CALIFORNIA CANNABIS CPA

  • Home
  • Services
  • Blog
  • Get Started
  • Home
  • Services
  • Blog
  • Get Started

The Big Difference Between Buying a Cannabis License and Buying a Cannabis Business

3/20/2020

 
Picture
There are tons of articles out there detailing the cannabis licensing processes, the high valuations of cannabis companies, and the astronomical costs associated with getting started in this industry. As an entrepreneur new to this space, you may read blog posts and see videos about how licenses are probably one of the most expensive costs of the business. 

Some even call cannabis business licenses the golden ticket to the industry. But in most cases, it couldn’t be further from the truth.  

Our experts field plenty of phone calls from clients and prospective clients who are very uninformed about the value of their license – and sometimes, even about the value of their business. The key issue is that most people don’t know the difference between owning a license and owning an actual cannabis business operating with positive cash flow. The difference between these two assets could not be bigger. 

The failure rate of new cannabis companies is high, even in a country where 20% of all small businesses fail in their first year. We’ve seen an ongoing trend of entrepreneurs shelling out a ton of money to get started in this space, only to bleed cash and ultimately close their doors. 

In this post, we’ll cover some considerations you should make before you spend big on a cannabis license or a cannabis business, and explain what the difference is between buying a license and buying an actual business.

Consider this post a healthy dose of reality: by the end, you may want to buy into a laundromat business instead of diving headfirst into cannabis.

Is Your Market Ready for New Entrants?

The first question you must ask before investing in either a cannabis license or a cannabis business is whether or not the market is ready. Consider the maturity of the medical cannabis market that you are getting into. That will weigh heavily into whether or not you even want to try to compete for a license or buy a business.

The oldest medical cannabis market in the country is California. Despite the fact that this market has been around for 20 years, there are still plenty of quirks that can make doing business difficult. For instance, a long-existing medical cannabis market usually means an equally thriving black market exists. This means that the local cannabis businesses, both legal and illegal, have been building relationships with their customers and cementing their place in the market for years. The longer that a medical cannabis market has been around, the smaller the incremental bump will in sales be when your state allows recreational cannabis.  

Case-in-point: when California opened up the market for recreational cannabis, there was no flood of new customers flocking to licensed shops. There was a relatively small new group of consumers (an incremental bump in demand), and the black market still is thriving nearly three years later.

Bottom line: the younger the medical cannabis market, the better the business opportunity.

​Buy a cannabis license, or buy a cannabis business?

If you believe the market is ready for your investment, then the next step is to decide whether you will pay for a cannabis business license, or buy an existing business. We want to preface this with one thing...there is no answer to this question.  It depends on many factors including your risk tolerance, your experience, growth/exit plans and much more!

A license, in most cases, is just a checkbox; a green light by the powers that be, authorizing you to open a business. A license says you can go ahead with the next steps to starting a cannabis business, but it doesn’t ensure that you win customers or make a profit. 

The process of getting a license is incredibly costly and there is no guarantee that you will actually get it. Once you do, the clock starts ticking for you to build a valuable business.

There are two good reasons to buy a cannabis license: 
  1. As an asset: cannabis licenses are valuable when they’re scarce and hard to get in cities with high tourist populations. For instance, in Pasadena, there are only six retail licenses and a ton of tourists, meaning your sales potential is high. In the City of Commerce, there are limited licenses but not much foot traffic, given that the city is an industrial center with relatively low income.
  2. As a tax strategy: having certain licenses opens your business to new tax deductions. You’ve probably heard that taxes are egregiously high for cannabis ventures. When you can invest $30k into a license to save $100k/year in taxes, it makes sense to buy that license. For instance, if you’re a cannabis retailer and want to get into manufacturing, getting a license to take advantage of tax laws may be smarter than buying an entire business, especially if you have space in your current facility.

When looking for licenses to purchase, especially retail licenses, make sure that the market makes sense and you’re not just getting overzealous about having a cannabis license. Make sure this license will unlock some type of financial benefit for your current business. Cannabis cultivators, manufacturers, and distributors can be more flexible because you can drive to get to your clients, so you need to make sure you look at the financials behind operating the business and find the cheapest cost of doing business.

On the other hand, businesses are sets of processes, people, and property that create value.  If you’re looking to buy a business, the most valuable ones are obviously those that are already profitable. Look for cannabis companies that have strong SOPs, amazing staff and repeatable success built-in. This goes for retail businesses and all other cannabis verticals. If you don’t look beyond profit, you risk taking on tons of liability with a company that doesn’t have the right compliance measures and documentation procedures in place.

And one last point on buying a business is that you MUST have self-awareness as to whether or not you can actually operate a business.  There is a significant difference between being an owner and an operator. Just because you own a business doesn’t mean that you will be able to run it well.  Operators have a multi-disciplinary skill set that allows them to handle the many facets of running a business from HR, to finance, to supply chain and everything else that comes with it.  This is where the power of having a team is important. If you know you are not an operator then you have two options:

  1. Find an operator within your network to bring onto your team.  Consider giving this person equity and make sure that they have experience running a business that is similar to the one you are purchasing.  For example, a general manager at a big box retailer may be a solid candidate to be the GM at your dispensary. 
  2. When you buy the business, offer stay-on bonuses to key employees such as general managers, manufacturing managers, head growers, and support staff.  You can keep them on for a certain period of time and have them earn-out that bonus wage or keep them on permanently. Use your time with them wisely so that you can document all of their processes (if not done already) and see what true value they offer within the business.  If you don’t know who to keep on, then consider running functional interviews.​

The “Green Rush” Myth

The media loves to write headlines about the so-called “green rush.” The green rush refers to the spread of legal recreational cannabis across the US, alluding to the Gold Rush of the 1800s and the money-making potential of this industry. 

In reality, the green rush is mostly hype. It’s a storyline pushed by the media that’s become ingrained in cannabis lore, only to be proven wrong at every turn. From our experience, don’t let these news stories or crazy high valuations of public cannabis companies trick you into thinking that cannabis is going to make you rich. Most of the time, it won’t. Once you look at real numbers and the amount of added complexity from working in this highly-regulated industry, you’ll see that making it in cannabis isn’t as simple as digging for gold.

​Tips for getting started in the cannabis industry

If you’re still considering investing in the cannabis market, then we strongly recommend making your decision as rationally as possible. Do your research, think about the cash expenditure required, and calculate how much you stand to earn on that cash. This is above all a financial decision, not an emotional one. 

Before you buy a cannabis business, do a very thorough analysis of the financials and the opportunity that you’re buying into. Don’t let the green rush narrative cloud your judgment.  You are making a financial decision. Ask yourself, what will this investment yield?

In most instances, businesses are a more valuable investment opportunity than licenses, especially if they are break-even or profitable, have an aggressive tax strategy and have a stable set of clients.

Budgeting for Your Investment

Now that you know the difference between the value of a license and an operating business, think about your budget.  

If you have less than $100,000 in cash, you’re going to have an extremely hard time getting directly into the licensed cannabis business as a sole owner.  The only market that you could reasonably get into with a budget of that size is in Oklahoma. At this time, this state has a much lower cost for licensing. The cost of doing business in Oklahoma is also lower. However, you need to be an Oklahoman resident for two years to get approved.  

If you’re not an OK resident, you may want to find partners to pool funds together. Buy into part of a business or create an ancillary business that helps cannabis businesses succeed. For example, can you get into the waste removal business, set up security cameras, or start an electrical or construction firm that specializes in cannabis cultivation operations.

If your budget is around $200,000-500,000, you’re in the range of being able to take over and turnaround a struggling cannabis business. Recognize that just because someone owns a cannabis business now, doesn’t mean that they are good at running it. There are many great opportunities out there to take a business and run it profitably. Early cannabis operators were excited, got into the industry and really have no idea how to build a business to profitability. Their inexperience is now your opportunity to get into the market.

At this level of investment, we don’t recommend starting from zero and going through the entire licensing process, paying rent that entire time. If you do get approved, you will need to build out a business facility, stock it and then have enough operating capital to run it – and that’s a big IF. 

If your budget is in the $500k-$1.5MM range, then you have many more options. Consider buying an existing business and using that cash flow to finance the rest of your enterprise. It may need a bit of a turnaround, but that cash can float the rest of your business. 

When buying a business (and sellers, pay attention) you need to make sure that the valuation that you’re buying the business at is reasonable. Many operators think that their business is worth more than five times their existing revenue. The green rush causes some owners to over-value their business at a multi-million dollar price tag, but if there isn’t any bite to back up that bark, then the business isn’t worth much. Check out our M&A videos/posts for more info on how to value a business. 

If you need help with evaluating your deals and bringing financial sense to your next M&A prospect, then please reach out to us today.
Get Started

The California Seller's Permit: What You Need to Know

2/11/2019

 
Picture
Each week, our experts get lots of questions about California’s seller’s permit. How do you get one? Who needs one? What does the application ask for? Is it separate from every other permit and license? There seems to be a lot of confusion out there surrounding the seller’s permit, which is required not just for cannabis operators. With this guide, we hope to answer many of these questions and provide some insight into how the CDTFA evaluates the cannabis seller’s permit.

California Seller’s Permit: Required Information

If you are doing business in California and intend to sell or lease tangible personal property subject to sales tax sold at retail, you are required to have a seller's permit. Likewise, you have to prominently display your permit at your place of business. Basically, anyone working in the cannabis market in California needs a seller’s permit.
​

For a California state seller’s permit, you must apply online with the following details:
  • Driver License
  • Social Security Number (SSN)
  • Email Address
  • Supplier Name/Address
  • Personal References
  • Bookkeeper/Accountant Address and Phone Number (if applicable)
  • FEIN (Partnership, Association, Organization, Trust, Estate, Joint Venture, Receivership/Fiduciary, Unincorporated Business Organization, Limited Liability Partnership, Limited Partnership, Limited Liability Corporation)
  • California Secretary of State Entity Number (Limited Liability Partnership, Limited Partnership, Limited Liability Corporation)
  • Agency Name (Federal, State, and Local Government)
  • Name, address and phone number of the person(s) who maintains the books and records
  • Projected monthly sales
  • Projected monthly taxable sales
  • Products to be sold

As a cannabis operator, you also need to submit:
  • Distributor License Number (not required)
  • Cannabis License Number

If you have a business partner or if your cannabis operation is managed by corporate officers or limited liability company managers or partners, you will be asked to include some of their information in addition to your own.

The seller’s permit is different from your cannabis tax permit or cannabis business license. If you are a distributor of cannabis and cannabis products, you must obtain a SEPARATE cannabis tax permit in addition to your seller’s permit.

You can apply for your seller’s permit on an open basis. There is no deadline or application window to apply for your seller’s permit. The online system guides you through the whole process and lets you know what documents you need to submit. There are also a handful of field offices you can visit where the CDTFA will walk you through the application process. If you go in-person, you get your permit right when you finish applying. Unlike the cannabis licenses, you are not being ranked against other cannabis companies.

However, you must apply for a cannabis business permit before attaining your seller’s permit. The seller’s permit application will ask you for a cannabis license number. Start with your state and local licenses before spending the time and resources to obtain your seller’s permit.

For help with any licensing matter, get in touch with our experts.

