / New Jersey

Posted by Margolin & Lawrence on December 5, 2018

Steps toward the legalization of cannabis in New York and New Jersey have been in the news recently. But how close are these states to having fully licensed legal cannabis supply chains? Here's a brief overview of the two states' marijuana laws and where they stand in regard to cannabis licensing.

NY State Licensing Overview

Currently, there are ten (10) “Registered Organizations” responsible for manufacturing and distributing medical marijuana in New York State. Pursuant to the Compassionate Care Act (CCA), which established New York’s comprehensive medical marijuana program in July 2014, each Registered Organization is authorized to have up to four (4) dispensing facilities. 

New York’s State Department of Health (NYSDOH) began accepting applications for registrations for a Registered Organization on April 27, 2015, with a deadline for receipt of applications on June 5, 2015. Of the original 43 applicants, five (5) Registered Organizations were approved July 31, 2015; another five (5) were registered by NYSDOH on August 1, 2017. The NYSDOH has yet to announce opening another application window for additional prospective Registered Organizations.

While New York’s Medical Marijuana Program is currently closed to would-be applicants looking to manufacture and dispense medical marijuana under the CCA, a spokesperson for Gov. Andrew Cuomo recently stated that the administration expects to introduce a comprehensive proposal for legalizing and regulating recreational adult-use marijuana in 2019. Therefore, cannabis businesses interested in becoming licensed in New York State should be looking down the road to determine next steps in preparation for licensure.

NJ State Licensing Overview

Currently, there are six (6) “Alternative Treatment Centers” (ATCs) responsible for manufacturing and distributing medical marijuana in New Jersey, pursuant to the Compassionate Use Medical Marijuana Act, which established the state's medical marijuana program in 2011. In August 2018, the New Jersey Department of Health (NJDOH) accepted 146 applications in response to its request to add up to six (6) additional ATCs. Despite a November 1st target date, NJDOH has yet to announce the successful applicants, stating that additional time is needed to complete a full review of the applications submitted. The NJDOH is not currently accepting applications to open additional ATCs. But on November 26th, the state Senate and Assembly budget committees passed Senate Act S2426, which, once passed by the full Senate and Assembly and signed into law by Gov. Phil Murphy, would require the NJDOH to issue licenses for 34 new dispensaries and six new cultivation facilities within 90 days.

Additionally, the most recent version of the New Jersey Cannabis Regulatory and Expungement Aid Modernization Act (the NJ Act) was released last week and also passed by the state Senate and Assembly budget committees yesterday, November 26th. The next step for New Jersey is a vote by the full Senate and Assembly slated for mid-December. Until then, negotiations between Gov. Phil Murphy and NJ’s legislature will continue, mostly with regard to the tax rate and how much power the proposed Cannabis Regulatory Commission will exercise over the industry.

Next Steps

Because New York is at the inception of legalizing recreational marijuana, regulations and licensing requirements for adult-use cannabis businesses have not yet been implemented. That being said, a review of the NYSDOH Medical Marijuana Program Application for Registration as a Registered Organization (https://www.health.ny.gov/forms/doh-5138.pdf) is likely a good place to start for prospective medical and recreational cannabis businesses alike.

New Jersey is closer than New York to recreational legalization, and could have a bill passed before 2019. It is important for anyone looking to establish a medical cannabis business in New Jersey to keep an eye on the passage of S2426, which would mandate NJDOH’s licensure of 34 new dispensaries and 6 cultivation facilities within ninety (90) days. However, it remains unclear whether the NJDOH would open another application window, or choose from the 146 applications submitted in August 2018. In the meantime, it would behoove any prospective cannabis business licensee to take a look at both the NJ Act (S2703), as well as the ATC permit request application materials (https://www.nj.gov/health/medicalmarijuana/alt-treatment-centers/applications.shtml). Because the NJ Act gives local governments the power to enact their own cannabis regulations and ordinances – prospective licensees will first need to make sure their cannabis business will be permitted by their local jurisdiction.

