Legal marijuana is big business in the United States. In 2016, cannabis sales grew by 30 percent, hitting an unprecedented $6.7 billion. The industry is poised for significant future growth, with some experts predicting that it will expand faster than the dot-com boom.
Those who wish to participate in this thriving industry must pay careful attention to state and local regulations. The rules are often complicated, and businesses operating in California only have until January 1st, 2018 to be fully compliant. Here’s what you need to know.
California State Cannabis Licensing
In the state of California, medical and adult-use cannabis is primarily regulated by the Bureau of Cannabis Control (BCC). This government agency is responsible for licensing testing labs, distributors, retailers, and microbusinesses. The licensing rules are still being reviewed and are expected to be released in November of 2017.
Beginning in January of 2018, the bureau will begin issuing temporary licenses. These licenses allow cannabis businesses to engage in activity for a period of 120 days. To be eligible, the business must already have a locally-issued permit, license, or other authorization.
Local Regulatory Enforcement
Although the BCC is responsible for issuing licenses, enforcement will primarily occur at the local level. This means that city and county rules and regulations will be just as important as Federal and state laws. You must ensure that your location is zoned for your business type and that your neighbors won’t object to you operating in your chosen location.
It’s a good idea to find out who your regulators and inspectors are and develop a rapport with them. Invite them to visit your location and advise staff members to be extra friendly. It’s always good to have allies, and it may help you to get some leeway if you get into a sticky situation.
Before completing your licensing application, you should create a written business plan that reflects your understanding of local regulations. You will need to submit a copy of your business formation documents and provide information about all owners and investors. Any serious legal convictions or felonies can be a red flag that causes your application to be thrown out.
Despite the growing number of states that allow medical and/or adult cannabis use, the Federal government still treats it like any other controlled substance. This is one of the many reasons that regulations are constantly prone to change. In some cases, these changes can go into effect in a very short period of time, sometimes within days.
Cannabis businesses need to proactively stay on top of compliance updates. Join email lists and regularly check the websites of your state and local regulatory agencies. Make sure you are flexible and open to changing your business processes quickly if the need should arrive. Operating under a compliance-centric business model will help you to stay out of trouble and evolve as the rules change.
Although it is possible to maintain your licensing and compliance requirements on your own, many business owners are finding that it’s better to outsource this important task. Magna Wealth Solutions provides administrative, operational, and compliance support to help you keep up with the ever-changing Cannabis industry.
Some Final Thoughts
Compliance requirements will remain an important part of your business for the foreseeable future and you will likely have to allocate some overhead dollars to staying on top of them. Continue to strengthen your industry relations, ensure you have proper policies and procedures in place, and thoroughly train your staff.
Perhaps the most important thing to remember is to always conduct yourself with the utmost professionalism.
When you are representing your business, your actions are a reflection on the entire cannabis community. Make compliance one of your top priorities and be open and amiable to change. This will put you in the best possible position for continued business success.