You can’t just sell or distribute cannabis. You need a cannabis selling license to do so. In most cases, businesses related to cannabis need a license, a permit, and other registration requirements to ensure the safety of your customers and correct taxation, among others.
In the United States and all countries, the cannabis market is strictly regulated and thus licensing, and business permit applications can be very complicated. Even requirements for compliance may vary depending on what state you are in. Also, requirements may vary depending on your cannabis business category, or whether you’re in retail or cultivation.
For a cannabis business to operate legally, you must meet all the requirements for licensing, permits, and registration. A few basics before you head to your local licensing office.
Basic Requirements for a Cannabis Selling License
Here are the basic requirements you need to come up with. As you can see, these requirements are similar to the requirements needed to apply for regular or traditional business.
1. Your Business Details and Information
You can incorporate your cannabis business or create an LLC. This is necessary as these protect your assets from any kind of possible debts and liabilities, which can be the result of your business.
2. A General Business License
This is a license that’s annually renewed. This is also needed so your company can operate in the county or city. A general business license is not your cannabis selling license, and thus, you still need the authorization to sell cannabis.
3. Federal Tax Identification Number
Your Tax ID number may also be called your EIN or employee identification number. You need this to identify your cannabis business for anything tax-related.
4. DBA (Doing Business As) Filing
The DBA is a permit that allows you to start doing business using the same name that’s not the same as the one in your incorporation documents
5. Sales Tax Permit
A sales tax permit is needed by retailers of digital and physical products located offline or online. If you are going to collect state and local taxes, then you will need a sales tax permit.
6. Other Permits
There are other permits that you need as you apply for a cannabis selling license. You will need a health or sanitation permit if you’re business involves preparing marijuana edibles or other types of cannabis food items. There are also some permits needed for signage, land use, and zoning.
Take note that the requirements to get a business permit for a cannabis shop located in your home is similar to the requirements for an actual, physical cannabis dispensary.
Different Licensing Requirements for a Cannabis-related Business
Requirements needed to apply for a cannabis-related business vary from one state to another. In some states, open application is available, and thus, they may provide many licenses. Some states are not as open and may only have limited licenses.
Also, there are some restrictions according to the background of the business owner. For instance, if you have previous criminal convictions, then your application may not be accepted. This rule is not just for business owners but also for employees and contractors.
What Department Should You Go To?
Again, each state has a different rule when it comes to licensing requirements and applications. For instance, if you’re in California, then you may apply to any of these three offices:
1. CalCannabis Cultivation Licensing
The CalCannabis is under the California Department of Food and Agriculture. This department is where you need to register if you want to cultivate adult-use and medical cannabis. The CalCannabis is also the agency that tracks and traces the movement of marijuana products over the distribution chain.
2. Bureau of Cannabis Control
The Bureau of Cannabis Control is in charge of releasing commercial cannabis permits and licenses for recreational and medicinal use. This agency offers licenses that are particular about a certain retailer, testing facility, distributors, micro-businesses, and other events related to cannabis.
3. Manufactured Cannabis Safety Branch
The Manufactured Cannabis Safety office under the California Department of Public Health and is responsible for the regulation of the cannabis manufacturing market. Included are businesses that make edibles used for therapeutic purposes and for adult-use as well.
Licensing for Different Cannabis Business Category
A cannabis-related business will be regulated depending on different factors. Regulation is made in different categories, such as the cultivation of cannabis, retail, making edibles, and potential investors.
1. Cannabis Cultivation
Even in states where recreational cannabis is permitted, cannabis growing is strictly regulated. If you want to start a cannabis cultivation business, then you need a significant investment, a site plan, cannabis growing knowledge, and more.
2. Retail of Cannabis Products
Retailers should guarantee the quality and the number of their supplies. If this is your preferred business, you need to learn how to limit the amount of weed for a customer and any limitations on the pricing.
For example, you wish to open a retail shop in Nevada; this state requires cannabis business owners at least $250,000, all in liquid assets that may be converted in 30 days after a liquidation request. And if you’re applying for multiple licenses for different retail outlets, the said amount must be available for every establishment.
3. Making Edibles
In some states, you may be required to cook and prepare your products in a commercial kitchen. You may also be asked to produce all the ingredients on site.
4. Cannabis Investors
If you want to invest in cannabis stocks, you must follow the statutory and regulatory provisions of the law.
Employees working in a cannabis business are required to get a certified agent card. To secure this card, the employee must be subjected to a background check. In Colorado, there are two occupational licenses: Key Employee and Support Employee. These are required for MED Medical & Retail cannabis businesses.
Key employees are those who make management decisions that can have a direct impact on the business. Examples are the master growers and those who harvest and dry up plants. Meanwhile, support employees are for people who work in the business but do not have any demand or personal decision on the company.
Local Cannabis Business Licensing Regulations
The following are different licensing programs that are available from different states:
- Alaska – medical and recreational cannabis is allowed in Alaska. If you want to start your own marijuana business, apply from the Marijuana Establishment License office online. You need your application documents for cannabis cultivation facilities, testing, manufacturing, retail shops, handling permits, and many more.
- Arizona – in this state, the Arizona Department of Health Services regulates the medical cannabis program and is responsible for releasing dispensary certifications and registration. Any growing facility will not be set up unless it is licensed as a cannabis dispensary.
- Arkansas – the Arkansas Medical Marijuana Commission is responsible for the state’s medical cannabis program. You can apply as a dispensary or a cultivation facility from this office.
- California – it is legal to sell medical and recreational cannabis in CA as long as you have a local and a state license. You can get your license at the Manufactured Cannabis Safety Branch, Bureau of Cannabis Control, and the CalCannabis Cultivation Licensing. The kind of license needed will determine which office will provide the license.
