Check out these updates from the cities of San Bernardino and Culver City. Plus, news from the California Department of Food and Agriculture (CDFA).
Don’t forget, Cannabis tax returns and payment for January 1, 2018, through March 31, 2018 are due April 30, 2018! Please contact California Cannabis CPA for any assistance with the licensing process. Los Angeles, California recently released a series of additional regulations to reduce any negative impact or confusion regarding the cannabis industry.
Missed part one in our Los Angeles series? We covered the licenses, rules, and regulations. Today we will review the Los Angeles planning ordinances. Cities often regulate where cannabis activity can be conducted, and Los Angeles is no exception. Here’s what you need to know. Cannabis Retailers in LA: Type 10 (Retailer) or Type 9 (Non-Storefront Retailer) Retail cannabis activity can be conducted within ten specific zones located on pages 4-5 at the link. There are also specifics about how close a business can be to other retailers, microbusinesses, schools, alcohol/drug recovery centers, public parks and libraries. In most cases, Type 10 licensees must be at least 700 feet away. There are some exceptions with Type 9 licenses (non-storefront), all of which is listed on page 5 of this document. Cannabis Microbusinesses in LA: Type 12 (Microbusiness) Microbusiness commercial cannabis activity can be conducted within four specific zones. There are also rules about how close your business can be schools, public parks, and treatment facilities so pay special attention to the details on page 6 of this document. Cannabis Indoor Commercial Cannabis Cultivation in LA: Type 1A (Cultivation, Specialty, Indoor), 1C (Cultivation, Specialty Cottage, Small), 2A (Cultivation, Indoor, Small), 3A (Cultivation, Indoor, Medium), 4 (Cultivation, Nursery) and 5 (Cultivation, Indoor, Large) Indoor cultivation is allowed within the 4 zones detailed on page 7 of this document. Note that indoor activity must also be at least 600 feet away from any schools Cannabis Manufacturing in LA
Testing Commercial Cannabis Activity in LA: Type 8 (Testing) Testing is allowed within the seven zones beginning on page 8 of this document. Activity must be conducted at least 600 feet from any school. Cannabis Commercial Distributors in LA: Type 11 (Distributor) Distribution is allowed within the four zones outlined on page 9 of this document. Activity must be conducted at least 600 feet from any school. Details about LA’s Cannabis Zoning Rules How do you define distance as stated in this document? Distance is defined as the horizontal distance measured in a straight line, from the closest exterior wall of the business. Consider the closet point of property from any school, public park, recovery center or day care center. Are there exceptions for grandfathered medical marijuana dispensaries? There are specific provisions given to grandfathered and existing marijuana dispensaries. Read this document starting on page 11 for all you need to know about grandfathered existing marijuana dispensaries. Remember – it’s unlawful to conduct any cannabis activity without being properly licensed! California isn’t messing around. There are a lot of details involved in making sure you obtain a business within the proper zone. Need help clarifying the details? Contact California Cannabis CPAs today. We’ve helped dozens of cannabis businesses obtain licenses within their desired city and zone. Colfax, California is now accepting cannabis retail applications. Colfax is ready to issue up to four retail cannabis business permits (two medicinal and two adult use). Due to the limited number, it’s important to get started on your application today. Application Checklist Since the city states it “may” issue up to four permits, with no guarantee that it will release the full number, you’ll need to make sure your application is right the first time. To get started, download the full application. Colfax requires two copies of the application be submitted, each one in a three-ring binder. A third copy will be required in PDF format on a flash drive. These details seem trivial, but they are important as you don’t want your application disqualified on arrival. You will also need to supply proof of the following:
Application Process There are four phases to the application process. The details above are part of the first phase. Each of the individual phases will have a separate fee associated with them. If you pass Phase 1, you will be notified if and when you can move to the next phase.
The Evaluation Process Colfax has provided a very specific points system which they will use to grade cannabis retail license candidates. Review these details carefully to make sure your application has the best chance of approval. If you have any questions about the status of your application, the city has provided the following contact information: Wes Heathcock 530-346-2313 Wes.Heathcock@colfax-ca.gov Additional Background As you fill out the application, be prepared to discuss any history of other licenses you have obtained, past felonies, and a description of your desired business location (include any zoning verification letters). In addition, the city will require:
Applications will close on June 4 at 4:00pm. Applications must be submitted to the Planning Department located at 33 South Main Street, Colfax, CA, 95713. Submitting an application for a cannabis business permit is no easy feat. Luckily, if you need some guidance, California Cannabis CPA is here to help. Contact us today! Another week, another round of California cannabis city updates! This week we have news from three California cities: West Hollywood, San Francisco, and Redding.
If you do not qualify for any of the above statements, you will have to wait until 2019 apply. Even 2018 applications are not open quite yet! San Francisco has provided a preliminary checklist of permit application requirements if you would like to get a head start. Once we hear more, including the number of licenses that will be available, we will be sure to update you.
We will continue to keep you updated on the following cities, as well as any other California cities who update their cannabis laws and ordinances. Have questions about applying for a cannabis license? Give us a shout. Los Angeles is further clarifying their cannabis rules, regulations, and city ordinances to surrounding this growing industry. In this series, we’ll be tackling Los Angeles revised planning ordinances and licensing. First up: the city’s rules and regulations for cannabis businesses.
