Back in September, we published a blog post titled “Where Can I Get a Distribution License in California.” Now that the ordinances for the majority of jurisdictions in California have been reviewed and somewhat solidified, Margolin and Lawrence presents an updated list on the viable locations for distribution licenses in California.
The cannabis distribution license allows the transportation of cannabis product from seed to sale. Cannabis product can be defined as flower, oils, hash, edibles, tinctures, topicals, and more. Distributors can act as middlemen and shippers for cultivators and vendors. In California, cannabis distributors are responsible for managing all cannabis product that enters the commercial distribution chain. This not only includes the secure and efficient transportation of product between the distributor and other Marijuana Establishments, but also the collection of tax paid to the state. Primarily this applies to retailers who pay excise tax through the distributor, and cultivators who must also pay cultivation tax through the distributor for all products entering the distribution chain.
Excise tax is collected by the retailer from each purchase of cannabis product, and in California it equates to 15% of each sale. Cultivators pay the cultivation tax to either the manufacturer or distributor (depending on what stage their product is considered ready for consumption). The breakdown for cultivation tax on cannabis product can be found on the CDTFA website: $9.25 per dry-weight ounce of cannabis flowers that enter the commercial market, $2.75 per dry-weight ounce of cannabis leaves that enter the commercial market, and $1.29 per ounce of fresh cannabis plant. It should be noted for all prospective distributors that the responsibility for state tax collection lies with cannabis distributors as they are responsible for managing the distribution chain. To read more about distributor's taxes and the cannabis resale certificate, click here.
Below are the cities that are open for both recreational and medical distribution:
- Los Angeles City
- San Francisco
Long Beach is also open for cannabis distribution licenses, however, they are only permitting the distribution of medical cannabis. As of last year, there is a ban on adult-sue or recreation cannabis activities.