California Cannabis Advisory Council's 2018 Annual Report: Part 2

1/29/2019

 
Picture
Last week, we covered some key findings for cultivators, distributors, and retailers released in the California Cannabis Advisory Committee 2018 Annual Report. The CAC provides recommendations o the California’s cannabis licensing authorities, and helps set forth priorities when it comes to the standards and regulations of the cannabis market.

Today, we’ll outline what the CAC recommended for Manufacturers, Licensing Applications, Microbusiness and Enforcement. It’s important to keep an eye on this committee, as they can have direct impact on the regulatory environment for your cannabis operation. Here’s what the committee accomplished last year.

CAC Subcommittee for Manufacturers

Last year, the Advisory Council’s Subcommittee on Manufacturers made a total of four recommendations. The licensing authorities moved forward to implement two of these recommendations, partially implemented a third, and declined to implement one.

  1. Illustrative Guide: the Subcommittee for Manufacturers asked for an an illustrative guide for packaging and labeling to be  broken down into clear components. The CDPH developed and published three guides in June in response to this recommendation:
    1. Packaging Checklist
    2. Cannabis Products Labeling Checklist
    3. Cannabis Products (Small Containers) Checklist

Please note that the CDPH website has been updated to include more than 20 FAQs on packaging and labeling as well as some additional checklists to come. The CDPH intends to release a revised set of checklists, updated FAQs and an illustrative guide after adoption of the permanent regulations.

  1. Clarification on Packaging: The Subcommittee asked the CDPH to clarify the concepts of primary packaging, secondary packaging, and child-resistant packaging (with respect to primary versus secondary) and labeling. As a result, the CDPH issued the Packaging Checklist (linked above) which outlines guidance for child-resistant packaging. They also cover this topic in the FAQs on their website.
  2. Child-Resistant Packaging: The Subcommittee asked the CDPH to clarify how and where child-resistant packing should be used. When the CAC’s annual report was published, the questions and timeline surrounding child-resistant packaging was still unclear, but we recommend reviewing the guidance on this checklist as well as section 5303 of the Bureau’s regulations and section 40417 of CDPH’s proposed regulations.
  3. Dosage Limits: the committee asked for an increase the limitation on dosage from 2,000 mg to 4,000 mg for any non-edible medical product that is not restricted by statute; and raise the dosage limitation from 1,000 mg to 2,000 mg for non-edible adult use products. This recommendation was not adopted by the CDPH.

CAC Subcommittee for Licensing Applications

This subcommittee specifically addressed the risk of large, consolidated cannabis operators dominating California’s nascent cannabis market. The Subcommittee for Licensing Applications was primarily concerned with adding transparency to the licensing process; offering financial relief and lowering barriers to entry for new applicants; encouraging marketing stability; and protecting the health and safety of workers in the cannabis industry. As a result, the Subcommittee had four recommendations which were adopted by the committee, of which two were implemented, one was partially implemented, and not implemented one.

  1. Disclosure of Owners: The Subcommittee asked the licensing authorities to require any license applicant who lists a corporation or other entity as an owner to also disclose the names of the owner(s) of the corporation or other entity. This recommendation was adopted via regulatory language found in section 5002.
  2. Annual Fees: under this recommendation,  the licensing authorities should evaluate the amount of annual fees, especially fees paid by people with disabilities, military veterans, locally licensed equity applicants, and nonprofit compassion programs. This recommendation has been partially adopted in the permanent regulations.
  3. A and M Licenses and Transition Period: the Subcommittee asked to combine application and annual renewal fees for A and M licensees conducting the same business activities at the same licensed premises and to extend the grace period until January 1, 2020 under section 5029 subdivision (b)(1). This was adopted by the licensing authorities. All three licensing authorities included a provision that allows applicants to conduct both A and M activities at the same licensed premises as well as to conduct business across licensing types regardless of A or M designation.
  4. Use of Preparers:  finally, the Subcommittee asked for applicants to be allowed to use preparers to assist in the preparation of an annual license application. This was not adopted by the licensing authorities; the owner must verify the accuracy, attest, and submit the application. However, owners are not prohibited from using or seeking the guidance and assistance from experts.

CAC Subcommittee for Microbusinesses

Cannabis microbusinesses are operators that meet a minimum of three out of four of these allowed commercial cannabis activities:
  • The commercial cultivation of cannabis on an area less than 10,000 square feet.
  • The ability to act as a licensed distributor.
  • The ability to manufacture commercial cannabis as a Type 6 manufacturer.
  • The ability to sell commercial cannabis as a retailer.

The Subcommittee for Microbusiness offered four recommendations, of which one was partially implemented and three were not implemented.

  1. License Tiers, Incentives for Compassionate Use and Rural Operators, and
    Fee Schedule Cap
    : the Subcommittee asked to clarify the definition of a “microbusiness” to include tiers based on gross receipts and number of employees. Then, the fee schedule would be redefined to include a ceiling at which point the operation is no longer considered a microbusiness. This was not implemented by the Bureau.
  2. Recommendation #1: the Subcommittee asked state regulators to provide a “sub-microbusiness” or “microbusiness A” license which would allow up to 10,000 square feet of cultivation including nurseries; three out of four activities to be fulfilled by allowing any type of non-volatile solvent manufacturing including shared space manufacturing; retail sales to happen at events in addition to storefront sale and delivery; and distribution to be fulfilled by full distribution or distribution transport only. This recommendation was partially implemented by the Bureau:
    1. The Bureau has stated that nursery licenses qualify as cultivation so long as the nursery does not exceed 10,000 square feet.
    2. The Bureau has also stated that microbusinesses authorized to engage in retail and / or distribution activities may conduct any activities allowable by the corresponding type of license.
    3. The Bureau has amended language to include licensed infusion as a license type option to fulfill the manufacturing activity  requirement.
  3. Recommendation #2: the Subcommittee asked the Bureau and CDPH to create a document that to jointly clarify that local governments may further limit the types of activities that are permitted to occur under a microbusiness  license. This is because although the state allows multiple activities under this license type, local municipal regulations may restrict certain types of activities if they so choose. This recommendation was not implemented by the Bureau / CDPH.
  4. Recommendation #3: finally, the Subcommittee asked the Bureau to remove the prohibition on activities allowed within the home, so long as the activities that the applicant is choosing to conduct are activities commonly allowed under cottage business. This provision was not implemented by the Bureau.

CAC Subcommittee on Enforcement

Last, but not least, the Subcommittee on Enforcement is dedicated to improving public safety and protecting the business interests of the cannabis operator. They strive to “ensure that there is a balance between allowing for the feasible operation of cannabis businesses while deterring illegal and criminal activities.”

The Subcommittee adopted five recommendations; in response, the licensing authorities implemented two, partially implemented one, and declined to implement two.

  1. Enforcement Authority: the Subcommittee asked the Bureau to:
    1. clearly identify the enforcement authority regarding advertisement and placement;
    2. clearly communicate who the enforcement authority is and how to contact them with complaints;
    3. collect data on enforcement actions; and
    4. require all advertisements have information regarding the license holder placing the advertisement.
This request was not implemented by the Bureau as it was not deemed to be a “policy/regulatory change.” Meanwhile, the Bureau did provide additional clarification on advertising.
  1. Clarify Difference Between Citations and Orders of Abatement and Clarify
    References
    : the Subcommittee asked the Bureau to clarify an order of abatement versus a citation. They also requested that the Bureau clean up language and clarify the process and procedural guidelines within the regulations, reference, and citation sections. This was implemented by the Bureau; see section 5802. Citations; Orders of Abatement; Administrative Fines for details.
  2. Advertising: the Subcommittee asked the Bureau to clarify rules around the type and location of advertising permitted, as well as the collection of data on when and where advertising rules were violated. The first part of the recommendation was adopted via section 5040. Advertising Placement and section 5415.1. Deliveries Facilitated by Technology Platforms.
  3. Public Records Act Requests: the Subcommittee asked the Bureau to include language related to sharing information between the Bureau and local government entities that acknowledge the information shared is in accordance with the Public Records Act and protects information that is not discoverable under the Public Records Act. This was not implemented by the Bureau.
  4. Labor Standards: the Subcommittee asked that all licensing authorities be
    required to include violations of labor standards as part of the licensing process and enforcement, which shall include revocation of the license. This was implemented by the Bureau.

If you have any questions about the CAC or their policy recommendations, please get in touch with our experts. You can also read the full 2018 Annual Report, which covers every Subcommittee statement, to see more about how the regulations in California continue to evolve.

​

Guide to Carson City, California's Cannabis Permit Application

1/17/2019

 
Picture
Carson City, California has once again opened the application window for commercial cannabis business permits. Applications are due on February 14, 2019 at 5PM.

Carson City uses a slightly different permit process than many other California cities. The City intends to issue four licenses for “cannabis centers,” which could hold multiple licenses for cannabis cultivation, manufacturing, testing and distribution. A cannabis center may host multiple cannabis operators – and when you prepare your application you must include all cannabis operators in one “parcel,” or permit application. Each operator must also submit separate supplemental application materials depending on their type of cannabis operation (distribution, testing, cultivation, etc.).

Given all the moving parts involved in gathering your application materials (which are extensive), filling out the supplemental forms, and making sure all your operators are in compliance with the City’s regulations, we suggest working with an outside firm to give your application the best chance of approval. Don’t be fooled: February 14 will be here before you know it!

Here’s what’s new in the Carson City, California cannabis center permit application.

Carson City Cannabis Licensing Process
Carson City’s main cannabis licensing application can be found here. The city has also issued a set of application instructions that you can refer to here. The instructions provide a sample breakdown of what your application should include, as well as some scoring guidelines which may prove helpful in putting together a thorough submission.

In addition to the main application, cannabis operators must submit separate supplemental material depending on their role in the cannabis industry:
  • Cultivation – Supplemental Application
  • Distribution – Supplemental Application
  • Manufacturing – Supplemental Application
  • Testing – Supplemental Application

Applicants must also submit the following additional forms:
  1. Background Check Application: submit one for each Carson City cannabis employee and/or business owner.
  2. Intelifi Background Waiver: completed and signed by each cannabis employee and/or business owner.
  3. FCRA Summary of Rights: give one of these documents to each employee or owner applying for a background check. It is a legal requirement!
  4. Insurance Form: attest that you will get the minimum required insurance for your business. For more information, check out our insurance guide.

Main Cannabis Application
There are 13 suggested sections the City will evaluate in the main cannabis application. The city has assigned a maximum possible points they will use to score each section. This should help guide you in putting together the strongest possible submission. Read the main application and supplemental materials carefully to be sure you are meeting the requirements under each section.