While we recognize that any future recreational adult-use business license applications will differ from the above-mentioned applications for Registered Organizations and ATCs, much of the information requested will most certainly be the same. As is standard throughout jurisdictions that have legalized the use of both medical and recreational marijuana, any cannabis business seeking licensure will need to make full disclosures of entity, ownership and financial information, as well as identify and describe proposed facility locations, buildings and equipment. Additionally, those seeking licensure will need to provide licensing authorities with an extensive operating plan with detailed descriptions of policies and procedures related to its operations including but not limited to: processes, devices, security, quality assurance, recalls, staffing and record keeping.

To get a head start as the regulatory frameworks for cannabis businesses in New York and New Jersey continue to develop, anyone looking to establish a cannabis business in either state should be taking steps to create a tentative operating plan, focusing on those aspects and information that can be reasonably assumed as required for any future licensing application.

For more information on cannabis licensing in New York, New Jersey, and any other state, contact our cannabis attorneys at info@margolinlawrence.com.

How Would a White Labeling Ban Affect Cannabis Business?

Posted by Margolin & Lawrence on December 3, 2018

What is white labeling, and how might the proposed white labeling ban affect commercial cannabis deal structures?

Both established and nascent players in the cannabis industry have turned to white labeling – rebranding an existing product under a different producer's name – as a means to carve out their niche. For instance, some manufacturers in the process  of obtaining proper local and state licenses have entered into contractual arrangements whereby they source product from licensed cultivators or manufacturers before branding and distributing the product as their own. Other deals see established brands, traditionally unassociated with cannabis, staking their industry claim by offering their intellectual property (branding) and promotional efforts in joint ventures with licensed manufacturers looking to find brand awareness for their product.

Despite the fact that white labeling is standard operating procedure in product manufacturing at large, the current version of the California Bureau of Cannabis Control’s proposed regulations have been interpreted by industry stakeholders who are disturbed at what is being called an outright ban on intellectual property licensing. While §5032 seems to be taking aim at arrangements whereby non-licensees are purchasing, packaging and selling cannabis without a license, the language has been interpreted to reach as far as to ban licensees from entering into trademark licensing agreements with brand owners. Such interpretation could even prohibit a parent company from holding its licensed cannabis manufacturing operations in one entity and its unlicensed brand in another – suggesting the need for license options to facilitate trademark licensing in the cannabis space:


If  §5032 is promulgated as currently drafted, the strictest interpretation would force parties currently engaged in white labeling to re-structure their deals or get proper licensing. Established brands may need to sell rather than license trademarks – effectively forcing or keeping brand owners out of the cannabis industry and companies holding their brands in separate entities may need to obtain additional licenses – an expensive and time consuming endeavor.

Other types of arrangements may or may not meet regulatory requirements. For instance, would it be OK for a cannabis brand to operate as an unlicensed subsidiary of a licensed manufacturer? What if the unlicensed cannabis brand acquires an ownership interest in the licensed manufacturer, but remains unlicensed itself? At the moment, the answers to these questions are unclear.


Until the industry is provided with some official guidance from the BCC or the regulations are tested, many licensees and non-licensees operating in cannabis will need to examine and possibly modify their business relationships or look into licensing options in attempt to stay compliant.

Fun fact: Wine industry folks who purchase bulk wine before bottling/branding/selling it as their own combine two licenses (17/20) to achieve ABC compliance. A type 17 is a beer/wine wholesaler license and a type 20 is an off-premise beer/wine retailer license.

For more information on cannabis business and licensing, reach out to our California cannabis attorneys at info@margolinlawrence.com.

Sunset Clauses and California Cannabis

Posted by Jenna Rompel on November 27, 2018

Twilight is approaching in the state of commercial cannabis in California. Pursuant to the Medicinal and Adult-Use Cannabis Regulations and Safety Act (MAUCRSA), Business and Professions Code Section 26050.1, each of the state licensing authorities regulating commercial cannabis are subject to a Sunset Clause that prohibits the issuance or extension of temporary state licenses starting January 1, 2019.

What does this mean for you?