Los Angeles Cannabis Application Procedure If you’ve applied for a Los Angeles cannabis license, congratulations in taking the first step towards become a cannabis business owner. If you are still looking to apply, read on! The Department of Cannabis Regulation (DCR) plays a crucial role in cannabis licensing. The DCR provides a master license application form to the public. If you applied, every applicant will be given a time stamp on their application to indicate when it was received. If for some reason the DCR determined your application was incomplete, you will be notified. If you are applying for the first time, your application should include:
Click through for a more detailed list of the application requirements. California Cannabis CPA is also here to help with the details of your application, so please don’t hesitate to get in touch. Specific Requirements There are a few additional requirements you may be required to meet, depending on the type of license you are planning to acquire. Here are a few extra things you should know:
No matter which license you are applying for, you will be subject to a pre-license inspection. This will likely include employees or agents from the following city or county departments stopping by for a friendly visit: DCR, Building and Safety, Police Department, Fire Department and Los Angeles County Department of Public Health. Read additional details of the inspection requirements on page eight at the link. Operational Requirements and Violations As far as regulation penalties, the city divides violations into minor, moderate and serious offenses. Below is a brief overview of the three categories. These represent a high-level overview of the rules, and if you’d like to read the rules in greater depth, we suggest clicking through to review specific operational violations beginning on page ten. Minor Offenses An offense is considered minor if….
Moderate Offenses
Serious Offenses
Record Retention It is your responsibility to maintain the following records for at least seven years. It is considered a serious violation if you do not!
The Los Angeles Rules and Regulations are incredibly extensive and although this list goes into great detail, it does not cover them all. California Cannabis CPA is here to walk you through the extensive steps in order to secure a license. Contact us today to get started. Another week, another round of California cannabis city updates. Don’t forget – there are some important deadlines coming up if you’re opening a cannabis business in Lake Elsinore, Colfax or Moreno Valley.
Don’t forget! In the last few weeks we shared some information about the following cities. But the dates are so important, they are worth mentioning again.
With these important deadlines around the corner, make sure you get your application in order! These licenses are very competitive, so if you need assistance, contact California Cannabis CPA today to get started. Newsflash: this month, the California Department of Public Health (CDPH) proposed new emergency regulations that would allow cannabis manufacturers to share facilities. These regulations are going to be filed on April 3, 2018, with an ensuing five-day public comment period until April 8, 2018.
These regulations intend to offer ways for small manufacturing businesses to enter the cannabis market at a lower start-up cost. Here’s what you need to know about the proposed regulations. How do I get a Type S License? Here is a quick overview of what you need to apply for your Type S License.
To get a Type S license, an applicant must fall into the Tier I or Tier II fee categories:
Lastly, “cannabis manufacturing” means that a licensee can participate in the following activities:
The application will be available on the CDPH website after the public review period has closed. How do I register a shared-use facility? If you are a cannabis manufacturer with a Type 7, Type 6, or N license, you can register your location for shared-use. As part of the approval process, you must apply for a Type S license. This is similar in structure to a commercial kitchen or coworking space in that it allows companies to share space and equipment. Note that the location where the cannabis shared-use license is held may only be used for cannabis-specific manufacturing activities. To register as a shared-use facility, you must submit the following information:
Why should I be interested in a shared-use facility? The emergency regulations aim to provide equity among cannabis manufacturing companies who have limited access to the cannabis market. Many local regulations and zoning restrictions prevent cannabis manufacturers from operating in accessible neighborhoods. Likewise, the cost of opening and operating a manufacturing plant can disqualify new businesses from getting off the ground due to exorbitant costs. The state intends to ease that burden while providing a new source of revenue for existing operations who wish to share their space. To review the details of the proposed regulations and a fact sheet with instructions for submitting public comment, visit the CDPH website and speak with one of our professionals about the process for sharing your manufacturing operation. The deadline to procure a cannabis business license in Lake Elsinore is fast approaching. Applications have been open since March 1, 2018 and will close on April 15, 2018 – so it’s important to begin the process today!
Cultivation and Manufacturing The City of Lake Elsinore will now allow for cultivation, testing and manufacturing in specific light industrial (M-1) and heavy industrial (M-2) zones. However, there are limits to the amount of facilities that may open within each zone. A maximum of ten total cannabis-related facilities will be allowed (five within each zone). Limited retail and distribution uses are only permitted as accessory use to an approved facility permitted for cultivation or manufacturing. The City expressly states that they are open to adding additional businesses in the future, should they see economic benefits. Application Process Not surprisingly, the application process can be a bit extensive. Here is what you need to get started:
The city will look for several things when evaluating your application:
Your location must also be entirely indoors (excluding greenhouses) and all operators must not have any kind of criminal history. Zoning The city has provided a map of the M1 and M2 zones. This map will provide a high-level view of the areas in which the land-use zoning is allowed. If you have questions about the application or the Lake Elsinore permit approval process, you can call the city at this number: 951-674-3124. Since the April 15, 2018 deadline is quickly approaching please contact California Cannabis CPA for immediate assistance in submitting your application. On April 2, Colfax and Moreno Valley will begin accepting cannabis permit applications. Plus: updates from Riverside and the Emergency CDPH regulations that prove sharing really is caring.
A cannabis manufacturer with a Type 6, 7 or N license would need to register their facility as a “shared-use facility”. If this facility is approved, the manufacturer that wants to use the space needs to apply for a Type S license. This brings about new and exciting opportunities as larger manufacturers could make use of empty space and provide them to smaller manufacturers that don’t want to invest in their own independent locations. Should everything be approved on April 13, 2018 – all applications will be available directly on the CDPH website. We will continue to update you on the status of the above cities, as well as other open cannabis applications. We have helped dozens of cannabis businesses fast-track their applications and enter the cannabis market successfully. Get in touch with our experts to start your business today. The city of El Cerrito, California is currently issuing operating permits for cannabis retail businesses. Applications are due by Friday, March 30, 2018 at 4:00 p.m. In addition, El Cerrito will only be issuing a maximum of TWO operating permits for cannabis retail businesses. Therefore, it’s imperative to submit all application information quickly and accurately. Let’s take a quick look at what is needed.