Section 1: Application and Documents
  • Main Application for Commercial Cannabis Operation Permit (Cannabis Center)
  • Supplemental Application for Commercial Cannabis Operation Permit (for each license type being sought)
  • Formation and organizing documents
  • Financial and Business Information
  • Business Operation
  • Seller’s Permit Number
  • Other Licenses or Permits
  • Proposed Location Physical Description
  • Insurance

Section 2: Operation Plan (400 pts)
  • Site Plan
  • Floor Plan
  • Operation Visibility
  • Manufacturing Site
  • Cultivation Areas

Section 3: Security Plan (300 pts)
  • Should include a diagram capable of demonstrating the location of surveillance cameras, access control devices and limited access areas
  • Storage Areas
  • Storage Security
  • Cannabis Security (Safe, Vault, Locked and Secured Room)
  • Transport Plan
  • Entrance and Lobby
  • Interior/Exterior Lighting
  • Manufacturing Security
  • Cash Handling Plan

Section 4: Health and Safety Plan (300 pts)
  • Enhanced Product Safety Measures
  • Pesticides Protocols
  • Disposal of Waste Products
  • Odor Control
  • Sanitation Procedures
  • Equipment and Facilities
  • Fire Safety Plan
  • Certified Industrial Hygienist Plan
  • Devices and Equipment
  • Hazardous Material Disposal
  • Wastewater Treatment
  • Fire Sprinklers
  • Water Usage and Management

Section 5: Impact on the Environment (150 pts)
The application should state and describe the extent to which the Cannabis Business will engage in “green” business practices. Describe practices designed with a focus towards renewable energy techniques, water and power conservation measures and environmentally responsible waste management.

Section 6: Neighborhood Compatibility (200 pts)
The application should state and describe the extent to which the Cannabis Business will be managed to avoid becoming a nuisance or creating negative impacts on its neighbors and the surrounding community. Describe measures designed to create good neighbor policies, public relations techniques and nuisance mitigation.

Section 7: Employment Opportunities for City of Carson Residents (150 pts)
The application should state and describe the extent to which the Cannabis Business will be a locally managed enterprise whose owners and/or employees reside within the Carson and/or South Bay area.

Section 8: Economic Benefits (150 pts)
The application should state and describe the extent to which the Cannabis Business will be a direct and/or indirect economic benefit to the City of Carson.

Section 9: Community Benefits (150 pts)
The application should state and describe the extent to which the Cannabis Business seeks
to be an integral part of the City of Carson. Describe how the Cannabis Business proposes to develop and maintain community engagement through programs and economic incentives. For help on this section, check out our recent guide to strengthening your community benefits section.


Section 10: Experience of the Operators, Managers, and Employees (200 pts)
The application should include information concerning any special business or professional
qualification or licenses of Owners that would add to the number or quality of services that the
business would provide, especially (if applicable) in areas related to medicinal cannabis. Describe background of operators, managers and employees, as well as, if applicable,
industry specific training and experience.


Section 11: Capitalization of the Business (100 pts)
  • Available capital
  • Funding source
  • Terms and conditions of loans
  • Three-year pro forma and business plan
  • Proposed tenant improvements
  • Construction budget and timeline
  • Operations and Maintenance budget
  • Financial Projections
  • Operation commencement date

Section 12: Educational Plans (100 pts)
The application should state and describe the extent to which the Cannabis Business will develop and maintain community focused educational opportunities, possibly including general health risks associated with cannabis use, youth addiction and drug prevention programs, and measures to reduce risks associated with minors.

Section 13: Promotion of Equitable Business Ownership and Employment Opportunities (100 pts)
The application should include a proposed plan to develop a social equity program designed to ensure the Cannabis Business is diverse and inclusive. Describe how the Cannabis Business will engage in proactive efforts to hire partners and employees from marginalized communities and /or rehabilitated persons.

This is obviously a ton of information to compile – in addition to the supplemental application material found in Appendix A – so start this process sooner rather than later!

Carson City Application Review and Assessment
Once you submit your application, the Carson City staff will have a 90 day review period. The first review is to determine that your application complies with the Carson Municipal Code. If you are found compliant, your application will move to the Cannabis Permit Committee.

If your application is not compliant, within 60 days you will receive notice that your application is missing some required information. You may be given 30 days to resubmit; if your resubmission continues to be non-compliant, or you fail to meet the new 30 day deadline, your application will be “deemed abandoned” and you may start over.

Then, a Cannabis Permit Committee review the application for merit (based on the scoring outlined above). The Merit List is submitted to the City Council, who will then review the recommendations at a public meeting. The City Council makes the decision on whether to issue a Cannabis Center a permit based on Merit List criteria. If you do receive a permit, then your cannabis operation will enter a Development Agreement with the city planning council.

Carson City Cannabis Application Fees
The initial application deposit is $20,000. This is down from last year’s initial deposit of $25,000.

Need help preparing your application? Get advice from our licensing and finance experts who have helped dozens of cannabis operators in California. 

California State Licensing Requirements for Cannabis Cultivators

12/11/2018

 
Picture
What does it take to get your California cannabis cultivation license? In this extremely competitive licensing environment, knowing the full process for getting a cannabis cultivation license is important. Here’s a summary of the licensing requirements for cultivation.

Who issues the annual state cultivation licenses?
There are three distinct agencies involved in issuing the California annual cultivation license. They are:
  1. CalCannabis under the Department of Food and Agriculture.
  2. Department of Fish and Wildlife
  3. California State Water Board

Each of these agencies oversees various aspects necessary for the issuance of an annual license. CalCannabis actually grants the license, but there are essential requirements an applicant needs to secure from the other two agencies to submit a complete application with the Department of Food and Agriculture.

Category
Indoor
Outdoor
Mixed Light
Specialty Cottage
Up to 25 mature plants

Up to 500 sq ft
Up to 2,500 sq ft
Specialty
Up to 5,000 sq ft or up to 50 mature plants
​Up to 5,000 sq ft
​Up to 5,000 sq ft
Small
​5,001-10,000 sq ft
​5,001-10,000 sq ft
5,001-10,000 sq ft
Medium (limited)
​10,001 sq ft to 1 acre
​10,001- 22,000 sq ft
​10,001- 22,000 sq ft
Large*
Greater than 1 acre
​Greater than 22,000 sq ft
Greater than 22,000 sq ft
.Processor: Conducts only trimming, drying, curing, grading, or packaging of cannabis and non-manufactured cannabis products

Nursery: No size limit defined in statute (no canopy.
​
*Large licenses will not be
issued until 2023. Note that greenhouses with dirt floors are considered Outdoor Facilities.
​

How do you apply for a license?
You may submit an application for a cultivation license at any time. Here are some of the general requirements for the California cultivation license application:
  • General business information: the owner, business, and property details, which includes your lease agreement, property title, or deed.
  • Business formation documents filed by the California Secretary of State’s office
  • California State Water Resources Control Board permits and verification of your water source, including: well logs, Notice of Applicability, or a Waste Discharge Requirement (WDR) waiver.
    • You can register for the Waste Discharge Program online. Submit the Conditional Waiver of Waste Discharge Requirements or a Notice of Applicability with your cultivation license application.
    • Register online for Evidence of Envirostor Search for your proposed location
    • Be prepared to document your water sources: well, rainwater catchment system, diversion of water supply, or municipal water supply
    • If you are building a facility and disturb more than one acre of the property, you will need to acquire a Stormwater Permit and supply the Board with a Stormwater Plan and Pre-construction Hydrology Report.
    • Have all your recirculation systems approved by the State Water Board.
  • California Department of Fish and Wildlife’s 1602 permit or a waiver. Apply for these agreements online. When you apply, you will need to provide a project description, water source, and project maps, along pre-written agreement that will be re-submitted every five years. Prepare to include:
    • Self-Certified Agreement: facilities that are completely indoor, utilize municipal water supply and sewage
    • General Agreement: specific to particular actions such as small stream diversions, stream crossings (bridge, rock ford, fishless bodies of water)
    • Standard Agreement: everything else that doesn’t fall under Self-Certified or General.
    • A bio-resource assessment, design plans, detailed maps: aerial, plot, driving, and proof that the activity to be conducted is CEQA Exempt
  • A California Department of Toxic Substances Control’s hazardous materials record search via their EnviroStor data-management system
  • California Department of Tax and Fee Administration’s seller’s permit
  • Labor peace agreement if you’ll have more than 20 employees
  • Surety bond valued at $5,000
  • California Department of Justice fingerprinting via its Live Scan service

Other things you may need to submit include:
  • Cultivation Plan: include storage of fertilizers, nutrients, and pesticides
  • Lighting Plan (if applicable)
  • Pest Management Plan: integrated Pest Management Plan, pesticide list and use, include storage of pesticide
  • Attestation that site is 600 feet from sensitive uses
  • Attestation that applicant is Agricultural Employer
  • Waiver of Limited Sovereign Immunity
  • Buffer requirement of waste and trash disposal and/or storage from streams, rivers, and other bodies of water with fish: 150 ft.

Applicants must submit to the Department of Fish and Wildlife any final lake or streambed alteration agreement or a written verification from CDFW that an agreement is not required.

When you are granted a license, you will be required to train your team to use the California Cannabis Track and Trace System within 10 days of receiving your license. Licensees are also required to order UID tags from the Department of Food and Agriculture within five days of completing their CCTT training.

For more resources and help applying for the cultivation license, read this guide and get in touch with our experts.  

City of Commerce Guide to Cannabis Licensing

10/12/2018

 
Picture
The City of Commerce just released its Commercial Cannabis Permit Application and held its Prospective Operator Workshop. If you weren’t able to attend, here is a City of Commerce Guide to Cannabis Licensing.

License Types
The first thing you need to consider, if you haven’t already, is what kind of commercial cannabis business license you will apply for. Below is a list of the licenses the City will be issuing:

-       Cultivation
-       Manufacturing
-       Distribution
-       Non-Storefront Retail Delivery
-       Microbusiness
-       Testing

Deadlines and Fees
Once you’ve decided on what type of commercial cannabis business license to apply for, the other important things to remember are the deadlines and fees.

Deadlines
Applications can only be submitted in-person and by appointment. You can request an application submission appointment by emailing ccp@ci.commerce.ca.us. The window for application submission is from October 15-26, with the last day for application submission appointment requests on October 22.

Fees
There is a non-refundable fee of $13,025.00 application fee. If you are considering applying for a microbusiness license, the City is requiring that applicants pay an application fee for each type of activity.

According to state regulations, microbusiness can have up to four (4) specified license types and a minimum of three (3). That being the case, you will have to pay at least $39,075.00 for a microbusiness license with three (3) licensed activities.

Other fees that will need to be paid to the City that are refundable are:
  • Development Agreement Deposit: $16,520.00
  • Commercial Cannabis Permit Deposit: $16,845.00

Payments will be received in the form of Cashier’s Checks or Money Orders, or business checks that must be made out to the City of Commerce.

General Owner Information
Any type of license application will require owner information such as name, contact details, SSN or EIN, percentage of ownership, and other general information that should be gathered together for easy reference. There is also a brief questionnaire section that must be filled out regarding convictions, prior cannabis license revocations, etc.

You will also be required to initial statements declaring the nature of your cannabis business operations.

Qualifications and Experience
The application includes a portion where the company’s members, who have had experience in the industry, and any other relevant qualifications must be listed. It is important to showcase the strengths of each team member who will provide a sound, professional, and compliant contribution to the success of the cannabis business’ operations.

Premises
This section presents itself as a checklist of requirements you will need to put together and submit as part of the application.

Known Premises
The Known Premises portion refers to property that is readily available and accessible. It requires highly technical documentation that should be done by professionals, such as an architect and a certified civil engineer.

Unknown Premises
Unknown Premises refers to a proposed property that has yet to be acquired, either through a lease or purchase. Since the location is not yet finalized, this section requires information about how you will go about securing it including, finances, feasibility, and your commitment to the City.