As a reminder, California has a dual-licensing system regulating commercial cannabis in the state. To operate legally, you must have both a local license issued by the local jurisdiction where your business is established, and a state license issued by one of the three state licensing agencies, the Bureau of Cannabis Control (BCC), California Department of Public Health (DPH), and California Department of Food and Agriculture (CDFA). Pursuant to MAUCRSA, the state temporary license enable business to operate while the state processes the annual license application. If you have already received a state temporary license and it expires prior to this date, you must submit an application for an annual license in order to receive the extension.

Each agency has set their own requirements dependent on the license type applied for and may be subject to compliance with ancillary agencies at the state level. Look through the application materials thoroughly, and consider consulting with an attorney to ensure you are in compliance with the necessary documentation.

To apply for a state temporary license, at a minimum you will need:

  • Local Authorization

  • Premises Information

  • Evidence of Legal Right to Occupy

Should the state deem any part of your application incomplete, they will notify the primary contact with an opportunity to rectify any insufficiencies. This will inevitably delay the review of your application until all deficiencies are rectified. We would like to reassure our readers this is a normal part of the licensing process and is common practice to go back and forth with the state to ensure your application is in line with the regulations.

DO NOT DELAY

We advise sticking to the state’s December 1 recommended deadline to submit your application for a temporary license. The review period can take up to several weeks so make sure to submit the application timely to ensure there is sufficient time to receive the license. You may still apply for an annual license after the new year, but are subject to the state’s review period until they issue the annual license. The review period of the annual application can take up to several months. If you do not hold a valid local and state license you are prohibited from conducting commercial cannabis operations in the state.

This can have an significant repercussions for businesses to take into consideration. For example, if you are paying rent on the property and cannot operate can cause significant financial strains. We recommend consulting with an attorney in preparation of the annual license.   

California Department of Public Health - Regulates Cannabis Manufacturing

https://www.cdph.ca.gov/Programs/CEH/DFDCS/MCSB/Pages/MCSB.aspx

California Department of Food and Agriculture - Regulates Cannabis Cultivation

http://calcannabis.cdfa.ca.gov

Bureau of Cannabis Control - Regulates Cannabis Retail, Delivery, Distrbution, Testing, Microbusiness

https://bcc.ca.gov/

Where are Cannabis Lounges Allowed?

Posted by Margolin & Lawrence on November 1, 2018

As recreational cannabis becomes legal in California, the marijuana industry is expanding into a number of different spaces that previously were impossible to operate in legally. One of the most exciting of these new opportunities is the cannabis lounge. Made famous by Amsterdam’s marijuana cafés, lounges are cannabis retail businesses that also allow for the on-site consumption of cannabis – an exciting possibility for customers, business owners, and investors alike. However, while a great deal of interest in these businesses exists across the state, only a few jurisdictions in California plan to allow cannabis lounges, and only some of those locations currently are open to licensed cannabis lounge operations.

When it comes to cannabis lounges currently in operation, the Bay Area is ahead of the pack by a wide margin, with a number of cannabis lounges fully licensed and open for business – seven in San Francisco and one in Oakland, according to a recent Leafly article. No other jurisdiction, in California or elsewhere, has more individual lounges in operation. However, several other cities in California are in the process of opening up for fully licensed cannabis lounge business.

After the Bay Area, the Los Angeles area is furthest ahead in the process of cannabis lounge licensing. Earlier this year, West Hollywood opened applications for cannabis lounges, planning to grant a total of 16 licenses – 8 for edible-only lounges, and 8 for lounges allowing edibles, smoking, and vaping. These applications are still under review, but the city plans to announce its decisions by the end of November, meaning operational businesses may be only a few months away. The city of Los Angeles has also shown interest in social consumption lounges. Between LA City and West Hollywood, this indicates that LA county may not be far behind the Bay Area when it comes to cannabis lounges.

While San Francisco and Los Angeles are the largest California cities to move toward legalizing cannabis lounges, several other areas in the state are beginning to explore the possibility as well. Earlier this month, the city of Eureka voted to allow on-site consumption. After voting to approve cannabis lounges last year, the city of Palm Springs issued its first permit for on-site cannabis consumption this summer, and, though the business in question has yet to open, several other communities in Coachella Valley are considering following suit.