Application Checklist El Cerrito was kind enough to provide an application checklist. This is a great resource to utilize while applying. Remember, with a maximum of 2 permits, it’s important everything is done right the first time. Below is a list of the important items required, but be sure to refer back to this checklist before submitting.
Zoning Requirements Future cannabis retail businesses are only permitted in the San Pablo Avenue Specific Plan Area. In addition, they are permitted on the San Pablo Avenue Commercial and San Pablo Avenue Community street types. If a business is within the theater district designation, cannabis storefront retail is only allowed in the upper floor locations. However, there must be access to an elevator. If an elevator is not available, a building official must approve another means of accessibility. In addition:
El Cerrito is expected to publish specific land use buffers within their online zoning map in the coming weeks. Join our mailing list and we will notify you when they become available. Ready to Apply? The city references Senior Planner Sean Moss as a resource should you have specific questions regarding the application process. You must submit all questions by TODAY Thursday, March 22, 2018 at 5:00 p.m. Are you ready to submit your Operating Permit Application and start a dispensary? We’ve helped countless of cannabis businesses secure permits in California and would be thrilled to help you do the same. Contact us today. March Madness is here, and no, we’re not talking about basketball season. Besides preparing your tax return, it's also the time to make sure you're keeping track of permit deadlines. Culver City approved a cannabis regulatory ordinance, officially amending the municipal code on commercial cannabis businesses. As a result, they’ve made a number of cannabis business permits available to applicants during the month of March! All cannabis businesses within Culver City are required to obtain a cannabis business permit in order to legally operate. The city is releasing a limited number of permits for manufacturing, distribution, cultivation, testing, and delivery-only retail businesses. The process is going to be quite competitive, so if you need assistance preparing your application, please get in touch with one of our experts. The following numbers are a guideline to what type of permits and the quantity that will be available.
Both commercial outdoor cultivation and commercial mixed-light cultivation will remain prohibited. Here’s what you need to know to submit the best application possible. Storefront Retail Permit Application and Selection Process Culver City’s cannabis business permit application and selection process is established by City Council. Click through to download a copy of the storefront retail business application. The above document outlines the 9-page application guidelines and selection process for storefront retail businesses. Here’s a glimpse of what the process looks like:
Applicants will be reviewed by a three person panel which is appointed by the city manager. This panel will rank each applicant. The 3 – 6 applicants ranked highest proceed to Step 1(b). Then, a 5-person review committee conducts panel interviews with remaining applicants. You will be required to have 2/3 of your largest individual equity holders present at the interview. Points will be assigned and the 3 applicants with the highest score will receive an approval letter to proceed. The applicant will then apply for a Conditional Use Permit (CUP) in addition to Los Angeles County Permits. A public meeting must be held, requiring you share details of your plan and CUP. Then, the city council will approve or deny the storefront retail cannabis business permit. If approved, the applicant must apply for a business license tax certificate and fees must be paid. A detailed business plan must be submitted that includes, but is not limited to, such items as employee training plans, security plans and design/location of the facility. To review the full details for storefront retail businesses, please refer directly to Culver City’s website. Manufacturing, Distribution, Cultivation, Laboratory, Testing, and Delivery-Only Retail Business Application If your cannabis business falls under the non-storefront retail business category, you can find details regarding the Culver City application here. The document at the link outlines key application guidelines and selection process for manufacturing, distribution, cultivation, laboratory testing and delivery-only retail businesses. Here are a few highlights of what to expect during the application process:
Next, the applicant will apply for a business tax certificate, Los Angeles county and city permits. A cannabis business application (part 2) will be submitted and the applicant will be notified when approved with a step 3 approval letter. The applicant is then required to pay building permit fees and complete the desired build-out. Inspections will be performed throughout the process. To have the best chance of having your application approved, we recommend carefully reviewing the steps and requirements on Culver City’s website Please note that there are separate requirements for testing laboratories. You can find those requirements by clicking through to page two of this document. There are several additional details such as the special cannabis tax, operating requirements, public health requirements and zoning maps. Familiarize yourself with these details available on Culver City’s cannabis specific page. Because of the limited licenses available to Culver City applicants, we suggest you consult with one of our experts to give your application the best chance possible of approval. Get in touch so we can help prepare your cannabis business, and sign up for our email newsletter for future updates from Culver City. This week we have some announcements about the application and licensing status of the California cities of El Cerrito, Lake Elsinore, Avalon and City of Montebello.
Applications were opened March 1, 2018 and will close April 15, 2018.
We will provide expanded blogs for several of these cities to provide further application and license details. Contact California Cannabis CPA if you would like further information about any of the above license applications. We look forward to updating you about each of the above cities as additional information becomes available. Soon, the popular city of Santa Ana, California will be opening up Phase II of the regulatory safety permit process. The city’s population of 350,000 residents makes Santa Ana a prime market for cannabis businesses. On November 9, 2017, the City Council approved an ordinance allowing for adult-use commercial cannabis retail businesses. The new ordinance went into effect on Monday, December 11, 2017.