- Colorado – medical and therapeutic cannabis are permitted in Colorado, and you can secure a medical marijuana business permit or a retail marijuana business permit. Both will require you to confirm local authority and allow your business to operate within Colorado.
- Connecticut – The Medical Marijuana Program of the state is managed by the Connecticut Department of Consumer Protection. You can apply for a license to be a producer or a dispensary facility. Only a limited number of licenses are available.
- Delaware – In Delaware, the Medical Marijuana Program is a part of the Public Health Division. Despite the legalization of medical cannabis, the state has a very limited number of brick and mortar shops known as “compassion centers.”
- Florida – In Florida, the Office of Medical Marijuana Use, which is a part of the Florida Department of Health, is the one in charge of implementing licensing for businesses related to dispensing, processing, and cultivation of medical cannabis. At the moment, it is not accepting any kind of application.
- Hawaii – The Medical Cannabis Program in Hawaii is implemented by the Hawaii Department of Health. As of the moment, the department has only opened 8 licenses for dispensaries in the state. There is no information yet if the state will issue more licenses.
- Illinois – The Department of Financial and Professional Regulation is the agency where dispensary licenses are issued. Meanwhile, the Illinois Department of Agriculture registers and regulates the state’s 22 cultivation centers. The application for the cannabis selling license is closed.
- Louisiana – There is a legal system for patients who possess a valid recommendation from their physicians to purchase medical cannabis. There are very limited specialty-licensed pharmacies that distribute cannabis.
- Maine – Maine’s Medical Use of Marijuana Program is under the Division of Public Health Systems. You can get licenses here, but these are not available at this time. There are 8 dispensaries in the state, and since 2018, you may apply for a license to start a retail business or a cannabis social club.
- Maryland – All the policies, regulations, and procedures about medical marijuana are handled by the Maryland Medical Cannabis Commission. The body has issued approvals for dispensaries to more than a hundred companies. Some companies are still in their early stages of approval.
- Massachusetts – Massachusetts’ Medical Use of Marijuana Program is under the state’s own Department of Health. To open a Registered Marijuana Dispensary, you must apply for an RMD Certificate of Registration, and a letter of intent should be submitted as well.
- Michigan – The Medical Marijuana Program and Facility Licensing Division are under the Bureau of Medical Regulation. Those who want to grow, processes, transport, and retail cannabis must secure a license from the Department of Licensing and Regulatory Affairs.
- Minnesota – Currently, licenses are no longer available. There are two registered distributors and manufacturers of cannabis selected by the state’s Department of Health. Minnesota calls its dispensaries “cannabis patient centers.”
- Montana – The state has a Medical Marijuana Program, and this is under the Montana Department of Public Health and Human Services. Applications for permits and licenses to become a provider, dispensary, or testing lab are occasionally offered.
- Nevada – Retail cannabis businesses are regulated by the Nevada Department of Taxation. It is also the department that regulates Nevada’s medical marijuana distribution. In 2018, licenses for retail establishments were only granted to marijuana establishment certificate owners.
- New Hampshire – New Hampshire has a Therapeutic Cannabis Program, and this is under the New Hampshire Department of Health and Human Services. This body manages several Alternative Treatment Centers, and licenses for medical cannabis businesses are not currently available.
- New Jersey – The state has a Medical Marijuana Program, and this is managed by the New Jersey Department of Health. New Jersey refers to businesses that produce, distribute, and retail cannabis as “Alternative Treatment Centers.” It is no longer issuing any licenses or permits.
- New Mexico – The Medical Cannabis Program of the state is under the New Mexico Department of Health. If you want to grow, distribute, and retail, medical marijuana, you must be registered as a Licensed Non-Profit Producer. Application to be an LNPP is closed, and it is no longer accepting applications for licenses.
- New York – The Department of Health in the state manages the Medical Marijuana Program. Medical cannabis is manufactured and dispensed only by Registered Organizations, and the state is no longer accepting any applications.
- North Dakota – The Medical Marijuana Program of the state is under the Division of Medical Marijuana, which is managed by the North Dakota Department of Health. Dispensaries are called compassion centers, and at the moment, application for licenses to become a compassion center is closed.
- Ohio – Ohio has a limited number of licenses provided to growers, retailers, and dispensaries in the state. They may issue more if this is needed in the future. Only medical cannabis is illegal in Ohio.
- Oregon – You need a license to start a medical and recreational cannabis-related business. The state provides separate licenses for dispensaries and growers, and the Oregon Liquor Control Commission License handles applications for adult-use cannabis licenses.
- Rhode Island – Licensing for “compassion centers” are handled by the state’s Department of Business Regulation. The state will announce application periods, and it is only at these times when interested people are allowed to submit their applications.
- Vermont – The Marijuana Registry is under the Department of Public Safety, and this body oversees the registration of certificates for dispensaries. There are only a handful of dispensaries in the state, and the department will open a period of application for more dispensaries once the number of registered patients has exceeded 7,000
- Washington – If you want to grow, process, or retail cannabis, you need a marijuana license, and this is available at the Washington State Liquor and Cannabis Board. At present, it is no longer accepting license applications.
- Washington DC – You can use recreational and medical cannabis in Washington, DC; however, there are no retail businesses that sell recreational weed. The Medical Marijuana Program of the state is under the DC Department of Health, but it’s no longer accepting any applications for medical marijuana businesses.
Most states offer restricted cannabis selling license requirements and are accompanied by high fees, very strict rules, and financial reporting. If you would like to learn more about securing a cannabis selling license, inquire from your local licensing department.