Operating Procedures

This entire section focuses on the facility’s operating procedures that cover the following:
-       Transportation
-       Inventory
-       Non-Laboratory Quality Control
-       Security
-       Testing
-       Delivery
-       Point-of-Sale and Track and Trace
-       Cultivation Methods
-       Manufacturing
-       Distribution

Be sure to address each requirement listed on the application for each type of license type you are applying for. Failure to do so could disqualify your application.

Business Plan
Every business needs a business plan- and commercial cannabis businesses are no different. Part of the City’s application requires that a business plan specifically address the day-to-day operations, compliance with local and state laws, a schedule that includes a narrative of the timeline for all proposed construction, a budget, proof of capitalization, and a pro forma for at least three (3) years of operation.

Proposed Community Benefits Program Plan
Every locality wants to know that your cannabis business will help improve the surrounding neighborhood and community. In this application, the City may require your company to engage in designated programs, provide funding to specific initiatives beyond the designated City amount, staffing plan, labor peace agreement, and maybe even take part in a Mixed-Use Development Bonus that will incubate a local small business, co-locate with another small, local business, or propose other mixed-use developments.

Disclosure of Financial Interests
You will need to disclose and provide all the information associated with groups or individuals with a financial interest in the company. These groups or individuals could be:

-       Financial institutions whose interest constitutes a loan
-       Those whose interest is through a diversified mutual fund, blind trust, or similar interest
-       Those whose interest is through a lien, security interest or property encumbrance
-       Those whose share of the company stock is less than 5%

Labor Peace Agreement
If your company will have more than 20 employees, you will need to enter into a labor peace agreement with the United Food and Commercial Workers Union (UCFW). This is done to ensure that all employees receive livable wages and helps to improve the quality of their lives.

Seller’s Permit
You will need to get a Seller’s Permit from the California Department of Tax and Fee Administration. This can be done online or in-person at any of their field offices. Registering in-person at a field office provides for same day permit issuance.

Limited Waiver of Sovereign Immunity
You will have to waive any sovereign immunity defense you or your company may have in the event that a federally recognized tribe asserts their immunity over the company and its operations.

Development Agreement Proposal
You will need to review and sign the provided Development Agreement Proposal by the City. If you feel that you disagree and/or would like to change anything, you may redline the proposal by striking through or underlining sensitive language. You will also need to prepare a narrative identifying at least five (5) topics from the agreement proposal that you propose distinguishes your application from the rest.

Additional Information
You may provide additional relevant information about your or your team’s involvement in the City- either as a tenant, business owner, or resident. You may include the length of time, and the total estimated contribution to the City via taxes and fees.

Provide a signed Cannabis FAQ Fact Sheet Acknowledgement Form with the application. Failure to do so could disqualify your application.

There is an Environmental Data Form and Noticing Form that must be submitted in the event that there is a need for an Environmental Impact Report.

Background Check Authorization
Don’t forget to include your Background LiveScan Authorization when submitting your application. Each owner will need to provide a signed and completed form.

Last but not the least, don’t forget to sign and date the actual application form. Getting all these documents together will be tedious and the smaller details may be overlooked. The best way to ensure that everything is done properly and efficiently could be by engaging a team of professionals to help you through this process.

If you want to get some more information about the licensing process and how a professional consultant can help you get your license, contact a team member today!

Union City Re-Opens Cannabis Business Applications

8/21/2018

 
Picture
The north side of California seems to be on a roll when it comes to accepting adult-use cannabis, and we proudly welcome Union City back on our list of cities now accepting commercial cannabis applications.  

Union City officially re-opened their cannabis application window on Friday, August 16, so you can officially apply NOW.  Union City is awarding the follow cannabis permits:
  • Up to 3 Testing Permits
  • 2 Permits for Cultivation
  • 2 Permits for Manufacturing
  • 2 Permits for Distribution
  • 1 Permit for Retail

Union City is giving preference to businesses who are vertically integrated, aka any location that will have two or more uses. In addition, they are also accepting applications from applicants who submitted prior but were not awarded a permit. The city will close their application window on December 7, 2018. Today, we will discuss the application process for Union City and what you need to do to ensure you have the best chance of being awarded a cannabis permit.

There are a few documents that Union City has prepared to provide you with the most up to date information about the cannabis application process.  It is suggested you read these before filling in your application.
  • Union City has highlighted specific application procedures and compiled a list of important Commercial Cannabis FAQs.
  • You will need to complete a Background Application and sign this waiver to submit with your application.  Each owner and employee must complete one.
  • You must obtain a Zoning Verification Letter by filling out this Zoning Application. This letter must come from the Economic and Community Development Department.  Keep your proof of receipt as you will need to submit it with the application.

Union City Cannabis Application Submission

All applications must be submitted online via this website.  One of the perks of an online application is the ability to complete just a small portion, save it and then complete the rest at a later date.  You will also be required to submit about 23 different attachments in a PDF format. These will include:
  • Zoning Verification Letter (here is the zoning application) and proof of payment for Zoning Verification.  As noted above, this must come from the Economic and Community Development Department. To get started, provide the address of the proposed location to Union City’s Planning Manager.
 
  • Carmela Campbell – 510.675.5316 or carmelac@unioncity.org

Once the Planning Manager states that the location is in the appropriate district, you can submit the zoning application to the office at 34009 Alvarado Niles Road in Union City.  Once submitted, and your fee is paid, you should be expected to receive your final Zoning Verification Letter within 10 days.  This letter is required to be submitted online with your application. You can find a zoning map here. Cultivation, distribution, manufacturing, testing and medicinal retail uses are able to locate within the ML (light industrial) or MS (special industrial) districts.  

Keep in mind a cannabis business must be 100 feet from any youth businesses. Union City may provide some exceptions based on your business plan, so if you’d like to be within 100 feet of a youth business you must explain the reasoning clearly within the application.
  • Background applications and proof of payment for each owner/employee
  • Security Plans
  • Business Plans
  • Business Proof of Status (anything that shows incorporation, partnership agreements, etc)
  • Site Plans, Floor Plans, Development Plans and Air Quality Plans
  • Vicinity Map
  • Location Information that includes photos of the location site and buildings
  • Labor and Employment Plans
  • Enhanced Product Safety Plan
  • Environmental Benefits Plan
  • Local Enterprise Information
  • Qualifications of Principals

You will also have to submit personal information for each principal which will include:
  • 2 high quality photos of each principal
  • Social security cards and ID Cards of each principal
  • Proof of Address

Important Document Details

As you upload these documents, it’s important to note a few details.  
  • If you are uploading a document that has multiple pages, all pages must still be within one upload/PDF file
  • Minimum 11-point font for every document
  • File upload limit of 100MB
  • Label each document with the last name of the primary contact and then the business name.  For example, if the primary contact is Gary Jones and the business is Cannabis 123 – label the document “Jones – Cannabis 123”

Union City Cannabis Application Fees

Each city has different protocols for application fees.  Union City prefers Cashier’s Checks or Credit Cards. They will not accept cash or personal checks. Please note there is a 2.25% fee applied to credit card payments over $2,500.  The application fees are:
  • $272 - Zoning Verification Letter
  • $300 per person – Background Check
  • If you proceed in the process, you will go through 3 different phases:
    • Phase 1 - $3,979
    • Phase 2 - $1,581
    • Phase 3 - $1,568 (in this phase you will also pay a LiveScan application fee of $174 per person)
    • Phase 4 - $2,030

Applicants are also encouraged to attend a city cannabis meeting on Wednesday, September 19 at 1:30pm in City Council Chambers.  This will be the only and primary opportunity to discuss any application or cannabis related questions with the city staff.

If you have further questions about obtaining a cannabis permit in Union City, GreenGrowth CPAs is happy to help you walk through the process to ensure your best chances of opening a successful cannabis business.

Cannabis Zoning Laws: What do you need to know?

8/13/2018

 
Picture
As we covered in previous posts, finding properly-zoned real estate is one of the most important - and difficult - parts of starting a cannabis business in California. The real estate market in California is competitive already, and so-called “green zone” regulations severely restrict where cannabis businesses are allowed to operate.

Nevertheless, it’s imperative that you find real estate for your business before the city or county application window opens. Competition is simply too fierce to wait until the city announces they are ready to start approving business applications. Plan ahead to find cannabis-ready property with this quick guide on California’s cannabis zoning laws.

California’s Cannabis Zoning Laws

California state regulation SB94 allows the 482 cities and 58 counties in California to regulate land use and zoning in relation to cannabis within their jurisdictions. What this means is that cannabis zoning laws not only vary by location, but also by the type of business activity. For example, cannabis dispensaries will abide by different cannabis zoning laws than cultivators or manufacturers. Note that cities or counties with no legal cannabis activity will not provide zoning information related to cannabis businesses.

As far as growing cannabis, it can be tricky to discern regulations by city and state. Research shows that a slight majority of cities have banned outdoor cannabis gardens, while others have specific home-grow permits that may relate to smaller cannabis businesses as well.

To find a specific zoning law in your area, the Orange County Register has compiled a database of cannabis zoning laws by city and county (last updated June, 2018).

Common Cannabis Zoning Laws

Each city and county customizes their cannabis zoning laws. However, there are a few commonalities that our experts tend to see in many zoning policies. If you’re seeking property, here are some things to keep in mind:
  • Look for space that’s at least 1,000 feet away from schools and parks.
  • Manufacturers should avoid residential areas.
  • Regulations will often limit the number of cannabis businesses permitted in an area; be prepared to share a space with others or pay a premium to be the only cannabis retailer.
  • If you do find property, ask for a full property report.These reports show ownership history, land mortgages, or any other restrictions on property use that may hinder your lease.
  • Keep in mind not only zoning laws, but environmental concerns. Some counties have regulations around the use and storage of fertilizers, herbicides and pesticides that you may need to account for as a cultivator.  

Green zone regulations may not be announced if a city hasn’t opened their cannabis business applications yet. Regardless, it’s important to stay informed about the city’s ordinances and available commercial property. When the applications do open, be prepared by contacting California Cannabis CPAs and asking how we can help.

Everything You Need to Know About Los Angeles' Cannabis Social Equity Program

8/7/2018

 
Picture
Recently, our experts led a webinar outlining everything you need to know to get your Los Angeles cannabis business license. If you missed it, you can listen to the full webinar on-demand. We covered many topics, including Los Angeles’ cannabis social equity program.

Los Angeles’ cannabis social equity program is a part of the city’s commercial cannabis licensing system. The goal is to give a boost to past victims of cannabis criminalization by offering assistance and benefits to any communities that were unfairly punished by the drug war. Read on for more information on how this program works and how your cannabis business might be able to participate in the program.

What is Los Angeles’ Cannabis Social Equity Program?

LA’s social equity program has the stated goal of promoting “equitable ownership and employment opportunities in the cannabis industry in order to decrease disparities in life outcomes for marginalized communities and to address the disproportionate impacts of the war on drugs in those communities.”