The new ordinance allowed for up to 30 adult-use commercial cannabis retail locations; co-location with medicinal licenses is permitted. No other type of commercial cannabis business activity is permitted, including manufacturing, distribution, cultivation, testing, or microbusiness. It’s important to note Phase I ended on March 1, but good news: Phase II is opening soon. Phase I Applications Santa Ana closed Phase I (Registration Application) on Thursday, March 1, 2018. The city held an information session for "newcomer" applicants on January 17, 2018 to discuss the new ordinance, the Phase I application process, and to answer questions from attendees. If you want to see what went on, check out the PowerPoint presentation from the information session. How were commercial cannabis businesses selected? Click through for details on the selection process and the applications requirements found in the new adult-use commercial cannabis ordinance. Distance Clarifications While meeting to discuss updates to the application process, the Santa Ana city council updated zoning regulations for cannabis businesses. If you’re looking to start a commercial cannabis retail store, please note the following ordinances related to the location of your business. The following buffer distance measurements must be met in Santa Ana:
Click through for a detailed map of commercial cannabis zoning here. What’s next for cannabis businesses in Santa Ana? All applicants who submitted within the the 30-day “Phase I” will be notified of their outcome soon. Eligible applicants will be invited to apply for Phase II, the Regulatory Safety Permit. When further updates are available, California Cannabis CPA will be sure to notify you. Missed the first deadline? Santa Ana will accept new each year between April 1 and April 30. If you submit during this period, you will be placed on the waitlist and reviewed as further licenses become available. To apply, make sure to download the application form and review all necessary materials provided by Santa Ana. It’s important to understand that the City will not be holding a new lottery, so even when you submit an application, you will still wait to receive permission to move on to the next phase. This approval process can be lengthy and expensive: we suggest that you consult with one of our experts before beginning the application process in Santa Ana. Likewise, if you want to begin preparing for Phase II of the regulatory permit process, please contact California Cannabis CPAs. The City of Carson in Los Angeles County is accepting commercial cannabis center applications until April 19, 2018. The city allows a total of four centers. Each center can have multiple licenses on one parcel or contagious parcels. The following are the license types available:
Where to start: the main application Filling out this application is the first step in the process. Before getting started, be advised of the following details:
What are the steps after I submit my application? Here is the procedure regarding how an application is chosen and what happens after.
The application will require you check the applicable types of commercial cannabis operations to use the commercial cannabis center. The options include indoor cultivation, testing, wholesale distribution, manufacturing and mixed light cultivation. What are the zoning requirements? Click through for a map of the eligible and ineligible locations for a cannabis operation. What other documents do I need to submit? Please attach the following documents to your application, both for the commercial cannabis center as well as for all commercial cannabis operations presently seeking use of the center. Documentation for commercial cannabis operations, subsequently (at the time of this application) seeking use of the center, shall be timely submitted before any such operations commence at the center.
What financial information is required? The City is also interested in obtaining your financial and business information for your City of Carson application. Here are the items they require:
Click through for a full checklist of all required information is included on page 14 of this document. Additional Applications The City of Carson also released the following supplemental applications:
The City of Carson also asks that you use these specific forms to comply with section D(5) of the main application.
What’s next? Looking for some assistance with this arduous process to make sure you get it right the first time? Contact California Cannabis CPA today to get started. Welcome to our weekly roundup of deadlines and permit updates from around the state. If you are applying or thinking about applying for a cannabis license in Avalon, Sebastopol, Paso Robles, Santa Ana and Carson City, we have some updates for you today.
We make it our business to provide you with consistent city updates that are in the process, or have released, new cannabis license applications. Should you have questions about licensing in any of the above cities please contact California Cannabis CPAs today. This week in cannabis updates: here’s what you need to know if you are applying or thinking about applying for licenses in Culver City, Cotati, Adelanto or Moreno Valley. There are also new deadlines for Thousand Oaks and Merced that you’ll want to pay attention to! Plus: what do you think about the new proposed legislation allowing marijuana use for pets?
As always, California Cannabis CPA is here to help you through the arduous (and sometimes confusing) processes of obtaining a cannabis license. Want to chat about how we can make that happen? Send us a message. We look forward to hearing from you. Exciting news! If you are applying or thinking about applying for licenses in Santa Barbara county, San Luis Obispo, Seaside, Coachella or Salinas, we have some big updates for you today. In addition, California is moving one step closer to allowing additional flexibility for temporary cannabis events. Read all the details below.
We will continue to update you as the city releases more specific information. If you’d like to get a head start or have any permit/licensing questions – California Cannabis CPA is available to discuss your questions and needs.
Commercial Cannabis Permit – Amendment – Major: $2,395.65 Commercial Cannabis Permit – Amendment – Minor: $788.79 Commercial Cannabis Permit – Amendment – Administrative: $205.39 Commercial Cannabis Permit – Appeal: $513.99 Commercial Cannabis Permit – Renewal: $1,346.03 Click here for all updated Salinas cannabis permit pricing. Will there be additional temporary cannabis events? Recently, two bills were introduced that discuss the topic of cannabis at temporary events. Under the Medical Marijuana Regulation and Safety Act (MAUCRSA), cannabis special events can only take place at a county fair or district agricultural association event. Assembly Bill 2641 and Assembly Bill 2020 have been introduced and are attempting to widen those restrictions. AB 2641 would authorize the Bureau of Cannabis Control to issue temporary event licenses and would authorize a state temporary event licenses to be issued for an event. Therefore, events could be held at any venue approved by local jurisdiction. AB 2020 would provide additional flexibility and give local jurisdictions the ability to determine where and when they want to hold a cannabis special event within their borders. Oakland, California was one of the first supporters of AB 2020 as it wants to allow for cannabis at their Art and Soul Festival. Although this might prove difficult, if Oakland is allowed to add cannabis to this popular festival, it is likely other cities will follow suit. We will keep you updated on the progress of these two bills as AB 2020 is set to be read in March 2018. In the meantime, please contact California Cannabis CPA with your questions related to temporary cannabis licenses. Over the past few months, the state of Michigan has been rolling out some of the most comprehensive state licensing requirements for cannabis companies. Though cannabis isn’t fully legalized in Michigan, the stringent policies the state has enacted on medical licensees suggest the state is on the way to full legalization.
