Beginning January 1, 2018, the state of California’s marijuana tax laws will change for distributors, cultivators, manufacturers and retailers of marijuana and cannabis products. The information outlines the process for collecting, paying and filing taxes under the new laws: Step 1: Secure Permits and Licenses Step 2: Register with California Department of Tax and Fee Administration (CDTFA) Step 3: Collect and/or Pay Taxes Step 4: File Taxes Background: On November 8, 2016 voters in California approved Proposition 64 (Prop 64), the “Control, Regulate and Tax Adult Use of Marijuana Act”. This proposition was designed to reshape the use and taxation of marijuana in the state in a number of ways including designating specific agencies to regulate and licenses of the marijuana industry in California. Prop 64 also impacts the collection and payment of taxes for the following marijuana business groups defined below:
Step 1: Secure Permits and Licenses
Under the new state law, marijuana businesses will be required to obtain licenses from the state agency listed above. The Bureau of Cannabis Control (BCC) is the agency developing regulations for medicinal marijuana use and those regulations should be available November 2017. Marijuana businesses are highly encouraged to apply for a temporary license from the BCC as soon as the regulations are available. The BCC will also issue temporary licenses which be effective January 1, 2018. In order to secure a temporary license through the BCC, a business must have authorization from a local government (city and/or county) to run a marijuana business in their local community. Temporary licenses will be good for 120 days from the date of issuance. This proposition imposes specific marijuana excise and cultivation taxes. Prop 64 was later amended by Senate Bill 94 (SB 94) which repealed the Medical Cannabis Regulation and Marijuana Safety Act (MCRSA) while defining the payment and collection of taxes. Below is the breakdown of tax collection and payment between distributors, cultivators, manufacturers and retailers: Step 2: Register with California Department of Tax and Fee Administration (CDTFA): All marijuana distributors, cultivators, manufacturers and retailers are required to register with the CDTFA for seller’s and tax permits. Seller’s and tax permits are different and require that businesses apply for separate permits. Below is information that will be required for businesses to provide when registering with the CDTFA:
The NAICS number for most medicinal marijuana businesses is classified the same as pharmacies and drug stores therefore the code is 44610. Manufacturers may fall under a different NAICS code, depending on their business activities. The manufacturer section offers additional business code information on their NAICS classification. Distributor: Marijuana distributors must collect the following taxes: cultivation, excise and sales from the cultivators, manufacturers and retailers.
All business equipment and supplies (computers, signage, etc.) are generally subject to sales tax. Most retailers will collect the tax at the time of purchase. If the distributor is not taxed but the seller of the equipment, they should include the purchase on the “Purchases Subject to Use” tax on the “sales and use tax return”. Supplies like wrapping for marijuana and cannabis products (ex: bags) may fall under resale. The Tax and Fees section of the BOE offers additional information on use tax. Cultivator: The cultivator must pay the manufacturer and distributor a cultivation tax.
Please note that cultivation tax rate may change. Beginning January 1, 2020, the CDTFA will be required to annually adjust the cultivation tax rate based on inflation. The cannabis distributor, manufacturer and retailer must provide the cannabis cultivator with a “timely” and “valid” resale certificate. If a resale certificate is not provided a sales tax will be applied to the sale and the cannabis cultivator must report and pay tax to CDTFA. The California State Board of Equalization (BOE) offers additional information on sale for resale in Publication 103.
The following are examples of items considered cannabis cultivator farm equipment and machinery:
Cannabis cultivators who qualify for partial farm equipment exemptions may also qualify for partial exemption on solar power equipment. The state issued a special notice on solar power farm equipment offering additional details.
Manufacturer: The manufacturer must collect taxes from the cultivator and must pay the distributor a cultivation tax.
Please note that cultivation tax rate may change. Beginning January 1, 2020, the CDTFA will be required to annually adjust the cultivation tax rate based on inflation. Documentation like a receipt or invoice with the following information must be provided for these transactions. The information below should be included:
Retailer: The retailer charges and collects sales tax on “taxable retail sales” marijuana and cannabis products as well as other products. They are also required to collect cannabis excise tax from customers and pay this tax to the distributor. Sales:
Exemptions: Effective November 9, 2016 certain sales of medicinal marijuana are exempt from sales and use tax as defined by the Business and Professions code. Some items included are: medical cannabis, medicinal cannabis concentrate, edible medicinal cannabis products or topical cannabis. Customer must provide their MMI and ID at the time of purchase. Retailers must keep an electronic or paper record of the following information for exempt transactions:
Retailers should not collect sales tax on these purchases and should claim a deduction on sales and use tax return for exempt medicinal marijuana and cannabis products sales. Purchases: Purchases made on products that will be resold can be made without paying sales or use tax. Retailers must provide the seller a “valid” and “timely” resale certificate. Out-of-state vendors may not apply the California state tax. In this situation the cannabis retailer is responsible for reporting and paying the sales or use tax when they file their return with the CDTFA. Items for use in a retail business like signage, scales, and computers are subject to sales tax at the time of purchase. Packaging and other supplies may be purchased for resale without paying sales tax. Step 4: File Taxes: All marijuana business owners must register for a seller’s permit and file sales and use tax returns. Distributors of marijuana and cannabis products must register for a cannabis tax permit and file tax returns regularly.
As of November 9, 2016, certain retail transactions will be exempt from the sales and use tax. The BOE lists examples and the process for recording tax exempt transactions in a “Special Notice”. Additional Information:
Currently, the City of Arcata, CA is accepting applications to obtain a permit for Commercial Cannabis Activity permit (CCAP). This application process began April 1, 2016. Anyone interested in a medical cannabis business within the City must go through the process outlined below: Step 1: Identify Permit Type Step 2: Gather Application Information Step 3: Write Operational and Logistical Plans Step 4: Submit Application to Initiate the Approval Process Step 1: Identify Permit Type: There are eight types of permits under the City’s CCAP process defined by the type of medical cannabis business. The following are the permit types: Cultivation (the chart below outlines the cultivation standards), Manufacturer 1 (nonvolatile solvents), Manufacturer 2 (volatile solvents), Testing Laboratory, Dispensary, Distributer, Transporter and Delivery. Cultivation Activities Defined by the Medical Cannabis Regulation and Safety Act (Note: Permits are for specific locations where the business operates, more than one location for the same business will require separate permits) Step 2: Application information: Full Arcata City Applications are available on the city website. The applications must include the following information:
Parking compliant with city regulations should be addressed in the site plan as well.
Step 3: Write Operational and logistical plans: All applications are required to include a full outline regarding how your marijuana business will operate. The following items must be included in your plans:
Other information including proposed activities, average amount of production and source of cannabis must be included in the operations plan.
Security breaches required to addressed as part of the security plan. The Arcata Police Department must be notified within 24 hours of noticing a security breach. In section 6.f of Exhibit A Resolution 167-29, the City defines the following as security breaches:
Step 4: Submit Application to Initiate the Approval Process:
The City of Grover Beach, CA is accepting applications for Commercial Medical Cannabis Business based on city ordinances Ordinance No. 17-05 and Ordinance No. 17-06 as of June 14, 2017. The application deadline for dispensaries has expired however the City is taking applications for Cultivation, Manufacturing, and Testing Laboratories. At this time Grover Beach does NOT allow Recreational Cannabis uses. Contact Information for all Commercial Medical Cannabis Business Related Questions: All Commercial Medical Cannabis Businesses will be required to complete the following steps: Step 1: Determine an Acceptable Location for a Commercial Medical Cannabis Business. Step 2: Complete the application process for a Cannabis Use Permit in the City of Grover Beach, CA. Step 3: Complete the application process for a Commercial Cannabis Permit in the City of Grover Beach, CA. Prior to applying:
Step 1: Determine an Acceptable Location for a Commercial Medical Cannabis Business Grover Beach allows Commercial Medical Cannabis Business in all three industrial zones:
Grover Beach, CA Zoning Map: http://www.grover.org/DocumentCenter/View/2749 All cultivation with storefronts shall be located a minimum of 600 feet from public and private schools grades kindergarten through 12th grade consistent with State law. All commercial cannabis uses shall be located a minimum of 100 feet from the CR2 Zone on the north side of Atlantic City Avenue as measured from the residential lot boundary to the industrial lot boundary. Step 2: Complete the application process for a Cannabis Use Permit in the City of Grover Beach, CA. All Applicants will be required to pay an application deposit that covers the costs acquired by the city when reviewing the Cannabis Use Permit application. The deposit amount will range from $6,000 - $10,000.