While cannabis lounges remain a controversial issue in many communities, with local residents concerned about the potential nuisances that may come with legal on-site consumption, many cities across California are also beginning to see their potential economic and social appeal. Given the large amount of consumer interest demonstrated in the cities that have already moved toward licensing on-site consumption, the number of jurisdictions embracing legal cannabis lounges can be expected to increase in the future.

New Cannabis Legislation in Riverside County

Posted by Margolin & Lawrence on October 30, 2018

Last Tuesday, the Board of Supervisors in Riverside County approved an ordinance allowing the following commercial activities starting on 26th December: Testing, Manufacturing, Distribution and Wholesale Nurseries. There is now a 60-day deliberative period regarding the cannabis businesses in Riverside based on the newly approved ordinance. The Board also voted to allow a limited number of dispensaries and cultivators to operate in 2019. Up to nineteen dispensaries and fifty grows will be permitted in unincorporated Riverside County as decided by a 3-2 vote following a public hearing that last nearly four hours. The Board also approved an “Implementation Plan for Retail and Cultivation” uses that is scheduled for process in early January 2019. The proposal process will include pre-registration by interested applicants, and the issuance of a Request for Proposals by the Planning Department. However, there are certain conditions that will be enforced regarding additional taxation and fees associated with each of these activities as determined by the Planning Commission.

Cannabis Business Law

Posted by Margolin & Lawrence on October 19, 2018

California cannabis entrepreneurs have to go through the often lengthy and cumbersome process of applying for local and state commercial cannabis licenses.  But that is only the beginning of the journey to becoming a successful, fully-compliant business in this emerging industry.

Entrepreneurs interested in operating a cannabis business in California must decide how their business will operate and what business structure will work best for their specific business goals. They must consider the commercial, legal, and tax implications that come with deciding which business structure they want to operate under.  

Once entrepreneurs have decided which business structure will best work for their specific business goals, the next step is to begin the entity formation process. This process consists of deciding what the Company name will be and drafting the entity formation documents that will determine how your cannabis business will operate.

As a full-service cannabis law firm, we represent many clients who have gone through this process already. Two of the most common business structures we have seen entrepreneurs decide to start their cannabis business as have been Limited Liability Companies (LLCs) and Corporations. Although there are some similarities between both business structures, there are some major differences that entrepreneurs need to understand prior to beginning the entity formation process.  

At Margolin & Lawrence, our cannabis attorneys can help you with all the formation and governing documents for your LLC, such as the articles of organization, operating agreements, and statements of information. If you decide on structuring your cannabis business as a corporation, our cannabis attorneys can help you with your corporate formation documents such as bylaws and articles of incorporation.

Additionally, we understand how important it is for new businesses to raise capital to continue to grow their business. Given that cannabis is still illegal under federal law, entrepreneurs looking to raise capital for their cannabis business need to seek private investment capital. In order to do so, there are a series of important documents private investors want to examine before they decide to invest in your cannabis business.

For instance, companies looking to raise capital need private placement memoranda (PPMs) and subscription agreements. A PPM is a legal document that is given to prospective investors when selling stock or any other security interest in a business. The PPM provides prospective investors with an in-depth look at your business, including management, analysis of operations, risks factors, financial information, among other things. The goal of the PPM is for prospective investors to be fully informed about all aspects of your cannabis business.

A subscription agreement is an agreement between a corporation and the investor (the subscriber) in which the corporation promises to sell a certain number of shares at a specific price to the subscriber and, in return, the subscriber promises to buy the shares at the agreed upon price.

At Margolin & Lawrence, our cannabis attorneys can help you and your business with any capital-raising compliance and legal representation. Additionally, our cannabis attorneys can help you decide which business structure best meets your cannabis business goals. And we can help your cannabis business remain compliant with all the governing laws every step of the way, including ongoing compliance with state and local commercial cannabis regulations and employment laws, avoiding and minimizing the expenses of civil litigation, addressing the implications of federal illegality of cannabis, and helping to informally resolve any internal or external disputes that jeopardize the business operation.