Michigan is ranked second in the country for states with medical cannabis programs, and beginning December 2017, a new regulatory framework was enacted to create a licensing framework for the growing number of medical marijuana businesses. LARA is Michigan’s Department of Licensing and Regulatory Affairs, the group in charge of issuing licenses (much like the CDTFA in California). LARA is in charge of reviewing applications, issuing licenses, and providing oversight to groups with active licenses. Cannabis Licenses in Michigan At this time, there are five different types of medical cannabis licenses a business can obtain in Michigan:
What are the application requirements? Michigan has one of the most involved application processes yet. Of course, the application requirements will vary based on what class license or type of license you’re seeking: Class A licenses are less involved than Class C licenses, for example. However, Michigan officials warn that the application process is going to be very intrusive. Capital Requirements Michigan will likely ask applicants to meet a capital requirement, that is, to show they have adequate financial resources to cover their expenses. According to one news source, “applicants must show that at least 25% of the assets used to meet these capital requirements are liquid and can be easily converted into cash.” LARA will likely ask for an accountant attestation (and this is where things may feel intrusive). The attestation verifies your financial history, almost like an audit. An accountant will look at your financial records and ask questions concerning:
Then, an accountant can provide a letter of attestation proving you are able to sustain a medical cannabis business if permitted. Annual License Fee The next requirement, after the capital requirement, is that businesses must pay an annual license fee to the state to be allowed to operate. Though the fee will be determined by the number of license applicants, experts estimate this fee could range from $10,000 - $57,000. Some municipalities may also include their own administrative fees. Additional Requirements As of December 2017, the licensing process was mapped out into two phases: pre-qualification and full license qualification. Pre-qualification will involve a criminal background check and $6,000 licensing fee. If you make it to the next phase, full license qualification, LARA experts will verify your business location, local government approval, and more. In brief: Michigan’s licensing process for medical cannabis companies is involved. But, we believe in the long run, it’s worthwhile to start the application process sooner, rather than later. Your business will be ahead of the game should full-legalization happen in the coming months (or year). For more questions on Michigan’s application process, check out LARA’s FAQs or contact one of our experts! Santa Barbara, Merced, Thousand Oaks, Benicia and the California State Licensing Board Weekly Update2/15/2018
With 2018 comes an abundance of opportunity as new cities and counties are allowing for additional cannabis licenses. Acting in a swift, vigilant but detailed manner is essential to securing your desired cannabis license. Here are several cities with pending and quickly approaching application deadlines.
We will continue to update you on various city and county license application openings on a weekly basis. We’ve guided many of our clients through the arduous paperwork and licensing process, and we are happy to do the same for you. Contact California Cannabis CPA today to ask how we can help your business. If starting a business is hard, starting a cannabis business in the state of California can be even more daunting. With new regulations, a plethora of license and permit requirements, and a brand new set of tax guidelines to adhere to, establishing a cannabis business is no easy feat. We’re here to help make that process a little clearer for any entrepreneurs hoping to make their mark on the California cannabis industry. Here are ten steps to take to get started right away. Step 1: Select your entity type and business name This might be the most important first step for getting your business off the ground and ensuring its long-term success. The business structure and entity type you choose – whether a nonprofit, for-profit, collective, or something else – has repercussions on how you are taxed, your ability to transfer assets and ownership interests, how you will manage and run the business, as well as your persona liability. Read about some of the different business structures in our guide for understanding nonprofit and for-profit cannabusinesses. Step 2: Register with the California Secretary of State Depending on your business entity, your next step will be to register with the California Secretary of State. Find the correct forms with instructions and according fee information at bizfile.sos.ca.gov. Here’s a quick snapshot of which entities are required to register:
Step 3: Register a Fictitious Business Name (If Necessary) Your business may choose to operate under a name other than it’s legal name that you’ve registered with the California Secretary of State. If that’s the case, you should file with the county clerk/recorder where the business is located. Check the county’s website for information on requirements, forms and fees, or reach out to our experts if you have additional questions. Step 4: Get Your Local Permits and Licenses It’s not sufficient to file documents with the California Secretary of State before operating as a canna-business.California has a dual licensing system, meaning you are responsible for also obtaining a city, county, or city and county license, permit, or other authorization. Check with the municipality and county where you will be operating as a cannabis business to determine what the process is for obtaining the proper authorizations. Our local experts can also assist in this process. Step 5: Get a Seller’s Permit and Cannabis Tax Permit from the CDTFA (If Necessary) Do you sell cannabis or cannabis products? Then you need to register with the California Department of Tax and Fee Administration (CDTFA) for a seller’s permit. If you are a cannabis cultivator, processor, manufacturer, retailer, microbusiness, or distributor making sales, then you have to get a seller’s permit prior to applying for a license from the California Department of Food and Agriculture, the California Department of Consumer Affairs, or the California Department of Public Health. Note that if you are a distributor, you will need to register with the CDTFA for a cannabis tax permit to report and pay cannabis taxes to the CDTFA. Check our guides for cultivators and manufacturers, distributors, and retailers for more details. Step 6: Obtain Required State License(s) Depending on your role in the cannabis industry (retailer, manufacturer, distributor, etc.), you must apply for a specific license before engaging in cannabis-related activities. Specific information for cultivators and manufacturers, distributors, and retailers can be found in our guides. Step 7: Understand your Employer Responsibilities Like any business, if you plan to hire some staff, you need to register as an employer and obtain a federal Employer Identification Number. Now is also the time to start considering your business’s payroll taxes, wage withholding requirements, matching employer withholding requirements and employee employment eligibility requirements, along with requirements for State Disability (workers’ compensation) Insurance, Unemployment Insurance, and equal employment opportunity. Step 8: Determine your Tax Obligations There’s nothing quite as jarring as being surprised by a big bill come tax time. While you set up your business, take a moment to do a little research on what your upcoming tax responsibilities will be. Try these resources, and if you have any questions, reach out to our experts.