If the Cannabis Use permit is approved applicant may submit the application for the Commercial Medical Cannabis Permit Step 3: Complete the application process for a Commercial Cannabis Permit in the City of Grover Beach, CA. Commercial Cannabis Permit Application Checklist Commercial Cannabis Permit Application Fire and Life Safety Requirements The applicant must complete and submit the following:
The application process has officially started in City of Blythe, CA to obtain a Commercial Cannabis Business Permit as of September 18, 2017. Final applications must be received by 4:00 PM on November 17, 2017. The application process has been put in place pursuant to Resolution No. 2017-033. For questions regarding the application process call or visit:
235 North Broadway, Blythe, CA, 92225
Follow these steps to apply for a City of Blythe, CA Commercial Cannabis Business Permit: Step 1: Determine an Acceptable Location for a Commercial Cannabis Business (CCB) Step 2: Complete Criminal History Check (Live Scan) Step 3: Complete and Review the Application Process for a Commercial Cannabis Business (CCB) in the City of Blythe, CA. Prior to applying:
Step 1: Determine an Acceptable Location for a Commercial Cannabis Business (CCB) The application must include the address and a detailed description of the proposed Commercial Cannabis Business location (Note that proof of ownership, or a notarized letter of the owner’s willingness to lease will not be given any additional consideration until Phase 3). The applicant must also describe all sensitive uses described within six hundred (600) feet of the proposed location from the property line of a K-12 school, child daycare center, youth center, parks, places of worship and within 1000 feet of adult day care centers. The CCB must be in the appropriate zoning or have a proposed zone change and meet all the locational requirements as described in BMC Chapter 17.63E and BMC 5.10.290 (o) and BMC 883-17. Blythe Zoning Map: Locations of Commercial Cannabis Business Dispensaries will be permitted as follows:
All other Commercial Cannabis Businesses (other than dispensaries), including those permitted to engage in cultivation, manufacturing, testing, distribution of cannabis and cannabis products will only be permitted if all the following requirements are met:
Applicants will be required to obtain a “Zoning Verification Letter” from the Planner in the Planning Division in City Hall, to ensure that the location proposal the applicant is applying for meets locational requirements prior to submitting their CCB application. Sites with proposed zone changes to an allowed zone will be eligible for an approved zoning verification letter. The review process typically takes approximately ten (10) working days and will cost $122.33 The “Zoning Verification Letter” will need to be included with the application package. Please note the issuance of a “Zoning Verification Letter” does not mean the written evidence of permission given by the City of Blythe or any of its officials to operate a CCB, nor does it not mean “permit” within the meaning of the Permit Streamlining Act, nor does it constitute an entitlement under the Zoning or Building Code. A regulatory permit for regulating a CCB does not constitute a permit that runs with the land on which the CCB is established. Request for Zoning Verification Letters require a written request from the Planning Division and will not be completed over the counter since it may require additional research and review. Step 2: Complete Criminal History Check (Live Scan) City of Blythe Commercial Cannabis Employee/Owner Background Application
Step 3: Complete and Review the Application Process for a Commercial Cannabis Business (CCB) in the City of Blythe, CA. Blythe Commercial Cannabis Application Form Application Procedure Applicants must hand deliver a complete comprehensive and signed copy of the Blythe Commercial Cannabis Business Form, and all attachments along with a flash drive which contains one comprehensive and signed copy of the application in a pdf format, and payment of $3,680 starting on September 18, 2017, the initial application and fee must be received by November 17, 2017. Payment must be made by a certified check, cashier’s check or money order made payable to the City of Blythe. Application Fees are non-refundable. A complete application will consist of the following information:
The City Manager or designee shall administer the following three stage process for the screening and evaluation of Commercial Cannabis Business applications. The process for obtaining approval of a license to operate a Commercial Cannabis Business within Blythe, CA consists of the following three stages: Phase 1: Determination of Eligibility and Application:
All eligible applications will move onto Phase 2. Phase 2: Initial Ranking (1,500 Points) Applicants who scored a minimum of 80% in Phase 2 will move to Phase 3. Applications will be given a score based on the following criteria:
Phase 3: Second Ranking (2,500 Points) Prior to the scheduling of the interviews in Phase 3 each of the applicants will be required to have their proposed site inspected by the assigned City designee to ascertain current conditions of the facility. The second ranking will be scored based on the following criteria: After all the applicants from Phase 3 scores have been tabulated they will be combined with Phase 2 to establish a new ranking of the top applicants. The top applicants for each category as determined by the procedures shall move onto Phase 4 of the selection process for further consideration.
. Phase 4: City Manager’s Recommendations and City Council’s Final Approval This phase will consist of the following:
Please note: After the completion of the application interviews in Phase 3 and prior to the Selection Committees final review and evaluation, the City reserves the right to request and obtain additional information from any candidate who submitted a proposal. Upon the completion of the final review process, the Selection Committee will tabulate its final scores of the all applicants who were interviewed in Phase 3. The City Manager will present to the City Council the final ranking along with his/her recommendation in which the City Council may award up to the amount permitted by the Ordinance or Council Resolution pursuant to BMC Section 5.10.80 The City Council reserves the right to award a lesser number of permits, or to award no permits at all. Only those applicants on the final list will be eligible to be issued a permit from the initial permit process. The top Applicants which are being recommended by the City Manager for consideration to the City Council should be prepared to attend a City Council meeting in Blythe to provide a public presentation before the Mayor and City Council introducing their team and providing an overview of their proposal if requested by the City Manager. Calexico, CA is now accepting applications for Commercial Cannabis Regulatory Permits. Permits are being issued in accordance with Calexico Municipal Code chapter 5.96 and Ordinance 1178. All cities are different in what is required to operate a Commercial Cannabis Business. Guidelines have been put in place to protect the business owners, employees and the community that make up Calexico, CA. Retail cannabis sales within the City of Calexico, CA have been prohibited. The city will issue Commercial Cannabis Regulatory Permits for qualified applications in the following areas:
Steps to complete to obtain a Commercial Cannabis Regulatory Permit in Calexico, CA: Step 1: Review Commercial Cannabis Activity Regulatory Permit Application Checklist. Step 2: Review the Permitted Locations and Standards Step 3: Gather and Prepare Site Plan Supplemental Requirements Step 4: Complete Regulatory Permit Application At first glance these steps seem easy, there are some very detailed information that must be included and reviewed as part of the application. Applicants who are pursuing entry into the Commercial Cannabis Business in Calexico must ensure that they follow their due-diligence to gain the proper permitting. Step 1: Review Commercial Cannabis Activity Regulatory Permit Application Checklist
Step 2: Review the Permitted Locations and Standards The City of Calexico has outlined locations in the city where Commercial Cannabis Businesses can operate. Individuals who are seeking permits should carefully review zoning maps for permitted locations and city standards:
Calexico, Ca Zoning Map: Step 3: Gather and Prepare Site Plan Supplemental Requirements GENERAL INFORMATION MUST BE LISTED ON ALL SHEETS:
INFORMATION SPECIFIC to SITE PLANS (The site plan, drainage and grading plan, and landscape plan may be combined into a single plan as long as the details are legible):
ITEMS SPECIFIC TO PRELIMINARY GRADING AND DRAINAGE PLAN:
ITEMS SPECIFIC TO PRELIMINARY LANDSCAPE PLAN:
INFORMATION SPECIFIC To ELEVATIONS:
Step 4: Complete Regulatory Permit Application The City of Calexico, CA may authorize up to ten applicants per commercial cannabis activity category. The commercial cannabis activity categories permitted are cultivation, manufacture, testing, distribution, and transportation. Prior to initiating operations and as a continuing requisite to operating a commercial cannabis activity, the applicant shall obtain a validly issued CUP or enter into a fully executed development agreement agreed to by the city council. Each applicant may only apply for and operate up to two commercial cannabis activity facilities in the city. There is an application fee to be determined by resolution by the city council, an executed reimbursement agreement on a form provided by the city to fully reimburse the city for all fiscal impacts, costs, expenses, and fees, including but not limited to attorney fees and consultant fees, incurred by the city related to the commercial cannabis activity, and a deposit in an amount as provided for in the reimbursement agreement terms. Carefully review and complete the Commercial Cannabis Activity Regulatory Permit Application The application consists of the following:
As of October 2, 2017, Medical and Recreational Cannabis Businesses can now submit applications in the City of Woodlake, CA. Applications are being accepted in accordance with Woodlake Ordinance No. 611 and within approved zones in accordance with Woodlake Ordinance 612. Woodlake is accepting application for the following Cannabis Businesses:
Anyone interested in operating a medical cannabis business within the City of Woodlake, CA must have a Cannabis Regulatory Permit and must complete the City’s Conditional Use Permit process: Item 1: Complete Background Investigation Packet to Obtain Employee Permit: As part of the application process each applicant will be required to complete the Background Investigation Packet included in the application. Items that need to be completed as part of the packet at the Woodlake Police Department:
As part of the background investigation each owner will be required to submit a list of 5 references. The background Investigation needs to be completed by each owner and each employee. The grounds for denial of an Employee Permit can be one or more of the following:
Item 2: Application and Regulatory Fees for all Cannabis Businesses: There are several fees pertaining to the Cannabis Business Application and all fees must be submitted with the final application. If an application is approved and the business is operational, each business must pay an annual regulatory fee which will be used to monitor and confirm compliance with local and state regulations. Item 3: Acceptable Cannabis Business Locations in Woodlake, CA: Choosing the right location is critical for your business. Information on the facility location will be required when submitting the Woodlake Cannabis Business Application. Here is a list of information that is needed:
City of Woodlake Zoning Map: At a minimum the Cannabis Business location must comply with these building code operational requirements and restrictions:
Item 4: Complete the Specific Cannabis Business Application: DEADLINE November 3rd, 2017 All applications must be submitted in PERSON to the Community Development Department: Jason Waters Community Development Director City of Woodlake 350 N Valencia Ave Woodlake, CA 93286 559-564-8055 For Dispensaries Only the application process will be split into three phases: Phase 1 – Background Phase I requires each applicant to complete the Phase I background materials, which include the attached live scan form and commercial cannabis employee permit application, as well as an indemnification agreement to hold harmless the City of Woodlake. Each applicant will be required to submit to a criminal background investigation. Fingerprints and Photograph shall be required from each applicant as part of this process. Phase 2 – Application Requirements: All applicants must pass the background investigation to move on to Phase 2.
