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Which cannabis licensing classification is right for your business?

With the passing of California Senate Bill 94 and the effective merging of recreational and medicinal cannabis licensing regulations, it’s easy to be confused about where your business fits in the legal licensing world. We’ve compiled an easy-to-understand listing of the six different license categories available from the state, along with which regulatory agency your license will come from.

cannabis licensing classification

 

Cultivator

A cultivator is a person or business who is in the business of planting, growing, tending, harvesting, drying, curing, grading or trimming cannabis. There are several subtypes of cultivators under state law, including Type 1 (specialty outdoor), Type 2 (small outdoor) and Type 4 (nursery).

Regulatory agency: CalCannabis Cultivation Licensing, a division of the California Department of Food and Agriculture (CDFA)

Manufacturer

Instead of growing the product, a manufacturer deals with cannabis or cannabis products after the growing and harvesting is over. In essence, a manufacturer is a person or business who prepares cannabis or its products at a fixed location. They package or repackage cannabis or its products, or they label or relabel the containers or packages.

Regulatory agency: Manufactured Cannabis Safety Branch (MCSB), a division of the California Department of Public Health (CDPH)

Distributor

A distributor is person or business who procures, sells and/or transports cannabis between licensed cannabis businesses (including a cultivator, manufacturer or retailer).

Regulatory agency: Bureau of Cannabis Control (BCC)

Retailer

A retailer is a person or business who sells cannabis and/or cannabis products directly to consumers. They will have a physical location where cannabis activities are conducted, and doesn't necessarily have to be open to the public — they may exclusively sell via delivery.

Regulatory agency: BCC

Microbusiness

A microbusiness is an all-in-one business where cultivation of cannabis takes place on an area less than 10,000 square feet — and the business also acts as a distributor, manufacturer and retailer.

Regulatory agency: BCC

Testing Lab

State laws require cannabis and cannabis products to undergo testing for quality assurance and inspection prior to being offered for retail sale. Often, distributors deliver the product to a testing lab for batch testing and certification, and then retrieve the samples before delivering to a manufacturer or retailer.

Regulatory agency: BCC

Licensing for your cannabis business may seem overwhelming at first, but knowing the differences between the types of licenses (and where they come from) is an important first step. 

Learn about California retail cannabis tax in our tax overview.

CCA can help you take that first step. Contact us today about the services we provide.  

Sources

Tiffany Conklin