Step 9: Anticipate Ongoing Business Registration Requirements This seems like a lot of licensing, registration, and compliance, but even after you get started, there is still more to come. Every corporation and LLC is required to file a Statement of Information with the CA Secretary of State within the first 90 days of registering and then again annually or biannually, depending on your entity type. Step 10: Register your Trademarks Last but not least, make sure to register your trademark or service mark. You may start this process after your cannabis service or product is lawfully in use, that is, your licenses have been approved and you’ve started operations within California. Visit the California Secretary of State’s Trademark and Service Mark page to learn more about this process. While we’re not a law firm and cannot provide legal advice, there are a few key tax laws that cannabis retailers in California are responsible for now that cannabis is legal. The goal of this article is to give you an overview of these taxes and make you aware of your responsibilities as a cannabis business owner in California. In subsequent posts, we’ll dig into the excise, sales, and use taxes to give you everything you need to know about these tax requirements – and make sure your business stays compliant. For now, here are the basics you need to know.
Are you a cannabis retailer? You are a retailer if you sell cannabis and/or cannabis products directly to a consumer. Microbusinesses that are licensed as retailers also must abide by the same regulations as traditional retailers. A cannabis microbusiness is type of license category (Type 12) that allows your company to engage in multiple cannabis activities at one location. For example, as a microbusiness you could cultivate up to 10,000 sq. ft. of cannabis canopy and distribute your product under one license. Because often you are selling your product to a consumer, these microbusinesses follow the same regulations as retailers (detailed here). If you’re not sure whether you’re a cannabis retailer, get in touch with California Cannabis CPAs. First Steps to Becoming a Cannabis Retailer Before we dive into the tax law basics, a quick refresh: to be a cannabis retailer in California, you must start by applying for a seller’s permit and also secure local and state cannabis permits. Click this link to register with the CDTFA for a seller's permit. For details on what you need to get a seller’s permit – including a checklist of the documents you need to submit in your application – check out this blog post. Please keep in mind that you may be responsible for getting additional permits and licenses from your local county or city government. More on that to come! Next, if you are an existing cannabis retailer (i.e., not a new company) you are also required to report all your sales and pay sales tax due to the California Department of Tax and Fee Administration (CDTFA). The amount of tax you’ll pay is based on your gross receipts, meaning the tax rate is set based on where the sale takes place and when the sale is over the counter vs. when you deliver the item yourself. Finally, keep in mind that as you grow your business, you will be taxed on items you use that are purchased without tax – so hold onto your receipts and keep track of your inventory. Retailer Tax Law Basics There are a few key taxes that retailers are responsible for as of January 1, 2018. Cultivation Tax Anyone who cultivates cannabis is responsible for paying a cultivation tax – including retailers who grow their own cannabis. Pay this tax to the distributor in a similar process to the excise tax collection. Current cultivation tax rates are $9.25 per dry-weight ounce of cannabis flowers, as well as a tax of $2.75 per dry-weight ounce of cannabis leaves. Exempt from the cultivation tax are businesses that cultivate cannabis for personal use or by a qualified patient or primary caregiver -- i.e., medical cannabis cultivators. Cannabis Excise Tax An excise tax is a fancy name for a tax paid when purchases are made on a specific good – like cannabis and cannabis related products. The excise tax is usually included in the price of the product, meaning you’ll collect this tax from your customers every time you make a sale. Charge excise tax on everything from cannabis to cannabis edibles, oils, lotions, and waxes. How much should excise tax be? Add on an extra 15% of the average market price to the listed retail price of your product. The average market price is based on the type of transaction between the seller and you. We will dig into this in detail later on. Note that you are not required to list the excise tax separately on your receipt – this makes it much easier for you to pay your sales tax, as you will see in the following section. You do need to have the phrase “The cannabis excise taxes are included in the total amount of this invoice” included on every receipt. Sales Tax There remains an exemption for sales and use tax for all medicinal cannabis products, but usually, as a retailer, you will need to pay sales tax. Sales tax applies to retail sales of “tangible personal property” in California – in plain terms, this means anything you can touch and feel, including cannabis, cannabis products, and cannabis accessories such as rolling papers, vape pens, or pipes. When calculating the amount of sales tax due, you must include the amount of your excise tax in the receipts. Since the excise tax should be included in your total sales price, this shouldn’t require any additional effort from you in totally your gross sales tax. You are liable for sales tax even if you don’t collect sales tax reimbursement. This means you must pay the excise tax even if you don’t sell the product. How much is your sales tax? That depends. The sales tax rate is based on where your sale takes place when it is over the counter, or when you deliver the product yourself. So, for example, if you sell cannabis at your store location in Los Angeles, you may have a different sales tax than if you make a delivery to a customer in San Diego. All tax rates are on the CDTFA website – and more on this tax to come. Use Tax Use tax is a tax on items you use or consume that you purchased without paying tax. An example of a use tax in everyday life might be a tax on getting a massage. The use tax rate is the same rate as your sales tax rate. Broadly, expect to pay use tax on items you purchased outside the state of California without paying California state sales or use tax. If this sounds confusing, it is. We’ll cover in greater detail what kinds of products you can expect to pay use tax on in future posts. In the meantime, if you have any questions, don’t hesitate to reach out to the experts at California Cannabis CPAs! This past November, the California Department of Public Health's Manufactured Cannabis Safety Branch (MCSB) released Emergency Regulations that outlined the licensing procedures for the manufacturing of cannabis products. Here’s a quick guide reviewing the standards and practices you need to know to be compliant in 2018. Types of Licenses As you already know, It is illegal to manufacture cannabis product without a valid license -- and this will continue to be the case after cannabis is legalized on January 1, 2018. A license is needed at each of the premises in which cannabis is manufactured. There are two types of licenses:
It is important to note that these licenses are non-transferrable. In addition, those that are employed by an agency in California or hold office are not authorized to hold a manufacturing license. License Application Requirements The application deadline is fast approaching for 2018. There are also different protocols and detailed information that must be submitted with each license application. Temporary License Application The MCSB will issue temporary licenses to allow a business to engage in commercial cannabis activity. These licenses are valid for 120 days. You may extend for an additional 90 days if the business has submitted a complete annual license application. The application can be submitted via snail mail or email. Once received, the CDPH will have 10 days to respond. The temporary licenses have no fees associated with them and the CDPH began accepting them December 8, 2017. Here is the temporary license application from the official website: Temporary License Application. Annual License An online system is due to launch this month will allow manufacturers to submit applications for the annual license. Check the CDPH website for updates on the online submission portal. This application is quite extensive and will require you to submit the following information:
This annual license application is very lengthy and will require proof of details for many of the latter items. GreenGrowth CPAs suggests reading the official bill thoroughly to ensure you submit the proper detailed information about items such as security procedures, quality control, transportation and waste disposal. Of course, if you have any questions, don’t hesitate to let us know! We’re here to help. Application and License Fees A nonrefundable application processing fee of $1,000 is required for each new application. Annual license fees are based upon a sliding scale.