Phase 3 – Application Requirements:
Final Selection: Following an objective ranking of the above application materials, applicants may be invited for interview(s) with City staff and/or representatives. Following completion of the interview(s), City staff intends to bring forward for the City Council’s consideration up to two recommended facility operators. The recommended operator should be prepared to attend a City Council meeting in Woodlake in order to provide a public presentation before the Mayor and City Council introducing their team and providing an overview of their proposal. Currently the City of Hollister, CA is accepting applications to operate a medical cannabis facility. The application process is adopted per the Hollister Municipal Code (HMC) section 5.42.290(A). Follow these steps to apply for a Medical Cannabis Facility license: Step 1: Determine Location for Medical Cannabis Facility Step 2: Complete Criminal History Check (Live Scan) Step 3: Complete and Gather All Required Documentation for the Hollister Medical Cannabis Facility Application Form Prior to applying, review the information and learn about the application process and which documents you will need. Taking a good look at the entire application and ensure all the of required information is available. Step 1: Determine a location for Medical Cannabis Facility The application must include the address and a detailed description of the proposed Medical Cannabis Facility. The applicant must also describe all sensitive uses within a one thousand (1,000) foot radius of the proposed location and certify that the proposed location is not within six hundred (600) foot radius of a school whether it be public or private as described in HMC Section 5.42.160. The Medical Cannabis Facility (MFC) must be located in the appropriate zoning meet all of the locational requirements as in described in HMC Chapter 5.42. Hollister Cannabis Zoning Map: Pertaining to the proposed facility location, there are details that should be included in your business plan. Include as many details as possible regarding:
For additional information regarding the facility that will be used, review the Medical Cannabis Facility (MCF) application at www.hollister.ca.gov that will outline the following:
Step 2: Complete Criminal History Check (Live Scan) Any applicant listed on the application will undergo a Fingerprint-Based Criminal History Records Check conducted by the City Police Department pursuant to Section 5.42.060 of the Municipal Code; included will be a Live Scan and any indicated follow-up investigation; and each individual applying to be a principal of the MCF (“Principal”) must apply for a Live Scan criminal history check. By appointment only this process must be conducted by the City of Hollister. Contact Eva Foster by phone at (831)636-4330 or by email at efoster@police.hollister.ca.us in order to schedule your appointment. Due to limited staff resources, you are encouraged to schedule your appointment as early as possible in order complete your Live Scan requirement before the due date of the application. The City cannot guarantee that it will be able to accommodate applicants who do not attempt to schedule an appointment until near the application deadline, and the City is not responsible for applicants who are unable to schedule an appointment prior to the application deadline. There will be a Live Scan processing fee of $93 per person, which must be paid at the time of the Live Scan. The Live Scan process involves submitting fingerprints to the DOJ, which will review for criminal offender record information (CORI). CORI reports will be provided to the City of Hollister for the sole purpose of determining eligibility for operating a MCF. Principals who do not meet criminal history eligibility requirements will be disqualified. Step 3: Complete and gather all required documentation for the Hollister Medical Cannabis Facility Application Form Application for Medical Cannabis Facility License Application Procedure Applicants must hand deliver a complete comprehensive and signed copy of the Hollister Medical Cannabis Facility Application Form, and all attachments along with a flash drive which contains one comprehensive and signed copy of the application in a pdf format, and payment of $7,492, starting on March 15, 2017 for Dispensary Operations the initial application and fee must be received by 4:00 PM on April 17, 2017. Payment must be made by a certified check, cashier’s check or money order made payable to the City of Hollister. Application Fees are non-refundable. A complete application will consist of the following information:
The City Manager or designee shall administer the following three stage process for the screening and evaluation of medical cannabis facility regulatory permit applications. The process for obtaining approval of a license to operate a medical cannabis facility within Hollister, CA consists of the following three stages: Stage 1: Preliminary Determination of Applicant and Facility Eligibility The application is evaluated for completeness, including the execution of any required agreements accompanying the application form and the following documentation:
There is a review of evidence to determine that 75 percent of the applicants and managers of the medical cannabis facility are residents of the State and have been for at least three years immediately preceding the date of the application. All government issued identification will be reviewed to determine that each applicant, manager, and employee of the medical cannabis facility is over eighteen (18) years of age and that no applicant, manager, or employee of the MCF is a licensed physician making patient recommendations for medical cannabis. All eligible applications will move onto stage 2. Stage 2: Applicant and Facility Evaluation and Scoring A score ranking of 1475 Points will be required to move to Stage 3. Applications will be given a score based on the following criteria: Stage 3: Public Meeting and City Council Final Selection The City Council will make the final determination on whether to issue or deny medical cannabis facility regulatory permit applications according to the following procedure:
It is the right of the City Council to request and obtain additional information from any candidate who submitted a proposal. The City Manager will present to the City Council the final ranking in which the City Council may award at its discretion cultivation, manufacturing, distribution and testing but only two (2) Dispensary permits pursuant to HMC Section 5.42.290. The City Council reserves the right to award a lesser number of permits, or to award no permits at all. Only those applicants on the final list will be eligible to be issued a permit from the initial permit process. The top Applicants which are being recommended by the City Manager for consideration to the City Council should be prepared to attend a City Council meeting in Hollister in order to provide a public presentation before the Mayor and City Council introducing their team and providing an overview of their proposal if requested by the City Manager. Currently the City of Baldwin Park, CA is accepting applications to obtain a permit for Medical Cannabis Manufacturing and Distribution activities. This application process started September 14, 2017 and will last until further notice. This application process is a competitive process. Only 15 applicants will be selected for permit issuance. All fees paid are nonrefundable regardless of outcome. Anyone interested in operating a medical cannabis business within the City of Baldwin, CA must consider the following: Item 1: Primary Background Information As part of the application process each applicant will be required to submit a LiveScan/Background Check Authorization Form. In addition to completing the form the following will need to be submitted:
Essential Supplemental Information Required: Criminal history: Applicant must state that no Manager or Principal of an applicant has any violent or serious felony conviction(s) as specified in Sections 667.5 and 1192.7 of the Penal Code or any felony conviction involving fraud, deceit or embezzlement. Applicant must identify any pending criminal complaint(s). The Applicant must certify, as a condition of maintaining the permit, that it will not employ any person with any type of violent or serious felony conviction(s) as specified in Sections 667.5 and 1192.7 of the Penal Code or any felony conviction involving fraud, deceit or embezzlement. Applicants must certify as a condition of maintaining the permit that they will not employ as managers or employees any person with any controlled substance related misdemeanor conviction Item 2: Consider all Fees Pertaining to Submitting a Cannabis Permit Application All fees are to be paid by cashier’s check or money order and made payable to the “City of Baldwin Park”. Item 3: Acceptable Commercial Cannabis Business Locations Choosing the right location is critical for your business. Information on the facility location will be required when submitting the Baldwin Park Cannabis Permit Application. Here is a list of information that is needed:
Required Plan Submittals (Plans must be drawn to scale):
Please note that multiple sites can be considered per application. Attach proof of ownership or signed statement from the owner/signed lease agreement. Essential Supplemental Information Required:
City of Baldwin Park Cannabis Map: Item 4: Complete the Permit application and Essential Supplement Information Complete the Baldwin Park Cannabis Permit Application in addition to the background information, finding a location and paying the required fees. There are several pieces of Essential Supplemental information that must be submitted along with the application:
Currently the County of Monterey, CA is accepting applications to obtain a permit for all medical cannabis activities. This application process started November 9, 2016. Anyone interested in operating a medical cannabis business within the unincorporated area of the county must obtain the following: Step 1: Obtain and maintain a Use Permit/Coastal Development Permit Step 2: Obtain and maintain a Commercial Medical Cannabis Permit Step 3: Obtain and maintain a Business License Step 4: Comply with the self-reporting Commercial Cannabis Business Tax Law Multiple licenses and permits (stacking) Depending on the type of medical cannabis business there are different types of permits and business licenses required. Subject to State restrictions by license type. Chapter 3.5 of Division 8, of the California Business and Professions Code contains limitations on the number and types of licenses that may be held by one licensee. Section 19328 of the Business and Professions code allows a “licensee” to hold a state license in up to two separate license categories (e.g. Cultivation Type 3A and Manufacturing Type 6). Restrictions apply to the types of licenses that can be held at one time. The County may permit multiple cannabis businesses on one parcel (e.g. two or more businesses with separate premises on the same property) subject to Use Permit restrictions, and subject to limitations through future State regulations. Step 1: Obtain and maintain a Use Permit/Coastal Development Permit Cannabis related land use permits will begin with a Development Review Committee (DRC) application. Materials submitted with the application should address those items listed in Section 21.67.100 of the Inland zoning ordinance (Title 21) or Section 20.67.100 of the coastal zoning ordinance (Title 20). Application materials must also address requirements specific to the type of cannabis business activity requested. Cannabis operations must be located in the appropriate zoning district and may not be located within 600 feet of a school, park, or drug recovery facility. Please note: all cultivation must be within an existing warehouse or greenhouse that was legally established before January 1, 2016, and all operations and development must comply with all relevant County land use and development standards. File all applications for a Use Permit for a commercial medical cannabis activity with the Resource Management Agency/Planning on the form. Every application must have the following documentation:
Additional application requirements - The Director of Planning may require additional information depending on the type of Commercial Medical Cannabis activities:
Detailed inland requirements can be found here: https://www.municode.com/library/ca/monterey_county/codes/code_of_ordinances?nodeId=TIT21ZO_CH21.67COMECAAC Step 2: Obtain and maintain a Commercial Medical Cannabis Permit Permit Application File all applications for a commercial medical cannabis permit with the Resource Management Agency/Planning on the form. In all cases the application must have the following documentation:
Application materials for a Commercial Medical Cannabis Permit must contain all of the information required by Section 7.90.050 of the Monterey County Code. Chapter 7.90 can be found here: https://www.municode.com/library/ca/monterey_county/codes/code_of_ordinances?nodeId=TIT7BUTALIRE_CH7.90COMECAPE FEES: The fee for a Commercial Medical Cannabis Permit application is a deposit fee. The County will track time invested on each permit application and refund the amount of the deposit not used or bill the applicant if County costs for processing the permit exceeds the deposit amount. A fee for renewal of a Commercial Medical Cannabis Permit will be due annually. Step 3: Obtain and maintain a Business License If the Board of Supervisors adopts an ordinance establishing Business License requirements, an annual business license will be required. Business Licenses are not issued until all required County approvals (Use Permit/Coastal Development Permit and Commercial Medical Cannabis Permit) and State licenses, when applicable, have been obtained. Fees and application requirements will be established by the Treasurer/Tax Collector for Business Licenses if and when a Business License Ordinance is adopted by the Board of Supervisors and becomes operative.