The program intends to offer assistance in the form of funding, physical space, and a separate licensing timeline to any commercial cannabis licensees who meet the program criteria. Some of the program benefits as of July 2018 include:
  • Verification of the program qualification without premises verification (e.g., a candidate may be approved without a site evaluation);
  • Priority processing (more on that in a minute);
  • Business, licensing, and compliance assistance (TBD by the city);
  • Training via an incubator (TBD by the city);
  • Fee waiver (TBD by the city);
  • Access to an industry investment fund (if established in the future)

As you can tell from some of the notes next to the listed benefits, the city is still developing the specific benefits of the cannabis social equity program.

Who qualifies for Los Angeles’ Cannabis Social Equity Program?

There are three tiers qualifications under which a prospective cannabis business owner might qualify for the social equity program.

  • Tier 1:  the candidate is considered “low income” with earnings of less than $41,230 annually, as well as EITHER (a) a cannabis conviction prior to November 8, 2016 (the date when Prop 64 was enacted) that now would be prosecuted as a misdemeanor or citation OR (b) 5 years cumulative residency in a qualifying zip code.  
    • Qualifying zip codes include:  90057, 90037, 90062, 90003, 90061, 90059, 90061, 90001, 90011, 90008, 90016, 90013, 90059, 90002, 90014, 90021, 90044, 90043, 90037, 90058, 90008, 90027, 90033.
 
  • Tier 2: the candidate is considered “low income” with five years cumulative residency in a qualifying zip code OR has ten years cumulative residency in a qualifying zip code.  
 
  • Tier 3: the candidate is a landlord entering into a Social Equity Agreement with the city to provide capital and/or leased space, as well as business, licensing and compliance assistance to Tier 1 and Tier 2 applicants. The landlord agrees to provide access to real estate property for Tier 1 applicants rent-free and with prorated utilities for a minimum of two years, provided that the property meet certain requirements.

Please note that to be eligible for the benefits of the social equity program, you must own at least one third (and for Tier 1, 51%) of the business applying for the license.  

Even if you do not fall under one of the three tiers, you can qualify for the social equity program. To do so, you can either pay a fee to the city fund or agreeing to provide a small portion of your physical space to help the beneficiaries of the program.  

How can I apply for Los Angeles’ Cannabis Social Equity Program?

If you recall from our webinar, Los Angeles is issuing cannabis business licenses in three phases. Phase 2 of the cannabis licensing program started on August 1 and will remain open for 30 days. During this phase, applicants must qualify under the social equity program.

You can currently apply for a Phase 2 license on the Los Angeles City cannabis page. Read this primer for instructions on how to log in to your account and submit an application. Our experts are standing by to help out if you have any questions.

For more information on getting your cannabis business license in Los Angeles, check out our webinar or read our three-part guide on cannabis in Los Angeles:
  • Part 1: Los Angeles Rules and Regulations for Cannabis Businesses
  • Part 2: Los Angeles Zoning for Cannabis Businesses
  • Part 3: Los Angeles Requirements for Cannabis Licenses
​

If you have specific questions related to your business, please get in touch with our experts today.

​

Breaking California Cannabis News: Updates from Long Beach, Antioch, and Contra Costa and El Dorado Counties!

7/16/2018

 
Picture
This week’s California cannabis updates come to you from Long Beach, Antioch, and the counties of Contra Costa and El Dorado.

  • Long Beach passed an Adult-Use Business Ordinance last week at their city council meeting. First, Mayor Robert Garcia must sign the ordinance into law. The ordinance will take effect 31 days after the law has been signed. The city will begin accepting applications after this.
    • The city still has to issue a few more pieces of information, but we are eager to start helping you get those Long Beach applications in. Expect a full article about cannabis and the city of Long Beach ASAP!
  • Antioch has always been conservative about their marijuana licensing. However, recently the city began solidifying business zones for potential commercial cannabis activity.  In late June, a second reading was held and an ordinance was adopted approving the new cannabis zoning regulations.
    • This indicates Antioch is one step closer to allowing cannabis business in their city. No announcements yet on when applications will open or what permit types will be available, but we will be sure to keep you updated.
  • Contra Costa County: two cities, El Cerrito and Richmond, currently lie within the county’s borders and are pro-cannabis. In late June, the board of supervisors held a meeting and passed a commercial cannabis activity ordinance. The ordinance allows for:
    • Up to 2 non-volatile manufacturing permits
    • Up to 4 storefront retailer permits
    • Up to 10 cultivation permits
    • Distribution and Testing
A hearing was also held on July 10 to further clarify cannabis taxes.  It is suggested the proposed cannabis taxes go on the November ballot. We will keep you updated as Contra Costa County moves forward with the cannabis application process.

  • El Dorado County currently has a ban on commercial cannabis licenses, but things may be starting to change. El Dorado County recently held a meeting suggesting cannabis taxes and activities be on the November ballot. This will likely include a general cannabis tax, cannabis cultivation, retail, dispensary, and distribution. As of this moment, no further decisions are likely to be made prior to November. Check this space for future updates!

Have a question about licensing in one of the cities we discussed today? Contact Green Growth CPAs.

Palm Springs is Accepting Cannabis Applications with No Deadline!

6/15/2018

 
Picture
The world of commercial cannabis applications is ever changing.  Each California city takes it upon themselves to decide why, when and what form of commercial cannabis business they will allow into their jurisdiction.  Some cities have hard application deadlines, while others see it as an opportunity to bring in additional revenue and accept applications on an ongoing basis. Palm Springs is one of these cities.

Palm Springs is a California city with a mere 50,000 people but covers almost 100 square miles, making it the 10th largest California city by land area.  Palm Springs adopted ordinances in late 2017 that allowed for commercial cannabis activities, and now they are accepting applications with no end date in site.

Palm Springs Cannabis Licenses

Palm Springs is accepting applications for the following cannabis business activities:
  • Dispensaries
  • Cultivation
  • Manufacturing (Non-Volatile)
  • Testing Facilities
  • Transportation
  • Distribution Facilities

The city approves of both medicinal & adult-use cannabis.

Submit a Palm Springs Cannabis Application

Palm Springs does a nice job of organizing the application process and detailing the steps in one complete PDF document. You can find that document here.

Within the PDF document, you will find each of the following documents that are required for submitting an application. Everything must be completed in order for your application to be fully evaluated. This includes:

  • Cannabis Related Businesses and Activities Permit Application
  • Cannabis Related Businesses and Activities – Indemnification, Acknowledgement re: Public Records & Copyright Materials Release
  • Cannabis Related Businesses and Activities – An Application Submittal Checklist
    • This 11-page document will walk you through EVERYTHING you need in order to submit an application. It’s a great way to stay organized and outlines additional details, like the security plan you will need for your facility.
  • Cannabis Related Business and Activities – Supplemental Info & Initial fee calculation worksheet
    • This worksheet will specifically walk you through the fees you owe the city for the initial application. Basically, anyone with a 20% or more stake in the cannabis company will have to pay, get a background check and fingerprinted. See below for an example of the calculation.
 
  • Application and subsequent materials must be submitted in a 3-ring binder. They must also be:
    • Single-sided
    • 5x11 sized pages
    • Do not use spiral or comb bindings, but staples will be accepted
    • Building plans are an exception and are allowed to be on larger sized paper up to 30 x 42. They may also be folded, collated, unstapled and secured together with rubber bands.
    • Make sure you include an electronic copy, preferably PDF, on a CD or thumb drive.

The initial filing fee covers the costs of all background checks and fingerprinting. The city will not issue refunds.

  • Once an application is submitted & the Cannabis Related Business/Activity Application Fee is paid, applicants need to make an appointment for LiveScan fingerprinting. You can do this by contacting the Police Department at (760) 323 – 8166.  If you intend to have a 20% or more financial interest in the cannabis business, you must get finger-printed.
  • Once fingerprinting is complete and the city has verified your prints, you will be notified via email if you are allowed to move forward in the process. The next step will be a background check.
  • Once the background check is completed, the application will be reviewed.

Palm Springs is not specific about how many licenses they will issue within each category, but as Green Growth CPA is alerted of further details we will be sure to update this article.
​

Palm Springs isn’t the only California city accepting commercial cannabis applications on an ongoing basis. We will be continuing a series of articles that detail cities with open application deadlines, so stay tuned.

Can we help you get started on your application? Give us a shout and ask how we can help.

​

Post-Election Cannabis Updates from Pasadena, Licenses in San Rafael, South Lake Tahoe, and Deadlines in San Bernardino!

6/11/2018

 
Picture
This week: cannabis licensing updates from the California cities of San Rafael, South Lake Tahoe and Pasadena. In addition, San Bernardino’s application deadline is quickly approaching!

  • San Rafael has recently announced the opening of their pilot medical cannabis licensing program. The following 4 types of licenses will be available:
    • 4 licenses for cannabis testing labs (State License Type 8)
    • 8 licenses for medical-infused product manufacturing (State License Type N)
    • 4 licenses for medical non-storefront delivery (State License Type 9)
    • 2 licenses for medical distribution (State License Type 11)

The process will be merit-based and all applications will be reviewed by city staff. In addition, if you are a new business you must meet the following requirements.
  1. Receive a San Rafael city-approved cannabis operator license
  2. Lease or purchase property that conforms with local and state zoning regulations
  3. Be approved for a state-level cannabis license

San Rafael has released a separate page making it easy to verify correct zones and permit fees. Have additional questions about San Rafael? Send us a message and we will happily provide further details.

  • Pasadena voters decided on local cannabis measures on June 5, all of which passed. Measure CC was passed with 66% approval and will lift the city’s current ban on cannabis dispensaries. Measure DD was passed with 75% approval and will tax marijuana businesses at a 6% rate for retail businesses and a 4% rate for all other businesses. The following licenses will be approved:
    • 6 Retail Stores
    • Retail stores may deliver
    • 4 Indoor Cultivation
    • 4 Testing Labs
As additional dates and information continue to roll out about these licenses, California Cannabis will update you through our newsletter and blog posts.

  • South Lake Tahoe is moving in a positive direction toward boosting the cannabis industry. They will approve licenses for the following business types:
    • 2 retail cannabis operations
    • 2 indoor cultivation sites that are less than 5,000 square feet
    • 2 micro-businesses, which can operate three cannabis related activities — like manufacturing, retail and cultivation — under one permit.​

Further details are expected soon and California Cannabis CPA will be sure to keep you updated as application details are announced.

Don’t forget: applications for San Bernardino close in two weeks! Applications must be submitted by June 25 to be considered for cultivation, manufacturing, retail, microbusiness and distribution opportunities.

Looking to submit an application for one of these cities, or perhaps a specific license type? We have a database of cities that have open and quickly approaching application deadlines.  Contact us today.

​

Cannabis Updates from Jurupa Valley, San Rafael, and Goleta. PLUS: Cultivation Application Deadlines!

6/4/2018

 
Picture
This week, we have updates from the cities of Jurupa Valley, San Rafael and Goleta. Also, we share a few cities that are accepting applications on an ongoing basis for cannabis cultivation licenses.

