How to Start a Cannabis Business in California

Have you ever tried to do something challenging but couldn’t succeed? If yes, you’re not the only one. Surprisingly, someone tried the same thing and had success. Of course, you could have succeeded if you had the right information.

That said, you already know hard starting a cannabis business in California is. Think of the tax laws, license permit, and other regulations. But we’re here to make the process simple. Oh! We want you to succeed whenever you try.

Check out these guidelines!

Choose Your Business Structure and Name

Selecting your entity type and name is the first step to starting a successful business. Remember, whether for-profit or non-profit, the business structure determines your tax fees, ownership interests, liability, and asset transfers. You can meet business experts or check online to get more information on cannabis business structures.

Register Your Business

Now that you’ve picked the perfect organization type, the next step is to register with the California State Secretary. Except for Sole Proprietorship and Partnerships, other corporations are required to register.

If Possible, Register a Pseudo Business Name

You might decide to operate your business under a different name instead of the registered one. If so, file with the county business area’s county clerk.

Get Your Licenses

Your cannabis business needs a license to operate in California, and your business type determines the issuer. Remember, this license is issued by three agencies, the Cannabis Control Bureau, CDFA, and California Public Health Department. Let’s consider their portfolios:

·         Cannabis Control Bureau

This agency issues licenses for businesses that deal with adult and medical cannabis use.

·         California Department of Food and Agriculture (CDFA)

The CDFA issues cannabis business licenses for marijuana growers and tracks its cannabis distribution and movement chain.

·         California Public Health Department (CDPH)

Apart from playing a regulatory role to ensure consumer’s safety, the CDPH provides licenses for cannabis edibles manufacturers.

Cost of Cannabis Business License

Surprisingly, California doesn’t charge a flat rate for the marijuana business license; instead, the fees are dependent on your application type. Before you apply, you’re expected to check the chart to know the corresponding business tier. However, the fees cost about $500 to $300,000 depending on the company size and expected revenue.

Your Age Matters

Before you apply for a California license, you must be at least 21 years old, including financial partners and employees.

How About Past Criminal Records?

Though the California license rule does not stop people with a past criminal record from applying, those with cleaner records might be preferred. Meanwhile, you should check with your local county to know the laws that govern marijuana sales and distribution. That’s because the California state won’t issue a license to businesses located in areas where the product is banned.

That said, you should prove to the authorities that you understand and will comply with the state’s laws. For this reason, you need advisers in areas of law, finance, business, and the environment. Since this requires money, you should consider how to source for funds.

How to Get Finances

It’s almost impossible to get a loan from a bank in California, that’s because the drug is still illegal at the federal level. In other words, many lending institutions can’t offer your financial assistance. Cheer up; there are cash institutions that are dedicated to offering cannabis business loans in California. Once you’ve complied with the state’s laws, you shouldn’t worry any longer about obtaining a business loan.

Bottom Line about Running Cannabis Business in California

  • You experience some difficulties when sourcing for bank loans.
  • You pay huge taxes and interest. 
  • Because of federal regulations, your customers can only pay for your products with cash. So, installing an ATM at your business premises will make cash transactions easier. 
  • You can’t store cash proceeds in the bank, so; look for alternative cash deposits solutions.