Marijuana & Business as Usual In California
Well not quite, because now we have to follow standard business practices which will be a pain for some. Instead of the feds breathing down our necks, we have AUMA (The Control, Regulate, and Tax Adult Use of Marijuana Act of California) on its way to passage. Our phones are ringing off the hook. Here are the hot FAQ’s we are currently answering.
Question: Who Is Regulating the California Cannabis Business Now?
AUMA established a Bureau of Marijuana Control in the Department of Consumer Affairs. Its job is to license and regulate the industry although it is still finding its feet. Note that this is not the same as the Bureau of Medical Marijuana Regulation. The Bureau of Marijuana Control should supersede it but this will not happen right away.
These bureaus are not the only regulators we may have to placate. Marijuana retailers, distributors, and micro businesses still have to deal with the Department of Consumer Affairs. The Department of Food and Agriculture will continue to license and oversee marijuana cultivation, with the Department of Public Health taking care manufacturing and testing. Finally, the State Board of Equalization will collect marijuana taxes. Well we did want government to treat us like a business.
Question: To What Time Line We are Working?
Licenses are supposed to be issued starting January 2018. Law enforcement is already stirring the pot and bureaucracy inevitably spins the simple into something complex. Experience in other states suggests the possibility of burning cash flow while waiting for a license. Don’t over-extend yourself and be patient.
Question: Must I Live in California to Get a License?
Yes, you have to, because that’s what the law says at least through to 2019, even though this may not make sense to you from where you sit. The law is clear. No licensing authority shall issue or renew a license to any person that cannot demonstrate continuous California residency from or before January 1, 2015.
There is an outside possibility of out-of-staters with a 50%-plus stake becoming involved in the business. Those in other states considering investing in California cannabis now do so in muddy waters.
Question: I Have a Criminal Record. Can I Get Around It
AUMA gives California the right to deny a license to anyone who has been convicted of an offense that is substantially related to the qualifications, functions, or duties of the business or profession for which the application is made. Traditionally, these may include violence, fraud, deceit, or embezzlement. If you have a marijuana conviction, join the queue to have it uplifted.
Question: I Have Heard There Are Different Types of Licenses
There are nineteen different types of licenses. Don’t shoot blind. Ask your adviser which of these relate to you.
- Type 1 = Cultivation; Specialty outdoor; Small
- Type 1A = Cultivation; Specialty indoor; Small
- Type 1B = Cultivation; Specialty mixed-light; Small
- Type 2 = Cultivation; Outdoor; Small
- Type 2A = Cultivation; Indoor; Small
- Type 2B = Cultivation; Mixed-light; Small
- Type 3 = Cultivation; Outdoor; Medium
- Type 3A = Cultivation; Indoor; Medium
- Type 3B = Cultivation; Mixed-light; Medium
- Type 4 = Cultivation; Nursery
- Type 5 = Cultivation; Outdoor; Large
- Type 5A =Cultivation; Indoor; Large
- Type 5B = Cultivation; Mixed-light; Large
- Type 6 = Manufacturer 1
- Type 7 = Manufacturer 2
- Type 8 = Testing
- Type 10 = Retailer
- Type 11 = Distributor
- Type 12 =Microbusiness
AUMA gives priority to those already in the business before January 1, 2016. It makes a deal of sense to align your application to a previous activity if you have one.
Question: Are There Any Local Differences
There most definitely are. Individual states and cities can set their own rules regarding where trading and consumption may take place. Find out what other people in your district are doing. Cannabis businesses must be at least 600 feet from schools and youth centers. There are also rules preventing too many licenses in the same area. Get to know your local limitations.
Question: Please Tell Me More about Local Limitations
Local government still holds the overriding key. AUMA has the following to say about this, which boils down to a local community having the right to say ‘no’.
Nothing in this division shall be interpreted to supersede or limit the authority of a local jurisdiction to adopt and enforce local ordinances to regulate businesses licensed under this division, including, but not limited to, local zoning and land use requirements, business license requirements, and requirements related to reducing exposure to second hand smoke, or to completely prohibit the establishment or operation of one or more types of businesses licensed under this division within the local jurisdiction.
There are a number of changes on the way for California marijuana businesses. We urge you to follow the business developments of AUMA. Take care out there