Step 4: Comply with the self-reporting Commercial Cannabis Business Tax Law Beginning January 1, 2017, anyone engaged in commercial cannabis business activities as described in MCC Section 7.100.030(A) and (B) shall be subject to the annual tax. These activities include cultivating, dispensing, producing, processing, preparing, storing, providing, donating, selling, or distributing cannabis in the unincorporated area of the County. This includes operations currently engaged in commercial cannabis business activities that have not yet obtained the required County permits or state licenses. Anyone engaged in commercial cannabis activities, as stated above, shall immediately self‐report such activities to the Monterey County Resource Management Agency (RMA) ‐ Planning Services using the Treasurer‐Tax Collector’s Commercial Cannabis Business Tax Self Reporting Form. The commercial cannabis business shall disclose the type, nature, location, and size of the cannabis operation. The completed self-reporting form should be emailed to cannabis@co.monterey.ca.us. If mailing hardcopies, please send to: Monterey County RMA c/o Jackie Nickerson, 168 W Alisal, 2nd Floor, Salinas, CA 93901. Commercial Cannabis Business Tax Administrative Rules and Procedures found here: http://www.co.monterey.ca.us/home/showdocument?id=2355
Currently the city of Long Beach, CA is accepting applications for NEW medical marijuana cultivation, lab testing and manufacturing facilities. Beginning 9/1/2017 Long Beach will start accepting distribution applications as well. Applications are accepted on a first come first serve basis Monday-Friday, 7:30 AM – 4:00 PM. The Long Beach Application process is very complex. Individuals should consider hiring assistance to manage, organize, and write the application. Details regarding the specific rules can be found in the Long Beach Municipal Code Chapter 5.90 . At this time, there is no application deadline. Applications should be submitted in-person to: Long Beach City Hall 4th Floor Business License Counter 333 W. Ocean Blvd, Long Beach, CA 90802 7:30 AM – 4:00 PM Individuals seeking to obtain a Medical Marijuana Manufacturing Business License in Long Beach, CA can start by following 4 important steps: (Step 2-4 must be submitted in order). Step 1: Identify an acceptable medical marijuana manufacturing facility location. Step 2: Completing the application for a NEW Medical Marijuana Business License. Step 3: Complete the Manufacturing Supplemental Information Form. Step 4: Develop a Manufacturing Operations Plan. Step 1: Identify an acceptable medical marijuana manufacturing facility location: Applicants identifying an acceptable property should be aware that the Long Beach Marijuana Code 5.90.030 has put forth the following restrictions that must be adhered to:
The Planning Bureau will review the previous and proposed use of the property as well as the parking requirements. The following are required by the Planning Bureau:
Required # OF Parking Spaces: 2 per 1,000 square feet of Gross Floor Area Medical Marijuana Buffer Map: Department Reviews and Inspections:
When applying, applicants will be required to pay an application fee: # of Owners and Business Managers: Application Fees 1: $200.45 2: $345.45 3: $490.45 4: $635.45 5: $780.45 6: $925.45 ***Checks should be made payable to the “City of Long Beach” *** ***Application fees are non-refundable. If applicant is not successful in obtaining a license, a refund may be requested by emailing a completed Refund Request Form to lbbiz@longbeach.gov *** Application Checklist Overview: Medical Marijuana Business License Application (item details found on application).
Live Scan:
License Taxes:
Step 3: Complete the Manufacturing Supplemental Information Form. In addition to the Medical Marijuana Business License Application the Supplemental Information Form will require the following information:
Step 4: Develop a Manufacturing Operations Plan. All medical marijuana manufacturing businesses are required to submit an operating plan. At a minimum, the operating plan must meet the requirements as set forth in LBMC Chapter 5.90. Any statements made in the Operating Plan may not supersede any local and/or state laws, rules, and regulations. For each section of the Operating Plan a cover sheet is required and each section should be clearly labeled. The operating plan must have page numbers in the bottom right hand corner. DO NOT staple or bind the operating plan. You may submit the Medical Marijuana Business License Application and the Manufacturing Operating Plan in a three-ring binder or in an envelope. Both the Medical Marijuana Business License Application and the Manufacturing Operating Plan must be submitted at the same time. The Operating Plan must include the following areas: General Description of Services – a summary of the proposed business model:
Extraction Method – If performing on-site extractions provide a description of the extraction method:
Noxious Chemical Control – It is important to describe what methods will be used to ensure that odor generated inside the manufacturing facility is not detected outside the business premises.
Toxic Material – Provide a description of all toxic, flammable, or other materials that will be used or kept at the medical marijuana business, the location of such materials, and how such materials will be stored. This includes all materials regulated by a federal, State, or local government that would have authority over the business if it was not a marijuana business.
Quality Control – Describe the manufacturing quality control procedures that will be employed by the business to ensure that marijuana products are safe and suitable for human consumption and/or use.
Security - Provide a detailed description of their security plans. The security component should be broken down into operational and facility security categories.
Operational Security - Detail the operational security including but not limited to general security policies for the facility, employee specific policies, training, sample written policies, transactional security, confidential information security, visitor security, 3rd party contractor security, and transportation security.
Facility Security - Applicants should provide a description of the overall facility security.
Digital Video Surveillance - All Medical Marijuana Businesses must install and maintain a fully operational digital video surveillance and camera recording system. The video and surveillance system shall, at a minimum, meet the following requirements:
Any security measures that exceed these standards are highly desirable. Product Tracking and Disposal - Identify how marijuana will be tracked and monitored to prevent diversion and theft.
Product Complaints - Describe policies for receiving, recording and handling product complaints associated with the use of marijuana products provided by the manufacturing facility. Policies may include:
Product Rejection/Recall Describe the steps that the manufacturing facility will take when notified from a testing agency or City Health Official that the tested marijuana product does not meet appropriate health standards.
Fire Plan - Applicants should provide a detailed description of their fire prevention, suppression, alarm and life safety systems.
Employee Safety & Hygiene - Provide a summary of the safety protocols that will be adopted by the manufacturing facility, including, but not limited to: staff training, protective equipment, hazardous material handling, emergency communication/response protocols, etc. Businesses must conform to all Cal OSHA workplace safety standards, specifically Title 8 of the California Code of Regulations.
Community Involvement - Provide a detailed description of their plans to participate in community service within the City of Long Beach.
The citizens of the City of San Bernardino opted to adopt California Proposition 215 (Compassionate Use Act) and starting accepting licenses as of June 5, 2017 for marijuana business permits. This comes well over 6 months after voters approved Measure O, San Bernardino Regulate Marijuana Act of 2016. Measure O stipulates that applicants who wish to submit a Medical Marijuana Business Permit be for a property that is at least 600 feet from residential zones. To equip applicants for cultivation, manufacturing, testing, transportation or distribution, analysis has been completed by the city to best identify the viable business locations. Yet, there is more than just the business type and property location to consider when applying.
There are some pending legal arguments against Measure O, but of the 4 pending only 2 of them are being considered as having any merit. The City will continue to keep you informed of its progress, but feel free to visit the San Bernardino city web site periodically for updates. Step 1: Identify a Permissible Property Location Maps and matrixes are provided by the city of the viable locations approved for cultivation, manufacturing, testing, transportation and distribution. The city refers to the permissible areas as M-B Overlay 1 and M-B Overlay 2. The allowable locations for applicants are not only identified via the additional maps and matrix resources, but each plotted area is assigned an “Assessor Parcel Number” (APN). Of those APN’s note as follows:
It should be noted that an APN # is a requirement as part of the application process, and will need to be reference on the application form. This is in addition to the property address, zoning district, general plan designation and which of the two M-B Overlays the location is listed within.