Central Coast Update

Posted by Jenna Rompel on October 16, 2018

Commercial cannabis is heating up on the central coast. Here’s a look at what’s green:

The City of Goleta began accepting cannabis planning applications on August 17th. Applicants will need to obtain either a Land Use Permit or Conditional Use Permit issued by the Planning & Environmental Review (PER) Department. A Cannabis Business License will only be issued upon approval by the PER Department. Applicants are required to submit an Odor Abatement Plan and Certification approved by a Professional Engineer or Certified Industrial Hygienist. In addition, cultivators will need to show proof of consultation with Southern California Edison (SCE) showing participating in SCE’s Savings by Design Program as well as participation in the Resource Innovation Institute’s Calculate Powerscore Tool. More information on Conditional Use Permits and Land Use Permits for cannabis operators in the City of Goleta can be found here.

Cannabis Business Licenses will be valid for one year from January 1 to December 31, regardless of when the license was issued. Something to consider as we approach the latter end of the year, as all businesses will need to renew their license prior to January 1 and pay the applicable renewal fee. The amount of retail licenses the city will issue has been limited to 15. The city will review applications on a first-come, first-serve basis and will implement a waitlist for potential retailers. More information on Cannabis Business Licenses for the City of Goleta can be found here.

The City of Lompoc is open for all cannabis operators with the exception of outdoor cultivators. Currently, there is no cap to the amount of licenses the city will issue and will allow for onsite consumption. Prospective operators will need to obtain a commercial cannabis use license issued by the City. Application materials and information on the city’s laws and regulations can be found here.

Santa Barbara County is expected to open by the end of the year for new businesses. Prospective applicants will first need to obtain either a Land Use Permit or Conditional Use Permit. Permit type is dependent on whether you are located inside or outside the Coastal Zone and distance to sensitive use receptors. Check here for information on land use and zoning in Santa Barbara County. A maximum of 8 licenses will be issued for retailers and all outdoor cultivation has been prohibited in the Coastal Zone. Once you have received the applicable land use or conditional use permit, you will then need to apply for a Cannabis Business License. Application materials for a Cannabis Business License will be made available here. Supplemental information may be required such as, environmental and energy conservation measures dependent on your zone. Be sure to check through the application requirements carefully and thoroughly or consider hiring an attorney to breakdown the process.

For more information on cannabis licensing, check out our guide to California cannabis laws or reach out to us at info@margolinlawrence.com.

San Francisco Cannabis Licensing & Equity Program

Posted by Xochilt Gama on October 4, 2018

San Francisco’s Golden Gates have opened for those interested in running their cannabis business in the City and County of San Francisco. Although the San Francisco Office of Cannabis is currently accepting applications, not everyone is welcomed to apply just yet.

Currently, the San Francisco Office of Cannabis is accepting applications only for applicants who are applying through the Equity Program or as an Equity Incubator. Those who do not meet the criteria to apply under the Equity Program or as an Equity Incubator, will need to wait to apply after the San Francisco Office of Cannabis opens applications, which they expect will open before 2019.

In order to apply as an Equity Applicant, there are numerous requirements the applicant needs to satisfy. First, the equity applicant must:

  • Apply as a person, which means that a company cannot apply under the Equity Program
  • Have net assets below established limits for each household (click here for more details)
  • Be one of the following:
  1. The business owner
  2. Own at least 40% of the business and be the CEO
  3. Own at least 51% of the business
  4. A board member of a non-profit cannabis business where most of the board also qualify as Equity Applicants
  5. An individual with a membership interest in a cannabis business formed as a cooperative.