  • The city of Jurupa Valley is proposing an initiative that would allow (but regulate) medicinal and adult-use cannabis. The city is considering allowing retail, delivery, cultivation, microbusinesses, manufacturing, distribution, testing and nurseries within their borders. We will continue to keep you updated as we get more news!
  • The city of San Rafael has completed a final adoption of an ordinance that amends current code. This amendment will allow for issue of a cannabis distribution license.
  • The city of Goleta is considering moving forward with a cannabis business license ordinance. But first, they are holding a roundtable this week and would like your input!
    • The roundtable is being held Wednesday, June 6, 2018 at 1:00 p.m. in City Council Chambers. A consulting group is leading the charge and will ask for feedback on local’s concerns regarding any operations, the cannabis application process, enforcement of the current laws and future potential regulations.  
    • Questions can be directed towards the city manager (Carmen Nichols) at cnichols@cityofgoleta.org or 805-961-7522.​

In addition, these cities are accepting cannabis cultivation applications on an ongoing basis.  While some cities may decide to have hard application deadlines, these cities keep their acceptance windows open ended (for now) for cultivation licenses:


  • San Bernardino
  • Sacramento
  • City of Adelanto
  • Palm Springs
  • Port Hueneme
  • City of Desert Hot Springs
  • Cathedral City
  • Willits
  • Point Arena


California Cannabis CPA has helped many cannabis businesses with the initial research that goes into finding the right city for your business. Need some assistance with a particular license? Ask how we can help.

​

Important Cannabis Licensing News from Ojai, Fillmore, and San Luis Obispo

5/29/2018

 
Picture
We hope you had a nice long weekend. This week, we have cannabis updates from the cities of Ojai, San Luis Obispo and Fillmore. Plus: a few cities are accepting cannabis manufacturing applications on an ongoing basis. Not every city has a hard application deadline!


  • Ojai recently had a second reading and adopted an ordinance that would allow for testing labs.  The city has yet to release further details. In the past, Ojai has accepted applications for dispensaries and delivery services.
  • San Luis Obispo’s city council adopted an ordinance that amended regulations for commercial cannabis business and cultivation. The ordinance goes into effect on June 14.  
    • NOTE: voters need to approve the cannabis revenue measure first before permits are issued. This ordinance would allow medicinal and adult-use cannabis delivery, retail, cultivation (indoor), distribution, non-volatile manufacturing, nursery, microbusiness and testing.
    • It may be a bit of time before we see these permits issued, as the city council wants to put this on the ballot in November. Let’s see if voters approve this new tax that will create additional revenue for the city.

  • Fillmore presented an ordinance that would allow indoor and mixed-light commercial medical cultivation. This would be a big step for Fillmore, though they would still prohibit outdoor cultivation and other commercial cannabis activities.


While most of our newsletters focus on upcoming and open cannabis application windows, it’s also important to note that some cities accept applications on an ongoing basis.  For example, the following cities accept manufacturing licenses on an ongoing basis:
  • Sacramento
  • Cathedral City
  • Port Hueneme
  • Desert Hot Springs
  • City of Adelanto
  • Palm Springs
  • Willits
  • Point Arena


Looking for some additional guidance on the licensing process? California Cannabis CPA is here to help make sense of it all. Contact us today with your questions and we can get you started.



​

Part 3 of Los Angeles’ Cannabis Rules and Regulations: Requirements

5/24/2018

 
Picture
Catch Part 1 and Part 2 of our Los Angeles series before reading the third and final article below.

In November 2016, the people of California voted to approve Proposition 64 for the Adult Use of Marijuana (AUMA). This forever changed the landscape of cannabis in California and opened up a slew of opportunities for cannabis businesses.  Los Angeles has been home to the legal medical marijuana market for years. However, it had difficulty monitoring illegal use of medical marijuana. Therefore, the city is taking further actions to ensure their ordinances are crystal clear.

A Social Equity program was also created to promote equitable ownership and employment opportunities in the Cannabis industry. Los Angeles has full intentions to issue licenses in the most transparent manner possible.

Los Angeles Required Cannabis Licenses

A license is needed for the following commercial cannabis activities.  A license will be issued as one of two categories – A (Adult) or M (Medical).  This information is sited directly from the Los Angeles ordinances, so if you’d like to read it in its entirety, you can do so here.

  • Retailer Commercial Cannabis Activity
    • Type 10 – Retailer
    • Type 9 – Non-Storefront Retailer
  • Delivery for Retailer Commercial Cannabis Activity
    • Type 10 – Retailer
    • Type 9 - Non-Storefront Retailer

It’s important to note than an applicant may only hold up to 3 Type 10 or Type 9 licenses.

  • Indoor commercial cannabis activity
    • Type 1 through Type 5 is defined as:
      • Type 1A – Cultivation, Specialty Indoor, Small
      • Type 2A – Cultivation, Indoor Small
      • Type 3A – Cultivation, Indoor, Medium
      • Type 4 – Cultivation, Nursery (limited to indoor cultivation)
      • Type 5A – Cultivation, Indoor, Large
      • Type 1C – Specialty Cottage Small (limited to indoor cultivation)

An applicant is not limited in the number of license applications. However, each cultivated area may only be licensed 1.5 acres per applicant.

  • Microbusiness commercial cannabis activity: Type 12
  • Manufacture commercial cannabis activity
  • Type 6 – Manufacturer 1 as currently defined or amended by the State of California
  • Type 7 – Manufacturer 2 as currently defined or amended by the State of California
  • Type N – Infusion
  • Type P – Packaging
  • Testing commercial cannabis activity: Type 8
  • Distributor commercial cannabis activity: Type 11

Los Angeles Cannabis Application Procedure

If you would like to apply for a license is Los Angeles, you need to fill out and file this application for Commercial Cannabis online. Various fees will be required. Candidates will be ineligible if they fall into any of the following categories:

  • If you currently hold office or are employed by the state of California.
  • If you have been convicted of any illegal manufacturing practices in the past. There is a bit of leeway, if it happened more than 5 years ago you can apply.
  • If you’ve been convicted of violating laws involving wage, labor, illegal sale of tobacco, illegal sale of alcohol or violation of labor laws within the last 5 years.
  • If you have been convicted of felonies involving violent crimes, sex trafficking, rape, crimes against children, gun crimes or hate crimes within the last 10 years.

Once you submit a complete application, The Department of Cannabis Regulation (DCR) will require a pre-licensing inspection. The details are outlined in our Rules and Regulations blog (link to our own blog once ready). EMMDs (existing medical marijuana dispensary) are exempt from this inspection. A pre-licensing inspection must be passed before any temporary approvals or licenses may be issued.

The Department of Cannabis Regulation (DCR) will mail applicants notice within 10 days of a complete application. They will also inform and mail the owner of the property and any occupants within 500 feet of the business premise. The applicant is also required to hold a hearing, informing the public of the new cannabis business that may be opening within their neighborhood.

Issuance of Los Angeles Cannabis Licenses

  • Retailer Commercial Cannabis Activity or Microbusiness Commercial Cannabis Activity
    • Within 60 days of the completed application and pre-license inspection, the applicant will know if a license will be issued.  The DCR can deny licenses based on their own discretion. However, it is stated that if an application is denied, it is likely because the applicant misrepresented the business space or documentation.
    • If the DCR grants approval, then the Los Angeles Cannabis Regulation Commission shall make the decision to issue the license after a public hearing.  
  • If your business is a non-retailer conducting commercial cannabis activity in a business premise of less than 30,000 square feet, you will have different processes than a business who has a facility greater than 30,000 square feet.  Refer to this document on page 10 for details.
  • Testing Lab Licenses: If you are seeking a testing lab license (Type 8), you may submit an application to the DCR any time after they accept applications for other types of licenses.

The Appeals Process

If you would like to appeal the DCR’s decision or denial of your license, you must do so 15 days from the mailing date of the DCR’s decision. If not filed within 15 days, the appeal is automatically rejected. Click through for more information on page 14 of this document.

Likewise, if you do successfully submit your appeal, the appellate body shall issue its decision within 30 days of the closure of the hearing on the appeal. Unfortunately, if the appellate body does not come to a decision within this time frame it is considered a denial.

Other Must-Know Info for Getting a Los Angeles Cannabis License

Your license is non-transferrable. The only exception to this is if you submit your case (and there’s been an organizational or ownership. Although this is a detailed post, the city of Los Angeles issued a highly comprehensive document that goes into further detail, so we recommend taking a look if you’d like further detail about any of the above topics.

Still looking for some guidance on the licensing process? Let California Cannabis CPA make sense of it all. Contact us today with your questions and we can get you started.

Get A Head Start On Part 1 Of San Francisco’s Cannabis Business Permit Application Process

5/17/2018

 
Picture
San Francisco recently announced that it will soon be accepting cannabis business permit applications – however, they have not yet announced when the application date will officially open. The city has provided some preliminary application information to get you started, and we recommend  you suggest preparing your application now. If you’re not sure where to start, follow this article by reading our guide to the first three steps you should take to start your cannabis business.

San Francisco Cannabis Licensing: Part 1


San Francisco will soon be releasing part 1 of their cannabis business permit application process. On May 7, the City opened office hours to allow for walk-ins and appointments should you have questions. You may schedule a meeting by emailing officeofcannabis@sfgov.org. The office hours are Monday through Friday, 1pm to 5pm, in room 018 located in San Francisco’s City Hall.


Who can apply for a San Francisco cannabis permit?

During Part 1 of the Cannabis Business Application process, San Francisco has very strict criteria. You may only apply to this round of applications for a cannabis business permit if:

  • You already hold a temporary permit from the Office of Cannabis
  • You qualify for the Equity Program
  • You are a Medical Cannabis Dispensary with a permit under Article 33 from the Department of Public Health
  • You have applied for an Article 33 Permit from the Department of Public Health that required referral to and approval by the Planning Commission before September 26, 2017
  • You have registered with the Office of Cannabis in 2017, proved existing activity, signed and complied with an affidavit
  • You have operated in compliance with the Compassionate Use Act of 1996 and were forced to stop operations as a result of federal prosecution or threat of federal prosecution


This list was taken directly from San Francisco’s website from their list of accepted criteria.

What is San Francisco’s equity program?

San Francisco recognizes that the nationwide and state drug policy has traditionally negatively impacted certain communities, causing additional inequality and a heightened level of hardship.  Therefore, San Francisco has proposed an equity program that will allow certain neighborhoods, citizens and communities to have access to a cannabis business permit first.  

Normally, applicants would have to pay a permit fee. However, San Francisco is waiving the $5,000 fee for equity applicants. There are also programs that allow for discounted rent and assistance in running a cannabis business.

How to Apply for a San Francisco Cannabis Permit

While San Francisco has not issued an application start date quite yet, the city has written a list of the items required so you can get a head start. The city will require items such as background checks for all owners and proof of a secured location zoned for your business.

The city will issue the following permits:
  • Cultivator or grower (indoor)
  • Distributor
  • Manufacturer (volatile or non-volatile)
  • Retailer (medical and adult use)
  • Delivery only retailer (medical and adult use)
  • Medicinal cannabis retailer (medical only)
  • Testing laboratory
  • Microbusiness

It is not yet clear how many of each permit San Francisco will issue. Once the application is available, the Cannabis Office will email the verified applicants with further instructions.

When the application is released, prepare to submit a few additional things:
  1. A $2,000 application fee (waived for Equity Applicants)
  2. Completed background checks. The Office of Cannabis will email you information on the next steps after the background checks are completed.


If you have additional questions related to enforcement or the equity program, visit room 362 at City Hall between 9am to 1pm, or call (415) 554-4420.