Step 2: Prepare the Project Information Profile
Applicants must complete the standard Marijuana Business Permit Application as well as provide supplemental information depending on the license type. Prior to submission, it is recommended the Measure O guidelines be fully reviewed, as there are some additional requirements articulated on the requirements of the operating business. General application requirement checklist:
Once the application is approved there are additional permit fees that are at a minimum of $250 annually and an additional $1 per square foot of operating space. Site Plan [1” = 10’] (Quantity of 3 Copies): It should be noted that no marijuana business shall be allowed to operate out of any temporary or portable structure.
Floor Plan [1/4” = 1’] (Quantity of 3 Copies):
Area Map [1” = 50’] (Quantity of 3 Copies):
Business Plan (shall contain a minimum of the following information):
For further details and the application form, go the City of San Bernardino’s web site and their Marijuana Business Permit Application. On the same site, there’s an additional form available for their live scanning capabilities. Marijuana Business Live Scan Form will initiate the Live Scan Fingerprinting services which is a technique used by law enforcement agencies and private Live Scan Service Providers. The technology electronically captures fingerprints (and palm prints at designated agencies) without using ink and/or paper. Since this form is available, applicants should be prepared for the following:
While there are no deadlines, or caps on the number of permits being offered, applicants will see limits based on available real estate. Early preservation of compliant properties will be key to obtaining permitting in the City of San Bernardino along with the appropriate prerequisites through the state and background check approvals. Contact Info: Applicants can sign up to receive email updates regarding the implementation process and status by contacting Stephanie Sanchez at Sanchez_Stephanie@SBCity.org or 909-384-7272 x.3343. Application questions should be directed to Planning Division Associate Planner Travis Martin at Martin_Tr@SBCity.org or 909-384-5313 inclusive of questions on application fees. Other City Resources: City Council Resolution 2016-177 Measure O full text initiative packet Measure O Interactive Map County of San Bernardino Elections Office of the Registrar of Voters election results Santa Rosa is accepting medical cannabis applications for Cultivation, Distribution, Manufacturing, Testing, and Transporting businesses. Dispensary applications are not being accepted. There is no limit on how many licenses will be offered. Rather, Santa Rosa is using the availability of real estate as the method to cap the market.
To provide a status on medical marijuana businesses, the Santa Rosa Planning and Economic Development Committee published the Cannabis Permitting Update. This report tracks the number of new medical cannabis businesses in Santa Rosa. Highlights of the report includes the following items:
For those who are looking to gain entrance into the Cannabis Industry, this city is an excellent place to secure a foothold in due to their friendly approach to marijuana businesses. The City of Santa Rosa is a leader in marijuana regulations allowing for an open market – due to these factors it is likely that in years to come, they will become a hub in the marijuana industry. There are 3 steps to start your Cannabis Business in Santa Rosa.
Step 1: Find an Open Parcel that Meets Zoning Requirements Despite low vacancy rates, Testing Labs may find opportunities to find real estate in the CO – Office Commercial Zone and Business Park. Distributors or Manufacturers can apply for permitting in the Business Park, Light Industrial Zone, or the General Industrial Zone. Applicants should avoid the Limited Light Industrial (-LIL) Combining District for medical cannabis commercial cultivation because Santa Rosa recently adopted an urgency which imposes a temporary moratorium in this district. Full details regarding which license types can operate in each zone be found in the Medical Cannabis Land Use Policy Chart . This contains a matrix which contains a matrix of license by zone. Applicants can also use a visual reference with the Map of Areas Zoned General Industry, Light Industry, Business Park, and Office Commercial. More details regarding zoning can be found on the city website under Commercial Cannabis Resources. Step 2: Submit to the City a Conditional Use Permit If you are able to find an open parcel that meets the criteria, the next steps to obtain cannabis permitting would be to file for a Conditional Use Permit. Businesses that are less than 10,000 square feet will submit for a Minor Permit with a fee of $2,511 and business that are more than 10,000 square feet will submit for a Major Permit with a fee of $10,964. In addition to the fees, when submitting the CUP application, you must include the following:
For new construction, you must submit the following additional information:
Step 3: Apply for a Building Permit In parallel with the CUP submission, applicants must apply for a building permit. Applicants must adhere to the regulations of the City of Santa Rosa Building and Fire Division Requirements to gain approval and pass the inspection of medical marijuana-related occupancies. Information regarding the Building Code Requirements, Accessibility Requirements, Fire Code Requirements, Electrical Code Requirements, Mechanical Code Requirements, Plumbing Code Requirements, Energy Code Requirements, and CalGreen Code Requirements can be found in the City of Santa Rosa Building and Fire Division Requirements. Below are the General Requirements and Medical Marijuana Regulation and Safety Act Permit Specific Requirements. General Requirements
The requirements in this section are related to specific permit types as outlined in the California State Medical Marijuana Regulation and Safety Act (MMRSA) Cultivation Facilities (MMRSA permit types 1-4) – Annual Fire Department Operational Permit Required
Manufacturer Facility (MMRSA permit type 6-7) – Annual Fire Department Operational Permit Required
Testing/Laboratory (MMRSA permit type 8) – Annual Fire Department Operational Permit Required
Distributor (MMRSA permit type 11) - Annual Fire Department Operational Permit Required Type 11 Distributor facilities are to meet CBC, Chapter 3 requirements based upon Use and Occupancy Classification for a Storage Group, S, Occupancy. CBC § 311.1.
Transporter (MMRSA permit type 12) Type 12 Transporter facilities are to meet CBC, Chapter 3 requirements based upon Use and Occupancy Classification for a Storage Group, S-1, and/or Business Group, B, Occupancy. CBC § 311.1.
The City of Santa Rosa is paving the way to become a fully regulated and open cannabis market. For those who are seeking more information, the ordinance can be found in Chapter 10-40 of the City Code and applicants can reference the Medical Cannabis FAQ’s published by the city. The cannabis industry is growing in Los Angeles County. With the introduction of retail cannabis, new opportunities emerged for dispensaries and retailers. When opening a new dispensary or marijuana related business, you are likely to face a few challenges. One of these challenges is passing through the maze of bureaucracy to secure your permit.
Our clients often ask how they can work with local government to start a cannabis related business in cities where none exist. Usually these cities are in the process of forming local regulations and there is not a clear path for the new business. Although Proposition 64 passed November 2016, many counties in Los Angeles have not yet settled on local regulations. LA county boasts 88 cities. Nine counties established their permit granting system and six counties offer limited permits. That just scratches the surface. 63 LA cities banned retail cannabis, while others are still on the fence. Uncharted territory still exists. Ten cities have nothing on the books. This means these cities have not come out either for or against local retail. These cities offer great opportunity and great risk for new business. These uncharted cities represent 7% of the population in LA county, they include:
How To Start A Cannabis Business In Los Angeles County Markets That Are Not Yet Open Keep in mind that opening a retail cannabis dispensary is not for the faint-of-heart. You are a pioneer in an emerging, yet controversial industry. You set the pace in building the industry’s reputation. You face challenges if you want to open a cannabis business in one of the cities with no laws on the books. You are traveling without a map and aiming for an ever moving target. “The fact that there’s a moving target at the state level makes it way more challenging for folks to develop thoughtful, comprehensive, local ordinances,” according to an article published in KQED News Local governments have some freedom in regards to cannabis zoning laws and business licensing, according to the California State Association of Counties. “Proposition 64 allows local governments to regulate nonmedical cannabis businesses through zoning and other laws, such as requiring businesses to obtain local permits or licenses in addition to state licenses. Since so much is up to the discretion of local government officials, it is even more important that cannabis entrepreneurs represent the industry well. We compiled tips to help. 1. Maintain a Professional Approach and Appearance First, always strive to present yourself and the industry in a competent and professional manner. You may find you see better results when you appear competent, responsible, and trustworthy. This is especially true when you represent an industry that is unfamiliar to many decision makers and citizens. "Look like an entrepreneur. I try to dress like an entrepreneur. I don’t want to be associated with a traditional cannabis-stoner business owner, because that is all that the mainstream public has seen." 5 Tips for Breaking Into the 'Budding' Marijuana Industry, Entrepreneur The officials in the undecided counties may have concerns about the industry. It is up to you to address these concerns and persuade these officials that your dispensary will not create public nuisance or public safety hazards. 2. Do Your Homework and Research Your Potential City Call to enquire about current and new policies Retail cannabis laws are a work in progress. Reach out to the officials in your chosen city to learn up-to-date information. Do your homework before you make the call. Inform yourself on the industry throughout the state and about the unique culture of the city. Before you reach out, educate educate yourself on state laws, federal laws, and best practices from other cities and in states like Colorado, Oregon, Washington, and Nevada. Look up data on public sentiment from research institutions like the Pew Research Center and other credible think tanks. The more information you have going in, the more likely decision makers are to listen to you. They may even appreciate your expertise. "At any level of government, public officials who regulate marijuana are likely to find themselves trying to answer questions about numbers they may or may not have — has driving under the influence increased or decreased since marijuana became legal? Have crime patterns changed? How much money is coming into public coffers, and is it growing?" - Government Technology Magazine Build relationships with decision makers and influencers In any business, relationships are essential. This is even more true in a new industry. Build relationships in the local government, local business scene, and in the industry throughout the country. Be known as someone with integrity as this will make it easier to establish your dispensary. Research the city council. Have any of the current council members taken a stand on retail cannabis? Which members may pose an obstacle? Which members may be open to learning more about the industry? Reach out to any sympathetic council members. Sometimes people ask us how they should approach city council members for outreach. Every modern city lists city council members on the city website. Usually the listing includes email addresses, office telephone numbers, or even Twitter or other social media handles. Tips:
Four Questions To Ask When You Reach Out When you reach out to government offices, licensing bodies, and city councilors ask a few key questions. These questions are just a starting point, they will help you determine how open they are to the cannabis industry.