Additionally, the equity applicant must meet 3 out of the following 6 equity conditions:

  1. Have a household income below 80% of the average median income in San Francisco for 2017. This amount is calculated based on how many people are in your household (click here for more details.)
  2. Have been arrested for or convicted of the sale, possession, use, manufacture, or cultivation of cannabis (including as a juvenile) from 1971 to 2016
  3. Have a parent, sibling or child who was arrested for or convicted of the sale, possession, use, manufacture, or cultivation of cannabis (including as a juvenile) from 1971 to 2016
  4. Lost housing in San Francisco after 1995 through eviction, foreclosure or subsidy cancellation
  5. Attended school in the San Francisco Unified School District for a total of 5 years from 1971 to 2016
  6. Have lived in San Francisco census tracts for a total of 5 years from 1971 to 2016 where at least 17% of the households had incomes at or below the federal poverty level. To determine whether you satisfy this condition, please click here to see a map showing areas of significant poverty in San Francisco. 

Those who satisfy the criteria to be an Equity Applicant will not have to pay the $5,000 permit fee for this year. However, equity applicants will have to pay for renewals.

Equity Incubators will also provide Equity Applicants with rent free space for 3 years or technical assistance to help Equity Applicants run their business. Once the Equity Applicant has satisfied the eligibility criteria, the San Francisco Office of Cannabis will help equity applicants partner with an equity incubator business. The Office of Cannabis will send a list of verified equity applicants, which will help equity applicants and incubator businesses find one another.

To find out more about the Equity Incubator program, click here.

Equity Applicants can apply for the following licenses:

  • Cultivation
  • Distribution
  • Manufacturing (volatile or non-volatile)
  • Retail (medical and adult use)
  • Delivery only retailer (medical and adult use)
  • Medicinal cannabis retailer (medical only)
  • Testing Laboratory
  • Microbusiness (can conduct up to 4 activities: cultivation (less than 10,000 sq. ft.), manufacturing (non-volatile only), distribution, and retail.

More information about the application process and requirements can be found on the San Francisco Office of Cannabis website.

What Should I Know for My Cannabis Business?

Posted by Margolin & Lawrence on September 18, 2018

The logistics of running a legal cannabis operation involve many questions that may seem surprising or daunting to both current and aspiring business owners. As a California cannabis law firm, here are a few of the issues that we’ve seen cannabis businesses need answers for. If you’ve found yourself asking any of these questions about your own operation, our lawyers may be able to help.

How much can I expect to spend?

At present, the capital requirements to start a cannabis business are very high; on top of the normal costs of starting a business, like buying real estate and hiring employees, the industry is very tightly regulated, and it’s not possible to get an outside loan. That means your business has to be privately fundraised, so it’s important to figure out exactly how much money you have and how much you’re willing to spend.

The application fees alone for cannabis licensing are often several thousand dollars, and many jurisdictions require both proof of funding and a detailed business plan before they consider a cannabis licensing application complete. A cannabis lawyer can help you find this information in order to start your licensed operation.

Is my property in an eligible location for cannabis business?

Zoning requirements vary widely based on your jurisdiction and which type of cannabis activity you’re interested in, so it’s not always easy to tell whether a given property or address is eligible for a particular activity. In addition to restrictions on which zones a given activity can be located in (for instance, cannabis cultivation might be banned in commercial zones but allowed in industrial ones), many municipalities have setback restrictions that prevent cannabis businesses from being located within a certain distance of schools, parks, residential areas, or other cannabis businesses.

Interpreting the local zoning regulations to determine for what activities your business is eligible is another service that cannabis lawyers can provide.

What information do I need to apply for a cannabis business license?

Applying for a cannabis business license isn’t just a matter of filling out an application form – most state and local licensing authorities will require a large amount of information about the business and its owners, including a complete operating plan describing how your establishment will meet all legal requirements for cannabis business activity.

On top of this information, you’ll also need to have business documents such as a seller’s permit, federal employer ID number, and certificate of good tax standing in order. On top of that, most applications will require you to provide accurate financial information, insurance documentation, and enough personal documentation for each member of your business to pass a full background check.

Finding these documents and preparing them for your final application is just one service that cannabis lawyers can provide for your business.

Should I get a license for medical-use or adult-use cannabis?

