How to Open a Dispensary in California

This week marks the start of an exciting time for prospective Recreational Dispensary Owners in the state of California. After a long-awaited vote, Proposition 64, also known as the California Marijuana Legalization Initiative, received 56.04% of the yes votes and has officially passed! This means that the residents of California have made the decision to legalize recreational marijuana, and we’re going to share with you all the steps you’ll need to follow for how to open a dispensary in California.

For those of you who are at all unsure about this HUGE opportunity, rest assured:  A recent study by New Frontier Data predicts that as a result, California’s market is expected to reach $7.6 billion by 2020!

It goes without saying that this historic vote is exciting for many, and we are eager to see the actual law and application process be revealed in the coming weeks. Because, like you, we are thrilled by this news, we will keep a close watch on any updates to the new legislation and provide any information in the Complete Dispensary Package within days of the application information being released. For now, let’s take a look at what the amendment actually says.

What does the Amendment Say?

*Please first note that because measure is 65 pages in total, we are only paraphrasing below. If you want to read the full measure for yourself, you can find it here.

Ultimately, the California Ballot label summary stated that Prop 64:

“Legalizes marijuana under state law, for use by adults 21 or older. Imposes state taxes on sales and cultivation. Provides for industry licensing and establishes standards for marijuana products. Allows local regulation and taxation. Fiscal Impact: Additional tax revenues ranging from high hundreds of millions of dollars to over $1 billion annually, mostly dedicated to specific purposes. Reduced criminal justice costs of tens of millions of dollars annually.”

In addition, a longer summary of ballot also included these bullet points:

• Legalizes marijuana under state law, for use by adults 21 or older.
• Designates state agencies to license and regulate marijuana industry.
• Imposes state excise tax of 15% on retail sales of marijuana, and state cultivation taxes on marijuana of $9.25 per ounce of flowers and $2.75 per ounce of leaves.
• Exempts medical marijuana from some taxation.
• Establishes packaging, labeling, advertising, and marketing standards and restrictions for marijuana products.
• Prohibits marketing and advertising marijuana directly to minors.
• Allows local regulation and taxation of marijuana.
• Authorizes resentencing and destruction of records for prior marijuana convictions

Overall, we can take this to mean that anyone at least 21 years old will be free to use marijuana in California without a medical license. To ensure the safety of its use, the state will establish standards and designate agencies (some of which that are yet to be named) for licensing and regulation. These agencies will be a part of what determines the distribution and use of marijuana, but they won’t be alone. We also need to consider how the new law will be locally enforced.

How will the Law be Enforced?

Across California, laws around marijuana use will change, and even local governments will be permitted to make their own amendments. It will be important for us and you to stay on top of this legislation as it is put into place, and make sure your dispensary is set up properly. As the proposition is worded, the ways in which recreational marijuana use will be enforced are as follows:

• New laws will aim to take nomnedical marijuana production and sales out of the hands of the illegal market so they can be regulated to prevent access by minors and protects public safety, public health, and the environment.
• California will control “the cultivation, processing, manufacture, distribution, testing and sale of nonmedical marijuana through a system of state licensing, regulation, and enforcement.”
• Local governments will be permitted to enact additional requirements or ban recreational marijuana based businesses.
• Marijuana will be required to be tracked from cultivation to sale and tested independently for presence of contaminants, including mold and pesticides, before it can be sold by licensed businesses.
• Recreational marijuana sold by licensed businesses in California must be packaged in child-resistant containers and labeled so that consumers are fully aware of potency and the effects of marijuana.
• Marijuana businesses must adhere to strict environmental and product safety standards as a condition of maintaining their license.
• Recreational marijuana will not be allowed to be sold by businesses that also sell tobacco or alcohol.
• Marketing of MJ to people under 21 or near schools is prohibited.  
• MMJ patients will now be required to get a new recommendation by January 1, 2018 that adheres to stricter standards.
• Adults 21 and over can grow, purchase and possess marijuana.   
• Local governments can limit outdoor growing of cannabis through zoning regulations.
• Cannabis cannot be consumed in public places where children are present including schools.  
• It is still illegal to drive a car or other vehicle while under the influence of marijuana.
• Marijuana cannot be grown on public lands.
• Employers may form policies around marijuana use.  
• Recreational marijuana will be taxed so that use by minors, abuse by adults, and the illicit markets will be discouraged
• Tax revenue from sales will, “Generate hundreds of millions of dollars in new state revenue annually for restoring and repairing the environment, youth treatment and prevention, community investment, and law enforcement.
• Illegal production and distribution of cannabis will be prevented
• Stop the movement of marijuana from California to other states or countries.
• Ensure police resources are preserved for preventing and prosecuting violent crime.
• Reduce barriers of entry into the legal, regulated market for recreational marijuana businesses
• Minors who have committed marijuana-related offenses to complete drug prevention education or counseling and community service. (z)
• Courts may now resentence people currently serving sentences for offenses for which the penalty is reduced by the new laws as long as they don’t pose a risk to public safety.
• Courts may also redesignate or dismiss such offenses from the criminal records of people who have completed their sentences.
• Industrial hemp can now be grown as an agricultural product,  and regulated separately from the strains of cannabis with higher THC.

Phew! Congratulations on making it all the way through the list. While there are a lot of ins and outs, this is good news overall, and we’ll be here to help guide you through the process. If you’re amped and ready to get started, let’s move on to the timeline for the legislation.

What is the Timeline for Opening a Dispensary in California?

We’ll start with the fun part: With the passing of Proposition 64, possession of an ounce of marijuana for recreational use is immediately legal for adults over 21. Unfortunately for us, the less fun part is that recreational marijuana cannot legally be sold until the state begins licensing dispensaries. When will that be? Well, the measure states that California has until Jan. 1, 2018, to begin issuing permits, which will be issued by the Bureau of Marijuana Control. BUT the tax revenue the state (and local municipalities) are due to receive cannot happen until permits are issued and dispensaries are opened.

In the meantime, lawmakers in California are considering allowing interim sales licenses to speed up the process until the formal procedures are fully in place. If you, like them, don’t really want to wait – don’t! You can start preparing yourself to have a successful dispensary now.

What Can I Do Today to Start the Process of Opening a Dispensary in California?

Although the exact timetable for recreational dispensary licensing is still being determined, there is a list of things you can get started on today to ensure you are successful in opening a pot shop in California. The first thing we recommend you do is get our free download to see what it takes to Get Started and Get Approved. Once you have that, you can also begin to get your business plan together. Having this completed will help you attract investors and ensure you have taken into consideration everything you’ll need to have an incredibly successful California Dispensary.  

Or, if you don’t want to waste any time, you can get all the information in one easy place. That’s where we come in! We  have already organized all the information you need to get licensed in this undeniably lucrative business. There’s no need to wait for legislation to be finalized, get started now! And keep in touch, because we’ll update the procedures for recreational marijuana dispensaries in California as soon as they’re in place.