Tips for a persuasive proposal:
Four Topics to Address in Your Proposal
While not specific to the cannabis industry, the citizen advocacy organization Citizens.org compiled a simple guide to reaching out to city council members. Please keep in mind that local government planning divisions typically require their own permit application forms. The proposal described supports your case as you meet and talk with local city council members, planning commissioners, and city staff. Be a visible advocate and resourceAttend city council meetings and pitch your proposal at the appropriate time. Listen carefully to any discussions and offer yourself as a resource to answer questions about the industry and to clarify any misconceptions. You may find more success if you avoid using drug culture related jargon, instead use general and business related language. How To Choose A Potential Location in LA County For Your Cannabis Business In many ways, choosing a location for a successful dispensary is similar to choosing the right location for any retail business. “For starters, planting seeds in the cannabis economy with a retail outlet takes retail business know-how.” - - Entrepreneur article “How to Plant the Seeds of Success in the New Cannabis Economy.” Starting any new business is risky. Cannabis related businesses have the advantage of being in an emerging growth market. However, according to the Small Business Administration (SBA) around half of all new small businesses survive the first five years of operation. Like any retailer, there are five questions to ask when choosing a potential location:
Those questions specifically address retail establishments, similar questions apply to any cannabis related business. A cannabis retailer has an added challenge as it is difficult to research market demand for a product that was previously illegal. The process is similar to researching the interest in a new invention or brand new product. You may also want to look at the city’s history with cannabis issues. You may want to research answers to these four questions:
Establishing a new business is always a challenge. It is even more challenging when you are also helping establish a new industry! Sonoma County began accepting permit applications for commercial and medical cannabis business on July 5th, 2017. The Sonoma County Cannabis Program outlines the most current information regarding the application process. Currently, they are offering permits for medical Indoor and Outdoor Cultivation, Dispensaries, Distribution and Transportation, Manufacturing, Nurseries, and Testing Facilities.
Sonoma County is cannabis-friendly, and even offers a new business Cannabis Business Readiness Guide to those who are looking to gain entry into the market. In the coming months, they are even offering workshops to prepare individuals for entry into the market. The Sonoma County Cannabis Calendar has a Cannabis: Outdoor Cultivation Zoning Permit Workshop, Medical Cannabis Dispensary Health Permit Workshop, Edible Medical Cannabis Manufacturing Site Permit Workshop, and Cannabis Pesticide Permit Workshop on the books. These workshops promise to bring information regarding the permitting process and key tips to remain compliant. While friendly to medical use, it is important to point out that the County currently prohibits nonmedical or “recreational” commercial cannabis uses, with the exception of up to six plants not exceeding 100 sq. ft. for personal use per residence. It’s likely that as they gain a full grasp of the medical cannabis regulations, they will allow for expansion into the recreational space. Next, Sonoma County is looking to develop the local economy. They are offering priority to applicants who are able to demonstrate 1 of the 2 following criteria:
All applicants will be subject to annual inspections and permitting. Additionally, applicants must be 21 or older, will be subject to background screening, and must be in compliance with all occupational safety requirements (Cal/OSHA, wage and hour laws, etc). Below is a summary of the requirements for each type of permit available. Permits can be submitted to the address below. Permit Sonoma 2550 Ventura Avenue Santa Rosa, CA 95403 Cultivation and Nurseries Those interested in operating a cannabis cultivation or nursery site will require a Cannabis Use Permit. There are different requirements depending on the cultivation type. Building, Well, and Septic Permits will be applicable from Permit Sonoma which may include the Groundwater Well Monitoring Covenant and Easement Fillable Form and Instructions for completing Groundwater Easement Form. A fire review and inspection will be required to review all cannabis cultivation applications to ensure that structures meet certain criteria. The Department of Agriculture/Weights and Measures will inspect all cultivation sites, whether the operator’s permit is issued by Permit Sonoma or the Department of Agriculture. The following Cultivation and Nursery Permits are available: Indoor and Mixed Light Zoning Permits Permit Sonoma issues indoor and mixed light zoning permits. Application: Cannabis Cultivation Permit Application PJR-123 Outdoor Zoning Permits – Up to and Including 10,000 Square Feet The Department of Agriculture/Weights and Measures issues outdoor cottage permits in the agricultural zones (Land Intensive Agriculture or LIA, Land Extensive Agriculture or LEA, and Diverse Agriculture or DA) and outdoor grows up to 10,000 square feet in the LEA and DA. Zoning permits are ministerial and will be issued once it can be verified that the operation meets all the standards within the ordinance. See Cannabis Permits from Agriculture, Weights & Measures Outdoor Use Permits – 10,001 Square Feet or More A use permit is a discretionary permit and Permit Sonoma will review each application and condition on a case-by-case basis. Each permit is subject to public notification and environmental review. A minor use permit may be approved administratively without a public hearing if one is not requested by the public. Application: Cannabis Cultivation Permit Application PJR-123 (PDF: 235 kB) Review the Sonoma County Cultivation Site and Nursery Site for additional details. Cultivation centers must also take into consideration the following requirements: Site Development Criteria
Pre-Operational Requirements
Dispensaries The County has been issuing land use permits for dispensaries since 2007. No more than 9 medical cannabis dispensaries can be permitted within the unincorporated county at any one time. There are currently 5 dispensaries in operation and 3 applications are pending. Dispensaries are medical only and can only sell cannabis and related products to patients with a valid medical recommendation. Delivery operations must be connected to a brick and mortar dispensary. Cannabis dispensaries are allowed in the urban commercial zones (C1, C2, and LC) and will require a use permit from Permit Sonoma. A use permit is a discretionary permit and each application is reviewed and conditioned on a case-by-case basis. Each permit is subject to public notification and environmental review. Application: Cannabis Supply Chain Business Use Permit Application PJR-124 Visit the Sonoma County Website for more information regarding the application process for dispensaries. Distribution and Transportation Cannabis distributors and transporters are allowed in most industrial zones (MP, M1, and M2) and will require a minor use permit from Permit Sonoma. A use permit is a discretionary permit and each application is reviewed and conditioned on a case-by-case basis. Each permit is subject to public notification and environmental review. A minor use permit may be approved administratively without a public hearing if one is not requested by the public. Fire and Emergency Services will review all distribution and transportation permit applications to ensure compliance. Applications can be found here: Cannabis Supply Chain Business Use Permit Application PJR-124 Manufacturing Applicants who are interested in operating a cannabis manufacturer will require a Cannabis Land Use Permit. Cannabis manufacturers are allowed in the industrial zones (MP, M1, M2, and M3) and will require a minor use permit from Permit Sonoma. A use permit is a discretionary permit and each application is reviewed and conditioned on a case-by-case basis. Each permit is subject to public notification and environmental review. A minor use permit may be approved administratively without a public hearing if one is not requested by the public. As required, Building, Well, and Septic Permits required. Fire and Emergency Services will review all manufacturing permit applications to ensure compliance. Applications can be found here: Cannabis Supply Chain Business Use Permit Application PJR-124. Edible manufacturing businesses will require a permit from the Department of Health Services which can be found here: Permit for Edible Medical Cannabis Product Manufacturing Site. Testing Labs Those interested in operating a cannabis testing lab will be required to obtain a Cannabis Land Use Permit from Permit Sonoma to operate in the industrial zones (MP, M1, M2, and M3) and a conditional use permit to operate in certain commercial zones (C3 and LC). A use permit is a discretionary permit and each application is reviewed and conditioned on a case-by-case basis. Each permit is subject to public notification and environmental review. A minor use permit may be approved administratively without a public hearing if one is not requested by the public. Fire and Emergency Services will review all distribution and transportation permit applications to ensure compliance. More information can be found in the Test Lab Section on Sonoma County Site. The City of Adelanto began accepting Medical Cannabis applications on July 6th, 2017. Details of the application process have been provided by the Planning Division. The city published a Medical Cultivation Ordinance and a Dispensaries Ordinance to outline the rules for each license type. The biggest difference between license types is where the businesses are zoned to operate, otherwise the application process is identical. Individuals seeking entry into the Cannabis Industry in Adelanto should follow 4 key steps.
Step 1: Identify a Property Cultivation, Manufacturing, Transportation, and Testing Properties For Medical Cannabis Cultivation, Manufacturing, Transportation, Distribution, and Testing applicants should look for properties within the Manufacturing/Industrial (M1) or Light Manufacturing (LM) zoning designation in the Industrial Park. Applicants should avoid any property that is within a 2,500 foot radius of a school, public playground or park, child care or day care facility, youth center, or church, or as further amended by City Ordinances. Dispensary Properties Medical Cannabis Dispensaries applicants should look for a property within the designated Medical Cannabis Dispensary Zones The property cannot be within 600 foot radius of a school, public playground or park, child care or day care facility, youth center, or church, nor within 500 feet of a residential property, or as further amended by City Ordinances. All medical cannabis dispensaries must comply with Section 17.80.120 of the Adelanto Municipal Code (Ordinance No. 553). Step 2: Construct a Compliant Building
For the City of Adelanto, a secure facility is critical to pass inspections to gain Medical Cannabis licensure. During the construction phase, applicants must build the facility with the following criteria in mind:
Step 3: Draft an Operations Plan that Adheres to Adelanto Laws In the Application, applicants must read and acknowledge the laws related to operating in Adelanto. Some of the key rules are below and should be accounted for in the Operations Plan.