At the present moment, many states and municipalities have separate regulatory regimes for medical-use and adult-use cannabis, often with very different legal requirements. For your cannabis business to succeed, you’ll need to decide which license (or combination of licenses) is best for your business, then master the licensing and compliance processes for the type of cannabis business you choose. A cannabis lawyer can help guide you through this process, from choosing the right activity to applying for a license to remaining in compliance with the law once your business is operational.

What cannabis activity should I apply for?

In addition to medical-use and adult-use, cannabis business licenses are broken down into different activities, such as cultivation, manufacturing, and retail. Additionally, many of these categories are split into subcategories such as indoor and outdoor cultivation or storefront and non-storefront retail. As with medical and adult-use cannabis, these different types of cannabis activities often have very different requirements.

Some jurisdictions also offer boutique categories with special requirements such as Microbusiness, impose restrictions on how many licenses can be granted, or limit which types of licenses a single business can hold simultaneously. For your cannabis business to succeed, you’ll need to optimize which activities to apply for – another task that a cannabis lawyer can help with.

How can I ensure that my business is licensed as quickly as possible?

Given that legal cannabis licensing is a complex, highly regulated bureaucracy currently receiving a large number of applications, it can be difficult for a cannabis business owner to predict how long it will take their business license application to be approved, or to optimize their application in order to be licensed and operational as soon as possible.

Some areas offer a fast track to licensing under their Social Equity Program, in order to ensure that business owners who are disadvantaged or disproportionately affected by the War on Drugs have a quicker path to licensed operation than other applicants. Our cannabis lawyers can help you find out whether you qualify for one of these programs.

Whether or not you qualify for a Social Equity Program, the best way to ensure that you’re licensed as soon as possible is to choose the right license for your business and make sure that the information in your application is complete and correct.

What license should I apply for if I plan to expand my operation?

Especially for new cannabis businesses, the size of a cannabis business at the time of initial licensing might not be the same as the size of the business you hope to run in two or three year’s time. However, cannabis license application fees often vary based on the size of the operation in question, and applications often require businesses to provide details that depend on the size of their operation, including what types of equipment they plan to use, their planned hours of operation, and how many employees they’ll hire (including their labor practices and management structure).

Our cannabis lawyers can help you figure out how to reflect your long-term growth plans in your licensing application, including the multi-year pro forma budgeting and income documents that many municipalities require.

Will I need to apply for additional licenses or permits?

For many businesses, the cannabis license itself is only one of a number of licenses you’ll need for a fully licensed operation. To begin with, new cannabis businesses will need to apply for their tax registrations and seller’s permits. Additionally, depending on your activity, you may need to apply for Conditional Use Permit or Land Use Permit from your local planning department before you can apply for a cannabis business license.

For some activities, like outdoor cultivation, this may require further permits, such as for diversion of water, tree removal, or environmental review. On the other hand, businesses located in cities may be required to apply for enrollment in local Social Equity or community benefits programs. Our cannabis lawyers can help you find out what additional permits you need and help you apply for them.

Provisional Licensing in California

Posted by Margolin & Lawrence on September 5, 2018

Originally, Senate Bill (SB) 1459 was written to allow the county agricultural commissioners (CACs) to include cannabis among reports about the condition, acreage, production, and value of the county’s agricultural products as submitted to the Secretary of Food and Agriculture. The bill was first introduced in the California State Senate on February 16th, 2018, by Senator Cannella (coauthored by Senators Galgiani and McGuire, Assembly Members Caballero and Wood). The impetus for suggesting that CACs report cannabis as an agricultural product was based on the National Agricultural Statistics Services assessment that “providing crop statistics is basically a way to stabilize the agricultural marketplace." Such action would ultimately facilitate the integration of cannabis cultivation into the marketplace, and moreover encourage unlicensed growers to legitimize their businesses. After passing the Assembly Appropriations Committee 13-4 on August 8th, SB 1459 then received a majority vote upon a third reading on the Senate floor.

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This blog is not intended as legal advice and should not be taken as such. The possession, use, and/or sale of marijuana is illegal under federal law.