- Posted by Erica Treeby
- On February 24, 2017
- California, cannabis, Cannabis License, Cannabis Permit, commercial cultivation, commercial medical cannabis, delivery, dispensary, distribution, licensing, MCRSA, regulations, retail, testing, transportation
“Change is the law of life. And those who look only to the past or present are certain to miss the future.” – John F. Kennedy
When Governor Jerry Brown signed the Medical Cannabis Regulation & Safety Act (“MCRSA”) into law on October 11, 2015, the laws governing the creation and operation of medical cannabis businesses dramatically changed. MCRSA created a comprehensive state licensing system for the commercial cultivation, manufacture, retail sale, transport, distribution, delivery, and testing of medical cannabis. With 18 license types, each with its own set of restrictions and guidelines, determining which license type is right for your medical cannabis business is key to maximizing your business’s potential.
What Licenses are Available under MCRSA?
Cultivation licenses (Types 1-4) are broken down into four categories based upon the size of the grow, and the type of light used-i.e., natural (outdoor), exclusively artificial (indoor), or mixed (a combination of natural and supplemental artificial).
- Type 1: Specialty Outdoor – up to 5,000 sq ft, or up to 50 mature plants on non-contiguous plots;
- Type 1A: Specialty Indoor – up to 5,000 sq ft;
- Type 1B: Specialty Mixed-light – up to 5,000 sq ft;
- Type 1C: Specialty Cottage – up to 25 mature plants for outdoor; up to 500 sq ft for indoor; or up to 2,500 sq ft for mixed-light;
- Type 2: Small Outdoor – 5,001 to 10,000 sq ft;
- Type 2A: Small Indoor – 5,001 to 10,000 sq ft;
- Type 2B: Small Mixed-light – 5,001 to 10,000 sq ft;
- Type 3: Medium Outdoor – 10,001 sq ft to one acre;
- Type 3A: Medium Indoor – 10,001 to 22,000 sq ft;
- Type 3B: Medium Mixed-Light – 10,001 to 22,000 sq ft;
- Type 4: Nursery Outdoor/Indoor/Mixed-Light – up to one acre; license holders may also transport live plants
SB 643 and AB 243 give the Department of Food and Agriculture (DFA) responsibility for regulating cultivation. MRCSA directs the DFA to limit the number of Type 3, 3A and 3B licenses. The DFA is also responsible for implementing a unique identification program for all marijuana plants at a cultivation site to be attached at the base of the plant. The information will then be incorporated into a “track and trace” program for each product and transaction.
Manufacturing licenses are separated into two categories based upon the type of solvent used. Like Type 3 licenses, the Department of Public Health (DPH) will limit the number of licenses for manufacturers who use volatile solvents (Type 7).
- Type 6: Manufacturing using non-volatile solvents;
- Type 7: Manufacturing using volatile solvents.
Testing licenses are designated Type 8. The DPH is responsible for ensuring that all cannabis is tested prior to delivery to dispensaries or other businesses, and will specify how such testing will be conducted. Type 8 license holders must test for THC, cannabinoids, contaminants, microbiological impurities, among other compounds listed in Business & Professions Code § 19344.
- Type 10: Dispensary- general
- Type 10A: Dispensary – no more than three retail sites
Distribution licenses are designated Type 11. All cultivation (Types 1-4) and manufacturing licensees (Types 6-7) are required to send their products to a Type 11 licensee where their cannabis products will be inspected for quality assurance before the products pass to the next stage of manufacturing or retail. Type 11 licensees must also send the cannabis products to a Type 8 laboratory for batch testing and certification.
Transportation licenses are designated Type 12. Only Type 12 license holders can transport cannabis or cannabis products between licensees, such as cultivators and retail outlets.
How Many Licenses May I Have?
Although MCRSA does not specifically limit the number of licenses a person may hold of a particular license type, it does limit the types of licenses a person may hold at one time. With some exceptions, licensees can only hold licenses in up to two separate categories.
- Specialty and small cultivator licensees (Types 1-2) may hold manufacturing licenses (Types 6-7) or Type 10A retail licenses.
- Large cultivators (Types 3-4) cannot hold manufacturing licenses (Types 6-7). However, Type 10A retail licensees may hold both manufacturing (Types 6-7) and cultivation licenses as long as their total cultivation area does not exceed four acres.
- Testing licensees (Type 8) may not hold any other license type.
- Type 10A dispensary licensees may hold any other license type besides testing (Type 8) and distribution (Type 11) licenses.
- Distributor licensees (Type 11) must also hold a transportation license (Type 12), but may not hold any other license type.
- Transportation licensees (Type 12) may also hold a Type 11 distribution license, but it is not mandatory.
When Will State Licenses Become Available?
January 1, 2018.
Do I Need a Local Permit?
Yes. You may not obtain a state permit without first obtaining a license, permit or local authorization from your local government. For example, if your city or county prohibits commercial cultivation, you may not apply for a state cultivation permit (Types 1-4).
Contact Cannabusiness Law today for guidance and expert assistance in compliance with cannabis licensing, permitting and the application process relating to commercial cannabis in California.