Step 4: Complete an Application Applications cost $7,000 each and permits are available for Cultivation, Manufacturing, Distribution, Transportation, Testing, and Dispensaries. The process and application for each license type is identical. The application is available here. Applicants need to submit the following items to the city for consideration:
The city does not mention a cap on the number of licenses being offered. Rather, it is likely that available real estate will be quickly consumed by applicants creating a natural cap on the market. Those who are interested in obtaining a cannabis permit in the City of Adelanto should secure real estate now to expedite the application preparation process. Looking to open a marijuana business in Orange County?
With 41 incorporated cities in Orange County, 31 cities have banned marijuana businesses from operating. However, 4 cities do not currently have any marijuana rules on the books. This means that they have not indicated whether they are for or against operating a marijuana business. If managed correctly, these cities could provide a perfect opportunity to potentially strike a deal to open your canna-business. Step 1: Call to inquire Calling or emailing a municipality is an excellent way to understand if the city may or may not be entertaining the idea of having marijuana based businesses. Prior to contacting the city, you should research the city website for City Council members. Often the City Council is comprised of the Mayor and other members who are elected by registered voters of the City. It may be helpful to contact 1 or more of those individuals to express your interest. For this initial discussion remember that first impressions are key, all correspondence should be professional in nature. Avoid stoner terminology and speak about the mutual opportunity between your company and the city. You should talk about the proposed relationship as a mutual partnership and indicate that you would like to operate a fully compliant business. Some questions to ask:
Step 2: Create a proposal Often medical marijuana businesses are regarded and banned in cities because it is considered to be a public nuisance. When approaching a city for consideration for a marijuana based business, it will be important to demonstrate how your company will NOT become a nuisance and show the value you are going to provide to the community. Be professional and specific on what type of license you are looking for when contacting potential cities. In your proposal, you should create an outline of the benefits for the city. Some items to consider including in the proposal are the number of jobs created, potential city revenue, and a community benefits plan. Your community benefits plan may include city activism, fundraising, or food drives. Express your desire to stay away from schools and parks. Demonstrate how you intend to control security and provide a safe business. Show why you believe in marijuana as a medicine and talk about the benefits that safe access has for patients. Step 3: Attend the next council meeting Most councils meet 2-3 times per month. Often these days and times are posted and maintained on the city website. Hopefully with your initial contact you were able to secure a place on the agenda. If not, council meetings are open to the public. You are welcome to attend and listen to any meeting. If given the opportunity, stand-up to make your case to the council. Ask if they would consider a compliant, professional partnership with the right marijuana company. Keep in mind that you are there not only as an entrepreneur but as an educator and advocate. As a member of the Cannabis Industry, you have to generate a healthy discussion about cannabis to dispel myths and fears that opponents have created over the years. Respond to questions politely with respect to the person asking the question. If you can’t make the city comfortable with your answers, it’s unlikely you will be allowed to operate. At the end of the meeting, plan on networking with the attendees. Your company must be seen as a resource to the city – not as the source of a criminal empire. Taking time to network and build relationships will pay dividends in the end. Finally, don’t be discouraged. Change does not happen overnight, and perhaps your compassion for marijuana will inspire others that marijuana is and should be normal. Cities in Orange County without Marijuana Policies in Place Below are the city websites and contact information for each city in Orange County who have not yet adopted a local ordinance regarding marijuana businesses. Without a written policy in place, it is an opportunity to create relationships with the City Council to collaborate and potentially come to an agreement regarding your business. While none of these steps will guarantee a license approval, they do provide the chance to make the case to the city. No postings Coto de Caza (949) 443-1323 http://www.orangecounty.net/cities/cotodecaza_services.html Irvine (949) 724-6000 http://www.cityofirvine.org/ Orange (714) 744-2225 http://www.cityoforange.org/ Seal Beach (562) 431-2527 http://www.sealbeachca.gov/ On a weekly basis, we get anywhere between one to two dozen new potential clients asking us about insurance. Whenever members of the marijuana and cannabis industry seek professional services, it helps to understand the right questions to ask, and the different types of insurances that are available to you.
Take These Two Steps Before You Seek Insurance 1. What Risks Are Associated with Your Business Since you have intimate knowledge of your business, consider the risks associated with your situation. This varies among states, but consider whether any of your customers or clients come from other states. A grower faces different risks than a dispensary. If you create Cannabis-infused products or edibles you face another unique set of challenges. The first step to finding the right insurance is to educate yourself on the laws, regulations, and social norms in your area. Doing so, generally involves seeking professional advice from attorneys, accountants, and other professionals in your field. 2. Ask Your Professionals for Recommendations or Referrals Your legal and financial professionals may even be able to refer you to well-reputed insurance companies with expertise in the cannabis industry. The uncertain legal status offers a unique challenge when sourcing a comprehensive insurance plan. Because insurance companies depend on federal licenses, most do not insure cannabis companies. Insurers fear that doing business with a firm that works in cannabis, which is federally illegal, could lead to penalties or even the loss of their federal licenses. Californian cannabis retailers often find insurance through Surplus Line Insurers. These insurers are not federally licensed but they received approval to offer insurance within individual states. Consider What Type of Insurance Do You Need? In many ways, a cannabis business has the same needs as any other business. The following list is not comprehensive, but it provides an overview of the most common types of business insurance. Your specific needs vary depending on your product or service. The emerging cannabis field walks a fine line between risk and opportunity. You can't future-proof your business, but you can prevent common misfortunes from destroying your livelihood. 12 Types of Insurance You May Need for Your Cannabis Business 1. Liability insurance: Every business generally needs liability insurance. Liability insurance covers damages and defense if your business or staff are sued for causing injury or damage to a customer or third party. 2. Employment insurance: These types of insurance cover your employees. Employment insurance requirements vary by the state but this may include Workers' Compensation Insurance, Unemployment Insurance Tax, and Disability Insurance for your employees. Your specific needs will vary by the type of work you do, how many employees you have, and state or local laws. For example, most states require Worker's compensation Insurance if you employ more than 3-5 people (the exact number varies by the state). The insurance covers your employees in the event of an on-the-job injury. 3. Crops insurance: Medical marijuana and retail cannabis growers may need crops insurance to cover the risk when something goes wrong with crops. Read the policy carefully to know how the insurance applies to your seeds, active crops, and harvested crops. 4. Business Property Insurance: Theft, vandalism, fire is among the unforeseeable situations that can destroy your business property. Business Property insurance covers loss or damages to your property whether you own your premises or lease. 5. Equipment Insurance: This is similar to property insurance, but it specifically covers repairs or replacements for your business property and equipment. The coverage varies depending on the value of your essential equipment. Cover any essential property or equipment that you could not afford to repair or replace. Sometimes a single policy may cover both your business property and repairs for your equipment. 6. Inventory Insurance: This covers retail or dispensaries if inventory is lost, damaged, or stolen. 7. Legal Defense Costs Reimbursement insurance is especially important due to the ever-evolving legalities. This is in some ways similar to general liability insurance except it applies specifically to legal defense costs in criminal or civil trials. 8. Commercial Automobile Insurance: If you or your employees drive during the course of conducting business you may need commercial auto insurance. Look for specialized plans if your business requires you to deliver or transport goods. 9. Professional Liability Insurance or Errors and Omissions Insurance: Professionals who offer advice, consult, or design products may need insurance coverage in case clients sue for alleged misjudgments or errors made while offering services. 10. Directors and Officers Liability Insurance: If your business is incorporated, members of your board of directors need specialized liability insurance in case they are sued. 11. Product Liability Insurance: Businesses that create, grow, or produce products may need coverage in case they are sued if someone claims to be harmed by their product. Whether you create edibles, oils, or any other product you need a plan that covers the potential damages you may face. You may take every precaution, but life and business are always uncertain. 12. Business Interruption Insurance: What would happen to you, your business, and your employees if you have to unexpectedly cease trade due to a disaster or unexpected emergency? This type of insurance protects you from major loss in these situations. Some insurers provide packages that include more than one type of insurance specific to your niche within the industry. The previous list is just a starting point; specialized businesses may require additional coverage. Also, consider any assets you have that you may need to protect. Eight Questions to Ask Your Insurance Agent Understanding your needs positions, you to ask the right questions when you shop around. This also empowers you to negotiate the best deal on your plan. 1. Which Areas Within the Industry Does the Insurer Cover? This information may be readily available on the insurance company website. Some specialties may face special challenges. According to an article in "Insurance Business" online magazine, edibles face extra liabilities since uninitiated users may not be prepared for the delayed onset and product's effects. 2. What is the provider's experience in the industry? Since retail cannabis is new the laws, regulations change and evolve. Some forward-thinking insurance providers joined at the ground floor and may offer valuable expertise on how to reduce your risks along with insurance coverage. 3. Can the plan grow with you? Your business may grow as the sector grows. You may want a plan that you can upgrade as your needs change. 4. Does the plan cover your business assets? Is the liability coverage adequate for your exposure? Business insurance is a situation where one size does not fit all. The right coverage depends on your assets and the damages you may face. 5. What deductibles are involved? Most insurance plans have a deductible. Some less expensive plans carry a larger deductible. This may work well if the total coverage prevents devastating losses. 6. What approach does the company take regarding defense? Some liability insurance plans require out-of-court settlement when possible for civil suits. Some take a strongly defensive stand on criminal and civil cases. Make sure your insurance provider uses an approach you are comfortable with. 7. Which states does the insurer do business in? Each state has specific regulations, some insurers active in early adopter states have more of a proven track record. 8. What is the insurer's approach to dealing with state vs. federal conflicts? The Tide is turning on voter sentiment about legalization. According to the Pew Research Center, over 57% of Americans favor legalization. Other polling bodies like Gallup report even higher numbers. Some companies are more strategic in how to deal with potential state vs. Federal issues. Insurance cannot protect you from every possibility. However, choosing the right plan may protect your property, income, staff, and business from the most common risks business owners face. Just be sure to seek an insurer who understands the evolving cannabis industry. Under Internal Revenue Code (IRC) Section 280E, no individual is permitted to take a deduction or credit on income taxes if the income resulted from carrying on any trade or business if the business consists of trafficking in controlled substances, such as marijuana, under the Controlled Substances Act (CSA). This section of the IRC was designed to prohibit individuals from taking individual tax deductions from marijuana sales. However, how does federal tax law apply to California corporations, s-corps, LLCs for the purposes of deducting expenses?