San Francisco’s application process is sure to be competitive.  If you’d like to get a head start today, contact California Cannabis CPA to ask how we can help.

Important Cannabis Updates from San Luis Obispo, Jurupa Valley, and West Hollywood

5/16/2018

 
Picture
This week we have updates from San Luis Obispo, Jurupa Valley and a reminder to submit those applications for West Hollywood!

  • San Luis Obispo has adopted an ordinance that will allow for additional commercial cannabis activities. The ordinance would allow for retail, delivery, cultivation (indoor only), distribution, manufacturing (non-volatile only), testing, nurseries, and micro-businesses. The voters still have the final say – but we are anxiously awaiting the results!
  • Jurupa Valley’s city council is on its way to permitting retail, delivery, cultivation, distribution, manufacturing, and testing facilities. They have also discussed the potential tax revenue. The city is looking to allow just one retail store per 15,000 residents of the city. The city could adopt the ordinance or leave it up to voters in the November elections. We are still awaiting which choice the city will make. 
  • West Hollywood cannabis applications are due in a little over one week (May 31). Scrambling to submit? Get advice on how to submit a cannabis application from our experts and check out our West Hollywood cannabis guide for everything you need to know.


Looking for some guidance on the cities listed or others within California?  We have a track record of providing research and cannabis application guidance to our clients quickly and accurately. Contact us today to ask how we can help.



NEW Cannabis Licensing Updates from San Bernardino, Alameda, Ojai, and Redwood City

5/14/2018

 
Picture
Today, we have cannabis licensing updates from San Bernardino, Alameda County, Ojai, Redwood City, and the City of Alameda.

  • There’s good news for anyone looking to apply in San Bernardino. The city pushed back the application deadline from late May until June 25. You have another six weeks to perfect your application. Check out our summary of San Bernardino’s application process. We also recommend these tips for submitting a strong cannabis license application from our experts.
  • Alameda County recently adopted an ordinance that will increase the total number of cultivation sites allowed in the county from six to ten.
  • Ojai’s City Council is introducing an ordinance that will allow for cannabis testing labs in the city. We will continue to update you on the process as it (hopefully) passes and applications officially open.
  • Redwood City adopted an ordinance to start Phase 3 of their cannabis program. This will allow commercial indoor cannabis nurseries in certain districts. These districts include IR, LII, IP & GI Zoning Districts. The nurseries will still have to obtain a conditional use permit. Delivery centers will also be allowed in the same industrial zoning districts listed above.
  • The City of Alameda is now accepting applications, on a first come first serve basis, for cannabis testing laboratories. Applications opened April 17 and are still open, so apply as soon as possible! At this time, all other businesses must apply through an RFP process.


Have questions about any of the above cities? Get in touch with one of our experts.  

Breaking Cannabis Updates from West Hollywood, San Francisco, and Redwood City

5/7/2018

 
Picture
This week we have updates from West Hollywood, San Francisco and Redwood City. Don’t forget: Culver City applications are due this week!

Check back in later this week for advice from our experts on finding real estate for your cannabis business, guidance on CBD products and the cannabis excise tax, and the final part of our Los Angeles regulations series. Now, onto the latest news from around the state:


  • West Hollywood began accepting screening applications on May 2 and will do so through May 31, 2018. Any applications received after May 31 will not be accepted, so it’s important to begin right away.
  • San Francisco will be launching Part 1 of their application process for Cannabis Business Permits. San Francisco has a goal of issuing at least 50% of cannabis permits to equity businesses. They would like to issue these before allowing other types of cannabis businesses to apply. They have strict rules about who can apply in this first round. The specific criteria (taken directly from San Francisco’s Office of Cannabis notice) must be true for you to apply:
    • Your business must qualify for the Equity Program.  If you have questions about this program, call (415) 554-4420.  
    • You must hold a temporary permit from the Office of Cannabis.
    • Your business must have a Medical Cannabis Dispensary with a permit, under Article 33, from the Department of Public Health OR you have applied for an Article 33 Permit from the Department of Public Health. Your permit required a referral to and approval by the Planning Commission before September 26, 2017.
    • Your business operated in compliance with the Compassionate Use Act of 1996 and was forced to stop operations as a result of federal prosecution or threat of federal prosecution.

If you would like additional information, San Francisco will be hosting office hours starting May 7. You may walk in or set up an appointment by emailing officeofcannabis@sfgov.org. The hours are Monday – Friday from 1:00pm – 5:00pm.

  • Redwood City’s council will move to adopt an ordinance that will begin Phase 3 of their cannabis program. Phase 3 will permit indoor cannabis nurseries in industrial zoning districts with a Conditional Use Permit. These industrial zoning districts consist of IR, LII, IP and GI Zoning Districts. The ordinance will also permit delivery centers in the same industrial zoning districts. We will keep you updated as further dates are announced.
  • REMINDER: If you are applying for a license in Culver City applications are due Wednesday, May 9.


If you’d like assistance with any of the following licenses or other cities within California, please contact us today. We have processed many business applications successfully, helping clients enter California’s cannabis market.

Don’t Wait: Apply Today For Your West Hollywood Cannabis Business License!

5/3/2018

 
Picture
Just announced: West Hollywood, California is now accepting screening applications for cannabis business licenses through May 31, 2018. West Hollywood has provided a lot of detailed information on how to obtain a license, and here’s what you need to know about the process.


West Hollywood Cannabis Ordinance

Back in November of 2017, West Hollywood enacted a Cannabis Ordinance that would allow cannabis businesses to be licensed. According to the West Hollywood Cannabis Business License Screening Application Packet, the following numbers of licenses are to be issued:


  • 8 Adult Use Retail Licenses
  • 8 Delivery Service Business Licenses (the physical location must be in West Hollywood).
  • 8 Consumption Area business licenses with on-site adult use retail sales (sales of products to be consumed on-site). This includes smoking, vaping and ingestion.
  • 8 Consumption Area business licenses with on-site adult use retail sales (sales of products to be consumed on-site). Edible ingestion only.
  • 8 Medical-Use Dispensary Business Licenses
 
West Hollywood Cannabis Application Process


West Hollywood will select its applicants based on specific application weighting criteria. By providing the grading criteria up front, the city is challenging applicants to tailor their application to the city’s exact needs. Be sure to take advantage of this knowledge!


The first step to getting to the actual application, however, is submitting a screening application (screening applications will be accepted May 2 – May 31).  The screening application must include the following:


  • A completed Application/Owner Information Form
  • Proof of Payment of the Screening Application Fee. The fees are as follows:
    • Adult-Use Retail - $9,880
    • Cannabis Consumption Area (both types) - $9,880
    • Medical-Use Dispensaries - $9,880
    • Cannabis Delivery Services with a Physical Location in West Hollywood - $5,025
    • The proof of payment must be a cashier’s receipt. Further details provided on page 4 of this document.
  • Cover Letter: this should not exceed 5 pages. The cover letter should include the type of licenses you are applying for.  In addition, provide a brief overview of your application and business plan.
  • Business Plan: the business plan should include the design concept, security plan and any experience that showcases both industry and business skillsets.


West Hollywood has also provided a comprehensive application overview as well as an application checklist. If you have additional questions, the city has also provided answers to commonly asked questions.


West Hollywood has done a great job providing all the necessary information needed in order to submit a successful screening application.  If you would like additional assistance in submitting a successful application, please don’t hesitate to contact California Cannabis CPA.​

How to Submit a Strong Cannabis Business Permit Application in California

5/1/2018

 
Picture

​As we’ve seen over the past few months, California cities and municipalities are offering a limited number of business licenses to new cannabis companies. San Bernardino is offering
17 total licenses; Colfax is has four retail permits up for grabs; San Francisco has a waiting list until 2019; and those are only the most recent announcements. Competition is fierce and barriers to enter California’s cannabis industry are high. That’s not to mention the high application fees you’ll pay for no reason if your license application is rejected.


What are some things you can do to make your application stand out? Our experts have worked with dozens of successful cannabis licensees, and they’ve seen what can make or break an applicant. Here are their top tips for submitting a strong cannabis business application in California.

Read the instructions.

Sounds simple, but every application is different: each municipality has their own twist on what it takes to open a business in their city limits. And, with so many potential businesses vying for a small number of permits, you must follow instructions to the letter. Don’t give the review committee an easy excuse to reject your application just for missing some information or failing to meet one of the requirements!

Do your due diligence.

Our expert’s number one piece of advice is to go above and beyond when it comes to the details. Essentially, you should be thorough in creating your application that if (when!) it is approved, you can pull the trigger and open within a few weeks. This means calling security companies, interior designers, partners, POS vendors, real estate agents, and anyone else who you will need to vet and sign contracts with to get started. Get financial quotes from each of these vendors, and make sure you’re clear about what your start-up costs are.  

Keep in mind that all these other businesses are what will make your business successful in the long-term. Don’t panic and start signing up partners you will ultimately struggle to work with. This is not only an important part of your application, but an important part of your inevitable success. Get quotes!

Be financially realistic.

Once you’ve received quotes from partners and third-party vendors, you’ll have a better picture of what it will take for you to actually open your cannabis business. For some, this can be a wake-up call; maybe you need a little more liquid capital than you originally thought. For others, this just verifies that you’re ready to go. Some cities offer bonus points when CPA attests to your financial viability. Submit your financial documents with a seal of approval from a registered accountant to show the city you mean business (literally).

Follow security guidelines.

Make yourself a viable contender in the eyes of whatever city you’re applying for by following security guidelines. Hire a professional to get your on-site security set up: panic buttons, motion sensors, door alarms, vaults, etc. Keep in mind that you are dealing with quite literally with cash and drugs: protect your business and prevent theft. The city doesn’t want to have to spend extra resources investigating any incidents at your business, and they want to see that you take safety seriously.

Compliance also falls under this area of preparation – and applicants frequently get tripped up on compliance issues. The city wants to see if you are going to run an above ground operation. Are you going to pay your taxes, or are you going to run a black market? Show plans for things like inventory control, inventory audits, and commitment to state policies. It’s not enough to make promises: show an action plan including a full inventory sweep every 14 days, for example. Show where on your floor plan you will position cameras, along with the cost per camera and vetted vendor priced out in your business plan.


Have a unique business idea.

In short: branding! California Cannabis CPA experts caution against falling into the “dumb hippie bakeshop” stereotype – unless, of course, that’s a carefully thought through user experience you’re going for. Put a little work into describing what the inside of your dispensary will look like, what the user experience will be, and what your logo and signage will be. What makes you look professional? What sets you apart from every other cannabis store?



Show your role in the community.

As we’ve pointed out in the past, many cannabis business applications have a so-called community section – an opportunity for you to share how you will play a role in supporting the local community. California is well aware that cannabis businesses can expect to rake in the cash: and they want to see how you’re going to add value back to society. Our experts suggest that you select specific causes or community functions with local significance. For example, donating 1-2% of your sales to a local animal shelter is better than saying you’ll send some cash to PETA eventually.


Give yourself enough time.

Our experts recommend giving yourself a full three to four weeks of dedicated time to craft and submit a solid application. That means spending each day drafting contracts, making calls, interviewing potential employees, locating real estate, creating financial projections, and setting up security measures, among other things the application might ask for. Unfortunately, some cities don’t give you the luxury of time: some applications only give you a two week window. In that case, it helps to consult with an expert to prioritize where you can shine on an application.