Priority in issuance of licenses shall be given to qualified applicants that can demonstrate that the commercial cannabis business was in operation under the Compassionate Use Act as of September 1, 2016. The department also has a right to deny applications for new or renewal licenses for any reason.
License Renewal If you would like to renew a manufacturing license, it must be submitted to the department at least 30 calendar days prior to the expiration date of the current license. A renewal application will not be accepted more than 60 calendar days prior to the expiration of the current license. If a renewal application is submitted after the expiration date, a $500 fee is charged in addition to application fees. More so, if the renewal is not submitted within 30 calendar days after the expiration date you will lose your ability to apply for license renewal. Instead, it is required you submit a new license application. If you’re planning on launching your business in 2018, you’ll also need a seller’s permit to do so. Read our guide for additional information about securing your seller’s permit before 2018. There are many policies and regulations that will continue to evolve in 2018. GreenGrowth CPAs will continue to update our site to bring you the latest information about selling, growing and manufacturing cannabis. How to convert your cannabis nonprofit into a for-profit (and put more money in your pocket)12/18/2017
There’s more big news for cannabis businesses as we roll closer to 2018 and the start of legal cannabis in California! Existing cannabis nonprofits who wish to convert to a for-profit entity can file with the California Secretary of State to do so starting January 1.
Why would you consider converting a non-profit to a for-profit? There are two big drawbacks to being a non-profit to consider:
Therefore, if you’re interested in building a business and selling it, or making a profit that you don’t need to reinvest back into your business, a for-profit would be the way to go. Sound like a promising model? Here’s what you need to know to convert your cannabis non-profit into a for-profit. Who does this apply to? First, remember that everyone starting a cannabis business in California needs to file with the Secretary of State. Specifically, entrepreneurs seeking to start a cannabis-related business in need to register their business entity, as well as any trademark or service mark. Next, if you’re an existing nonprofit -- a mutual benefit corporation or a cooperative corporation -- and you wish to convert to a for-profit entity, you must register this change with the Secretary of State starting January 1, 2018. This applies to any businesses looking to become a Corporation, Limited Liability Company (LLC), Limited Partnership (LP) or limited Liability Partnership (LLP). If you’re a new business, you are required to register with the Secretary of State before applying for any license(s) with other local and state agencies. Not sure what business structure is right for you? Luckily, there’s a guide for that. The California Secretary of State has this overview of the different forms your canna-business can take. Of course, if you have any questions about the differences between a corporation, LLC, LP, or any of the other options, GreenGrowth CPAs are here to help. Steps for Registering Your Cannabis Business The office of the Secretary of State has set up an online portal to make the process of registering your business relatively straightforward. (And if you like Cheech, there’s a great PSA to go with the new site that you should definitely watch.) Follow these simple steps to get your business registered correctly.
