The background checks have tightened up and now apply to all ‘owners’ as defined. In a publicly traded company, this means anybody with more than 5% interest. In other entities, the breakpoint is 20%. If the investor is a business, then the CEO and directors are also ‘owners’. The same applies to a person managing the actual applicant.
Criminal Background Checks and Disclosures
These rules apply equally to growers, distributors, transporters, and retailers. Their ‘owners’ must furnish details of post-juvenile convictions, excluding traffic citations. In addition, ‘owners’ of manufacturing enterprises must admit to all convictions with a significant bearing on their activity.
Financial Background Checks on Owners
‘Owners’ of distributor, transporter, and retailer enterprises must declare all business funds in accounts with financial institutions, and their own investments in the business. Furthermore, the regulator wants to know about all gifts deployed in the enterprise.
Order of Priority for Granting California Cannabis Licenses
Priority applies to businesses already operating by January 1, 2016. They must back this up by providing business documentation and accounting records. Moreover, the business must be in ‘good standing’ as attested by a local jurisdiction. All operations in business before January 2, 2018 may continue until the regulator reaches a decision. If denied, they must cease trading immediately and disband.
Regulating Agencies for Different Business Types
Cultivators fall under the remit of the California Department of Food and Agriculture. This administers 15 different licenses depending on the cultivation niche. Farms must be 600 feet away from schools, and they must list their water and energy resources.
The Department of Public Health issues Manufacturer licenses of four different kinds. They apply to anyone producing, processing, or compounding cannabis products by extraction or infusion. Only certain extraction methods are legal and a licensed engineer must certify them as appropriate and safe.
Retailers, Deliverers, Transporters and Distributors must apply for licenses at the Department of Consumer Affairs.
- Retailers must be 600 feet away from schools, may not sublet licensed premises, and must retain track-and-trace inventory records for seven years.
- Deliverers must deliver all product themselves between 6 a.m. and 9 p.m. They may not deliver to public-owned land or public agencies elsewhere. Total product value per route may not exceed $3,000.
- Transporters may only move cannabis products between licensees. They may not hold this on their premises for more than 72 hours. They must include detailed procedure descriptions with their applications.
- Distributors purchasing product from producers, and selling to manufacturers must submit detailed procedures for inventory management, quality assurance, and security practices.
Thorough Applications are Thus Essential
There is not an open-ended supply of licenses, and hence the authorities are not falling over their feet to issue them. Successful applicants will be those who understood the requirements, sought expert advice, and gave regulators no less, and no more than what they require.
For a very informative video on new MCRSA licensing please check out Canna Law Blog.