California Corporations and the Revenue and Taxation Code The differences between federal law and California state laws have created an unique situation for California marijuana businesses due to the treatment of income and expenses for personal income tax (individuals and partnerships) versus corporation tax law (including statutory cooperatives). For individuals and partnerships, Revenue and Taxation Code Section 17282 has prohibited taxpayers from taking deductions on any of his or her gross income as a result of income derived from illegal activities, including drug trafficking. However, the taxpayer must be found to have engaged in these activities first due to a criminal or other proceeding in which the state, county, city, or other subdivision was a party. For corporations, including statutory cooperatives, California has enacted a stand-alone law. A statutory cooperative is a cooperative that has organized and registered as a corporation under the Corporations or Food and Agricultural Code (Id. at Section 12311(b)). According to California tax law, an entity that is taxed as a corporation per Part 11 of the Revenue and Taxation Code and is also involved in medical marijuana activity is permitted to deduct its ordinary and necessary businesses expenses, along with the cost of goods sold, provided that the entity can substantiate any deductions that it claims with adequate records. How California Classifies C Corporations, S Corporations, and LLCs In California, a C corporation refers to an entity that is doing business in California, organized in California, or registered with the California Secretary of State. A C Corporation is business entity that is taxed as a separate entity from its shareholders. The C Corporation pays corporate taxes on its profits while the shareholders are not taxed on the C corporation's profits. The shareholders of a C corporation only report and pay taxes on the income that is paid to them by the corporation. In addition, California also has specific definitions for corporations that are S corporations or LLCs:
The owners of LLCs that have not made the election for the LLC to be classified as a corporation for federal tax purposes are not required to pay a salary so they can take their earnings as distributions. Therefore, when they report the net income for the LLC, there may be no salary expenses to be disallowed under Section 280E. Additionally, if the owners are involved in the selling, marketing or delivery of marijuana and they do take a salary, this salary expense is disallowed under Section 280E. However, if the LLC is taxed as a C corporation, the LLC owners are required to pay themselves reasonable salaries, and this salary expense may be disallowed under Section 280E. California Tax Law Does Not Automatically Conform to Federal Tax Law In California, individuals are bound by the provisions of Section 280-E. However, this tax law does not automatically conform for corporations. This is due to the fact that California law has not been designed to conform to changes in federal tax law, except under specific circumstances. Instead, California policy makers are required to affirmatively conform to changes in federal tax law. However, legislative sessions in California do not systematically address nonconformity with federal law and they haven’t in sometime. In fact, the last time that California policy makers agreed to address nonconformities with federal tax laws on an annual basis occurred from the years 1982 through 1992. Beginning in 1992, the California Legislature stopped enacting annual conformity bills that were designed to require policymakers to act on federal tax law changes by a specified date each year. As a result, several nonconformity issues, such as the nonconformity of California corporations with Section 280-E of the IRC, have gone unaddressed. Nearly 20 years after California become the first state in the country to legalize the medical use of cannabis, Governor Jerry Brown signed a package of bills, which went into effect January 1, 2016, that is designed to regulate the medicinal-cannabis industry. Known as the California Medical Marijuana Regulation and Safety Act (MMRSA), this legislation sets forth comprehensive regulations and standards that govern almost every aspect of the industry in California from taxation and licensing, to quality control, packaging, shipping and standards for cultivation.
MMRSA is made up of three laws, Assembly Bill 266, Assembly Bill 243, and Senate Bill 643. Here is a summary of the provisions of these three laws. AB 266 AB 266 establishes the Bureau of Medical Cannabis Regulation under the California Department of Consumer Affairs. The Bureau will be responsible for keeping track of licensees and reporting the movement of cannabis and cannabis-related products. AB 266 also establishes 17 different license types for marijuana producers, testing facilities, dispensaries, distributors, and transporters: 1.Type 1 = Cultivation; Specialty outdoor. Up to 5,000 square ft of canopy, or up to 50 noncontiguous plants 2.Type 1A = Cultivation; Specialty indoor. Up to 5000 sq ft 3.Type 1B = Cultivation; Specialty mixed-light. Using exclusively artificial lighting. 4.Type 2 = Cultivation; Outdoor. Up to 5000 sq ft, using a combination of artificial and natural lighting 5.Type 2A = Cultivation; Indoor. 5001 -10,000 sq ft. 6.Type 2B = Cultivation; Mixed-light. 5001 -10,000 sq ft 7.Type 3 = Cultivation; Outdoor. 10,001 sq ft - 1 Acre 8.Type 3A = Cultivation; Indoor.. 10,001 - 22,000 sq ft 9.Type 3B = Cultivation; Mixed-light. 10,001 - 22,000 sq ft 10.Type 4 = Cultivation; Nursery. 11.Type 6 = Manufacturer 1 for products not using volatile solvents. 12.Type 7 = Manufacturer 2 for products using volatile solvents. 13.Type 8 = Testing 14.Type 10 = Dispensary; General 15.Type 10A = Dispensary; No more than three retail sites 16.Type 11 = Distribution 17.Type 12 = Transporter For marijuana cultivators, the licenses also set a maximum allowable size for cultivation operations depending on the type of license issued. The law is also designed to prevent vertical integration of licensees businesses by only permitting licenses to be held in up to two separate categories. It also places quality control restrictions, which are in the process of being developed, on distributors regarding the content of cannabinoids, contaminants, microbiological impurities, and other compounds. These standards have not been developed yet by the California Department of Public Health. There is also a provision for a new fee for testing to be charged by the distributor in order to cover any new taxes that may be imposed at a later date. AB 266 establishes with written laws that the actions performed by licensees that are permitted by a state license and local government, meaning that their actions are legal under state law in order to protect the licensee from legal repercussions. It also makes provisions for the grandfathering in of facilities that were in compliance with the law on or before January 1, 2018 so that these facilities can continue to operate until their license is approved or denied. AB 266 also regulates cannabis deliveries requiring documentation of every delivery. The licensee is required to maintain a physical copy of the delivery request during the delivery to be made available upon request to law enforcement officers as required by the licensing authority. In addition, all employees of a dispensary offering delivery of medical cannabis or medical cannabis products are required to carry a copy of the dispensary's license along with government-issued identification. Deliveries may only be made by licensed transporters to qualified patients and only by dispensaries in cities and counties where deliveries are not prohibited by local ordinance. The deliveries may also be taxed by the local county. The law also protects the privacy of patients and caregivers by protecting the confidentiality of their names and medical conditions. AB 243 & SB 643 AB 243 & SB 643 assign the responsibility of regulating marijuana cultivation to the California Department of Food and Agriculture (DFA). The California Department of Public Health is responsible for developing the standards for the manufacturing, testing, production, and labeling of edibles. The California Department of Pesticide Regulation is responsible for developing standards for pesticide use in marijuana cultivation. The California Department of Fish and Wildlife and the California State Water Resources Control Board have been given the responsibility of developing measures to protect water quality. The DFA will establish a track and trace program for all marijuana plants at a cultivation site and also enacts civil penalties for cultivation operations that are in violation of these provisions. However, qualified patients can be exempted from the track and trace program if the cultivation area is less than 100 square feet for personal medical use. If the individual is a primary caregiver with five or less patients, then up to 500 square feet is permitted. SB 643 sets for the qualifications for licensing including proof of local approval. The applicants are also required to undergo a DOJ background check at a Public Live Scan Site. Under these qualifications for-profit entities are also implicitly allowed. New cultivation and dispensary facilities are not allowed to be located in school zones and must be located at least 600 ft from a school. There are several provisions regarding physicians recommendations included in SB 643. However, they are not designed to significantly affect or impair a patient's current access to medicinal marijuana. The Medical Board has been ordered to consult with the California Center for Medicinal Cannabis Research in order to develop the medical guidelines for medicinal marijuana recommendations. Physicians may not make medical recommendations to patients if the physician or a family member has financial interest in a licensed facility. Physicians are also required to include a warning notice that medicinal marijuana is still a Schedule I substance under federal law. |