Want To Own A Cannabis Retail Store? Here Are 11 Things You Need To Know

Retail is, perhaps, the most popular segment of the cannabis supply chain. As of Jan. 1, state licensed dispensaries around California are officially open to anyone 21-years or older. But in terms of opening a cannabis retail location, there’s a lot that needs to be done prior to opening a shop. Here are some important tips you need to know in order to take those first steps toward licensure.

The Bureau of Cannabis Control is overseen by the Department of Consumer Affairs: 

The state department in charge of issuing retail licenses is the Bureau of Cannabis Control (BCC), a branch of the Department of Consumer Affairs. They’re the lead cannabis agency as they oversee and issue licenses to the majority of the supply chain, including: distribution, lab testing and microbusinesses.

Retail is the fourth part of the cannabis supply chain:

The supply chain goes as follows: Cultivation  Manufacturing  Distribution  Testing  Retail  Microbusiness. The retail sector of the supply chain is a part of the BCC umbrella, along with distribution, lab testing and microbusinesses. As explained in our previous posts, CalCannabis is a branch of the California Department of Food and Agriculture, which controls all aspects of cultivation. Lastly, the California Department of Public Health has also added a new department called the Manufactured Cannabis Safety Branch, which oversees all things manufacturing. 

Follow up with the Bureau:

If you’re not sure how to stay up to date with the Bureau, this is what you can do: Sign up for their email list here. They’ll inform you about when a workshop, lecture or meeting comes to your area regarding distribution, testing, retail and microbusinesses. This is also a good way to stay up-to-date on when they add new information, and forms or applications to the site. You can also reach them via email at bcc@dca.ca.gov . 

Temporary retail license applications are now being accepted:

Thanks to the Business and Professions Code section 26050.1, the BCC is allowed to issue temporary licenses—and they’re officially accepting applications. A temporary cannabis lab testing license is a conditional license that allows a business to engage in commercial cannabis activity for a period of 120 days. The Bureau can only issue a temporary license if the applicant has valid license, permit, or other authorization issued by the local jurisdiction. You can download the temporary license form here.

You’ll need to differentiate your license type:

Not only will you have to determine whether your retail location will be for adult-use or medical (or both) purposes, but you’ll also have to differentiate between non-storefront retailer (delivery!) and retailer (storefront sales). 

  • Delivery is defined as: “Sells and delivers cannabis or cannabis products to consumers. A retailer non-storefront must have a licensed premises but is not open to the public, and conducts sales exclusively by delivery.” In other words, your delivery has to be connected to an actual brick and mortar place, or office, that the business operates out of. This building cannot be open to the public.
  • Retailer is defined as: “Sells and delivers cannabis and canna-products to consumers. A retailer must have licensed premises, which may be open to the public to sell flower and cannabis products to customers. Sales may also be conducted by delivery.”

Retailer rules:

  • A dispensary store or delivery service can be for both medical and adult use. 
  • Cannabis sales from retail stores and deliveries may only occur between 6:00 a.m. and 10:00 p.m. (pacific time)
  • All cannabis goods must be placed in an opaque exit package prior to leaving the premises (think a white paper prescription bag, or to-go package)
  • Deliveries may only be made by employees of the retailer
  • Deliveries must be to a physical address, only
  • A delivery vehicle may not contain more than $3,000 of cannabis or canna-products at any time
  • The retailer must be able to immediately locate all delivery vehicles
  • A delivery vehicle must be a car
  • A retailer cannot package or label cannabis goods
  • The exception: Any dried flower held in inventory by a retailer at the time of licensure that is not packaged may be packaged by the retailer into individual packages for sale beginning January 1, 2018 and before July 1, 2018.
  • A retailer cannot accept, possess or sell cannabis goods if they’re not packaged as they will be sold at final sale
  • Purchased cannabis goods cannot leave the premises unless in an opaque exit package

You must provide a premises diagram:

Just like distribution and lab testing, you must provide an exact premises diagram. The premises diagram must be drawn to scale and clearly identify property boundaries, entrances, exits, interior partitions, walls, rooms, windows and doorways. The activities in each room and the location of cameras must be identified on the diagram. You can download that form here.

The cannabis retail application will ask you for contact and otherwise sensitive information:
If you’re applying as an individual, you must provide your first and last name. If the applicant is a business entity, then the full legal business name is required. The applicant business name must be identical to the name listed on the business-formation documents submitted to the Bureau. The applicant must provide the physical address of the premises if the mailing address if it is different. The applicant must also provide the business website address, email address, and telephone number.

Also each applicant must provide a valid Social Security Number, an Individual Taxpayer Identification Number, or a Federal Employer Identification Number before an application can be approved.

Point person and ownership:

You’ll be asked to identify who the point contact person of the business will be. This individual will basically be the person the Bureau has on speed dial to call in case there is an issue or question of any kind. This person technically doesn’t have to be the owner. But the applicant must provide that persons name, title, telephone number and email address.

You’ll also be asked to identify the owner of the business. An owner is defined as:

  • A person with an aggregate ownership interest of twenty percent or more in the person applying for a license or a licensee, unless the interest is solely a security, lien, encumbrance. 
  • The CEO of a nonprofit or other entity. 
  • A member of a nonprofit’s board of directors. 
  • An individual who will be participating in the direction, control, or management of the commercial cannabis business, including: 
  • A partner of a commercial cannabis business organized as a partnership;
  • A member of a limited liability company of a commercial cannabis business organized as a limited-liability company;
  • An officer or director of a commercial cannabis business organized as a corporation.

Proof of compliance and right to occupy:

In order to get licensed, the Bureau requires that the city in which your retail business exists sends proof showing they approve of your business and confirms that it’s compliant with all local laws. 

Additionally, you’ll be required to show proof that you’re allowed to conduct cannabis activities in the building in which the business operates. If the applicant owns the property, a copy of the title or deed must be provided. If the applicant does not own the property, a statement from the property owner that the applicant has the legal right to occupy the property to perform commercial cannabis activities and a copy of the applicant's rental agreement must be provided to the Bureau. 

Be certain about your application:

The Bureau is officially accepting applications for cannabis-retail locations as of January 1, 2018. Hallelujah! But keep in mind that if any of the information you provide is wrong (or if any of your info changes after you submit the form), your application will be put on hold—and the holding period, we’ve heard, can be around 90-days. So it’s worth the extra effort to fill the apps out carefully. 

Here’s the official outline of what you’ll need for a temporary license, which lasts for 120-days. You can download the official temporary license application here.

You can study the checklist of the information you’ll need for the annual retail license here. When you’re ready to apply for the official annual cannabis retailer license, download this form.