Has your city announced the opening of their permit application process? Get in touch with California Cannabis CPAs to find out more!

Key Upcoming California Cannabis Permit Application Deadlines You Need to Know!

4/30/2018

 
Picture
EDITOR'S NOTE: San Bernardino changed it's cannabis application deadline. The new application deadline is June 25, 2018.

​

There are several important California city due dates approaching! Here’s a quick round-up of the local and city-wide cannabis application deadlines for the month of May. Many of these cities are limiting the number of cannabis licenses available, so competition will be fierce. To give your business the best chance of being approved, work with one of our experts! Later this week, we’ll also be publishing our exclusive tips for submitting the strongest permit application possible.

Culver City Cannabis Application Deadline
​

Culver City applications due by 5:00PM on Wednesday, May 9. The city will issue a limited number of permits in each of the following categories.
  • StoreFront Retail – 3 permits
  • Manufacturing – 6 permits
  • Distribution – 6 permits
  • Indoor Cultivation – 3 permits
  • Testing Laboratory – 4 permits 
  • Delivery-only Retail – 5 permits

To read more about Culver City’s application process, check out our comprehensive summary.

Moreno Valley Cannabis Application Deadline

Moreno Valley applications are due Friday, May 11. Don’t forget to apply through their online portal. Read more about the application process in our summary.


San Bernardino Cannabis Application Deadline

San Bernardino applications are due Wednesday, May 23. San Bernardino stated that they will be awarding the following licenses, allowing up to 5 in each of the categories until they are taken. Read more about preparing your application in our summary of the city’s requirements.
  • Cultivation
  • Manufacturing
  • Retail
  • Testing
  • Micro-business

Colfax Cannabis Application Deadline

Colfax applications are due Monday, June 4. Read our recent blog about the details of applying for their four coveted licenses.


Need some help getting organizing and submitting your city’s application information? Contact us today to get started. Later this week, we’ll have the final part of our Los Angeles cannabis series (read Part 1 and Part 2) as well as everything you need to know to submit a strong permit application – and increase your chances for being approved at any of these cities.

San Bernardino Cannabis Applications Are Open: Here's Everything You Need To Know!

4/27/2018

 
Picture
EDITOR'S NOTE: San Bernardino has changed its cannabis application deadline. The new deadline will be  June 25, 2018. 

Big news:
San Bernardino will begin accepting applications for commercial cannabis permits starting April 23, 2018. Here are the full details of the application process to ensure you are fully prepared.


Side note: on April 8, the city released specific ordinances regulating smoking in public, personal cultivation and commercial cannabis activity. Find a summary of those ordinances here.

San Bernardino Cannabis Application Process

On April 23, 2018, San Bernardino will begin accepting license applications for the operation of Commercial Cannabis Businesses (CCB). The city is issuing up to 17 licenses/permits. However, if all 17 licenses are not issued within the first round it is possible the city will open a second round of applications. This is a great opportunity for those who want to get into the cannabis business.


Act quickly as the application period will only be open for one month. The deadline for submitting your application is 4:00PM on May 23, 2018.

So, where do you start?

The city has provided a comprehensive overview of the application procedure guidelines. The actual application can be found here.

  • San Bernardino's cannabis application states that the city is issuing cultivation, distribution, manufacturer, microbusiness, retailer and testing lab permits. Although the city says it will be issuing up to 17 permits, the website is not specific about how many of each it will be issuing. Page 16 of the ordinance states:

The number of each type of commercial cannabis business that shall be permitted to operate in the City shall be established by the Mayor and City Council.  At no time shall the total number of permits for all license types exceed one (1) permit per twelve thousand five hundred (12,500) residents of the City as determined by the most recent Population.

We will update you as the city responds to our inquiry.

  • Prior to submitting your $183 application fee, you must submit a Zoning Verification Letter. This letter states that you have met the city’s zone and location requirements.  The letter must be from the Community Development Department. The process takes about 10 days, so start that process ASAP!
  • Submit your Zoning Verification Letter along with:
    • An indemnification agreement (an agreement that removes the city from its liability).
    • Live Scan Criminal History Check: note that this process is currently delayed as the city is still working out the kinks. It must be conducted at the San Bernardino Police station. A new due date will be posted on the city website soon, so check regularly! We will also continue to update you. Find out more detailed information about the process on page 3 of this document. Each Cannabis Permit Employee and Owner must have a background check.
  • You must submit 2 copies of your application.  Each application must be in a 3-ring binder AND an additional copy must be on a flash drive.
  • Fees are $2,647 + $300 per background check, per business owner.  It is an additional $132 for each LiveScan Check. See below for the full fee schedule, taken directly from the San Bernardino Application Guidelines.
Picture

How will San Bernardino evaluate cannabis license applications? 
Applications are evaluated and ranked based on the following:
  • Location (200 Points)
  • Business Plan (400 Points)
  • Neighborhood Compatibility Plan (300 Points)
  • Safety Plan (300 Points)
  • Security Plan (300 Points)


If you complete Phase 2 with a score of at least an 80%, you will move on to Phase 3.  There will be a maximum of 34 applicants that move on to Phase 3. If you make it to Phase 3, there will be an extensive interview process. You can find the details of the process on page 4 of this document.


San Bernardino will begin accepting applications starting April 23, but they close on May 23.  With only one month to complete your full application, contact California Cannabis CPA to ensure you have everything in order to nab a commercial cannabis permit!

​​

Moreno Valley NOW ACCEPTING Commercial Cannabis Applications for 5 License Types – DUE MAY 11!

4/25/2018

 
Picture
It’s an exciting time to be a cannabis business in Moreno Valley!  Applications are now open for commercial cannabis business permits.

Moreno Valley Cannabis Business License Application
Moreno Valley has set up the full application process through a third party vendor named PlanetBids. To begin the application process, click the link and register as a new vendor. Once you’ve registered, Planetbids will send you a registration email within 24 hours. After you receive this email, the Moreno Valley website suggests searching for bid opportunities and look for invitation number 2018-019.

The PlanetBids site houses the full application and lists the supplemental details and forms you will need to submit for your cannabis business license. You have until May 11, 2018 at 4:00pm to submit for a commercial cannabis permit. Don’t even try to submit an application outside of the PlanetBids system: the city will not accept it.  Luckily, if you run into technical issues there is a PlanetBids hotline that can be reached at (818) 992-1771.

Before you apply, Moreno Valley suggests the following:
  • Review this webpage to get the full run down on the business side of things
  • Review the full application procedure that provides insight into how Moreno Valley prefers you operate a commercial cannabis business (located within the PlanetBids system).  
  • Read the Commercial Cannabis Business Permit Application carefully.
  • Start compiling the Background Application Forms for employees and owners
  • Review the information regarding the commercial cannabis business permit process here: www.moval.org. This site covers local regulations, municipal codes, ordinances, resolutions, live scan instructions (for the background check) and FAQs.

Remember, a majority of the documents you’ll need to submit (the application, background application, as well as Moreno Valley’s overview on the city’s limitations) are available through PlanetBids.


Details on Applying for a Cannabis License in Moreno Valley
  • According to the Commercial Cannabis land use (Ordinance 932), you must be at least 600 feet from any schools or youth establishment.
  • There is an application fee of $9,551 for the Permit Application.
    • In addition, there is a $300 background application fee per employee/owner and a $150 background application fee for each employee.
    • All of the fees must be submitted to the cashier located on the first floor of City Hall at 14177 Frederick Street, Moreno Valley, CA 92553 (City Hall). Receipts must be submitted with the application through the online PlanetBids system.
  • On the application, you may choose from the following license types, although we are still investigating how many of each Moreno Valley is awarding:

  • Indoor Cultivation license
  • Manufacturer – Type 6 license
  • Non-Volatile Testing Lab – Type 8 license
  • Dispensary/Retailer – Type 10 license
  • Storefront Distribution – Type 11 license
  • Microbusiness – Type 12 license

Moreno Valley will evaluate and select candidates based on a points system. Things like location, business plan, safety and security plans, air quality plans & community benefits will be considered.  You can review the full details of the point-based system on page six of the Moreno Valley cannabis business application guidelines.


In addition, applications must achieve a minimum of 70% score within each individual category. In order to be eligible for the next step in the application process, you must score an overall grade of 80%. It is likely that scoring an 80% will grant you an interview and move you to the next step.  Note that a fee of $1,556 will be due prior to the interview and you will be notified (via email) of next steps.


As Moreno Valley releases additional information about the process and next steps, we will be sure to update you! Act quickly on this one – applications close May 11, 2018.  Need help hitting the ground running with your application? Contact California Cannabis CPA today.



​

California Cannabis Tax Returns are DUE in 1 Week! Plus: Updates in Moreno Valley, Gonzales, West Hollywood and Oxnard

4/23/2018

 
Picture
Check out this week’s breaking news from Moreno Valley, Gonzales, West Hollywood and Oxnard. Don’t forget: California cannabis tax returns are due in one week!

  • Moreno Valley’s City Council adopted an ordinance that added cannabis micro-businesses as an allowed category. This likely means they will issue more licenses, but nothing is official yet.
    • The city is still accepting commercial cannabis applications until May 11, so get that application in if you’d like to receive an indoor cultivation, manufacturer, testing lab, dispensary/retailer, storefront distribution or micro-business permit. More on that later this week. 
  • Gonzales recently adopted an ordinance that increased the maximum number of marijuana cultivation and manufacturing permits from three to eight.  As more details emerge about when they will be awarded, we will be sure to inform you.
  • West Hollywood continues to inch closer to finalizing all of their application information and grading scales. It looks as though applications will open May 2.  Finalized application materials should be ready and online by April 25. However, West Hollywood is still finalizing details so nothing is confirmed.  The city website does state that most of the information and required documents will likely stay the same or very similar, so feel free to check out their website to get a head start.  We will provide a full-fledged write up once the information is 100% cleared with the city.
  • Oxnard recently adopted an ordinance stating that it will allow deliveries of medical cannabis from licensed businesses outside of its city. As an exact date becomes available for this new ordinance, we will provide an update.
Every week, we will continue to update you on the California cities that are opening their application processes so you can get a head start.  Have a question on an existing city or application? Contact us to get started.  
<<Previous

    Categories

    All
    Accounting
    Banking
    Business
    Cannabidiol
    CBD
    Compliance
    Cultivation
    Distribution
    Hemp
    Insurance
    Investing
    IRS
    Licenses
    Manufacturing
    Marketing
    Taxes
    Testing

California Cannabis CPA is owned and operated by GreenGrowth CPAs.
The information contained in this website is meant only for guidance purposes and not as professional legal or tax advice.  Further, it does not give personalized legal, tax, investment or any business advice in general.  For professional consultation, please sign-up for our services. California Cannabis CPA disclaims any and all liability and responsibility for any and all errors or omissions for the content contained on this site. 
*California Cannabis CPA does not provide Audit and Assurance related services directly to its clients - all professional services are provided by GreenGrowth CPAs. 
Please review our privacy policy here. California Cannabis CPA is owned and operated through GreenGrowth CPAs.