What You Need to Know About Obtaining a Cannabis Manufacturing License

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:

• M-license: An M-license is required to manufacture cannabis products for sale in the medicinal-use market.
• A-license: An A-license is required in order to manufacture cannabis products for sale in the adult-use market

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:

• Physical address of the manufacturing premises
• Does the premise manufacture medicinal use or adult use cannabis products?
• What type of activity is conducted at the premise (extraction, infusion, packaging and/or labeling)
• The types of products that will be manufactured, packaged or labeled
• Name, title and phone number of the on-site individual who manages the operation of the premises
• The name, title and phone number of an alternate contact person for the premise
• The number of employees at the premise
• The anticipated gross annual revenue from products manufactured at the premise.
• Premise diagram: a blueprint or site map of your location and specific enough to show the bounds of the property, dimensions, entrances, exits, walls, windows, and shared entryways are documented.  It must also clearly state where the commercial cannabis activities will be conducted.
• A description of inventory and quality control procedures. The inventory control but be capable of tracking the location of all cannabis on premise. This must be reconciled every 30 days.
• A description of the transportation process
• A description of security procedures
• A description of waste disposal procedures
• Batch control descriptions
• A written statement signed by the owner of the property, or the owner’s agent, identifying the physical location of the property and acknowledging/consenting to manufacture the cannabis on the property.

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.

​Tier	Annual Revenue	Fee
Tier 1	Up to $100,000	$2,000
Tier 2	$100,001 - $500,000	$7,500
Tier 3	$500,001 - $1,500,000	$15,000
Tier 4	$1,500,001 - $3,000,000	$25,000
Tier 5	$3,000,001 - $5,000,000	$35,000
Tier 6	$5,000,001 - $10,000,000	$50,000
Tier 7	$10,000,001 and above	$75,000

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.