This is a lot information to take in, and if you’re feeling overwhelmed, GreenGrowth CPAs are here to help. Get in touch with any questions and we’ll guide you through the registration process. EMERGENCY RELEASE: CALIFORNIA CANNABIS DISPENSARIES MUST PAY TAXES BEFORE GETTING SELLERS PERMIT
What happened: In news this week, California’s Department of Tax and Fee Administration is requesting dispensaries to pay any unpaid taxes before getting a seller’s permit. It’s an effort to bring those gray-area operators who haven’t formally been paying taxes up to code before the marijuana industry takes off in 2018. For any businesses already growing or selling cannabis, the California state government will request that all dispensaries must pay their taxes before applying for a sellers permit. Why is it important: The cannabis industry in California is projected to bring in $1 billion in taxes by 2020, and the government wants to kickstart that windfall early. Not only that, but regulators are hoping to quash any lingering black market operators. The goal in requiring operators to pay back-taxes is to bring the industry above board before January 1 -- not to punish any existing operators, says one expert. Therefore, the state is likely to continue to work with any business owners who still want to get a seller’s permit and haven’t yet paid their taxes. What you need to do now: If you’re one of those gray areas operators, start to go through your records to determine how much tax you potentially owe before January 1. Under the state’s recent legislation, retailers and growers need temporary business permits from their individual towns or jurisdictions. These permits will last for four months, at which point they will be approved by state regulators for the official seller’s permit. That means now is the time to catch up on any lingering back taxes -- or risk getting shut down four months from now. Questions on how this applies to you? Get in touch with the experts at California Cannabis CPA today to get some advice on how to best proceed for your canna-business. We can help you easily get caught up on your taxes and get your return filed in a week! The local government of Cathedral City, CA has adopted several ordinances that define a set of regulations allowing certain Medical Cannabis Businesses to operate. Anyone who would like to originate a Medical Cannabis Business within the City must obtain prior approval from the City before beginning operations. Cathedral City issuing Conditional Use Permits for Dispensaries, Cultivation and Manufacturing. Cathedral requires each Medical Cannabis Business to obtain a Medical Cannabis License and a Conditional Use Permit in addition to any other generally applicable permits, licenses or approvals that are required of businesses. A separate Medical Cannabis License and Conditional Use Permit are required for each proposed location. Prospective Medical Cannabis Businesses may submit applications for a Medical Cannabis License and a Conditional Use Permit at the same time, or may wait until after the Medical Cannabis License has issued to apply for a Conditional Use Permit. A Conditional Use Permit cannot be issued until after the Medical Cannabis License has been approved. A Medical Cannabis License must be renewed annually. Follow these steps to obtain the required permits for a Medical Cannabis Business in Cathedral City, CA. Step 1: Determine an Acceptable Location for a Medical Cannabis Business Step 2: Complete the application process for a Medical Cannabis Business License in Cathedral City, CA. Step 3: Complete and Review the application process for a Medical Cannabis Business Conditional Use Permit (CUP) in Cathedral City, CA. Step 4: Complete Criminal History Check (Live Scan) Prior to applying:
Step 1: Determine an Acceptable Location for a Medical Cannabis Business The application must include the address and a detailed description of the proposed Medical Cannabis Business location. Dispensaries, Cultivation Sites and Manufacturing Sites are only being permitted in certain zones listed in Section 9.108.090 of the City Code. Dispensaries may be located in the I-1, CBP-2, and PCC zones. Cultivation Sites may be located in the I-1, CBP-2, PCC and OS zones. Manufacturing Sites may be located in the I-1 zone. Dispensaries, Cultivation Sites and Manufacturing Sites are subject to other locational restrictions, as stated in Section 9.108.090 of the City Code, including minimum distance requirements from schools, day-care centers and youth centers, residential zones, and East Palm Canyon Drive. Any person who desires to open a Medical Cannabis Business in the City should ensure that the proposed location of the use satisfies the City’s locational restrictions in Section 9.108.090 prior to filing an application for either a Medical Cannabis License or a Conditional Use Permit.
City of Cathedral Zoning Map: http://www.cathedralcity.gov/home/showdocument?id=5350 Step 2: Complete and Review the Application Process for a Medical Cannabis Business License in Cathedral City, CA.
Medical Cannabis Business License Application Completed applications need to be submitted in person at: Cathedral City Community Development Department 68-700 Avenida Lalo Guerrero Cathedral City, CA 92234 All applicants are required to complete the application form and submit two (2) copies. A deposit in the amount of $7,500.00 is required along with the application and the following additional documentation:
The applicant will be notified in writing by the City Manager of the decision to approve or deny the Medical Cannabis License. If approved the license will not be issued until the applicant posts a cash deposit or letter of credit in the amount of $5,000 as the security required by Section 5.88.040(I)(5) of the City Code. The Medical Cannabis License will not be considered final, and no Conditional Use Permit may be issued, until this amount is posted. Step 3: Complete and Review the Application Process for a Medical Cannabis Business Conditional Use permit (CUP) City of Cathedral, CA. Conditional Use Permit Application Applicants may apply for the Conditional Use Permit CUP at the same time as the Medical Cannabis License or they can wait until the Medical Cannabis License is approved. The City will not schedule the Conditional Use Permit for a public hearing before the Planning Commission until a Medical Cannabis License has been approved by the City Manager and the appeal period has expired or all appeals have been exhausted. The Conditional Use Permit application might require at least one site visit by City Planning staff and the potential need to revise submitted plans to ensure they comply with all applicable laws and regulations prior to scheduling of the hearing before the Planning Commission. The CUP application form must be submitted to the City in person, along with the following documentation:
Step 4: Complete Criminal History Check (Live Scan) Once an application has been submitted, applicants may contact the Police Department at (760) 770-0304 to schedule an appointment to start the LiveScan fingerprinting and the background check process. The background check can begin after the application is submitted or after the City has completed the courtesy pre-screening or made a formal determination that the application is complete. At the time the application is submitted the City will provide the applicant with a Live Scan form for each person identified in the application as an owner, director, officer, or person who is managing or otherwise responsible for the activities of the proposed of the Medical Cannabis Business. Live Scan forms will also be available on the City’s website. Background checks consist of a two-step process: Step 1: Each individual associated with the application must be fingerprinted using Live Scan technology.
Step 2: The background check shall generally consist of, but not be limited to:
The Background Investigator will submit a full report to the Chief of Police upon completion of the background check. The Background Investigator shall be tasked solely with providing factual information in his or her report in order to provide the Chief of Police with a sufficient factual basis to decide as to whether the application should be approved or denied. Once the Chief of Police reviews the report from the Background Investigator they will make a recommendation as to whether the criminal history of one or more of the individuals indicates that Good Cause exists to deny the application. The Chief of Police’s recommendation shall be issued in writing within ten (10) calendar days of his receipt of the report from the Background Investigator and shall include an explanation as to the Chief of Police’s reasoning in making the recommendation, including the analysis bridging the facts to the ultimate conclusions. |