California
General
Jun 2022
3 min

How to Start a Dispensary in California

California's legal cannabis industry is massive, and it is growing every day. It's no surprise that starting a business in this booming market comes with its own unique obstacles that require the proper attention.  Thankfully California has provided a checklist for everything you need to do to complete applications for all cannabis business types.  Here we break down everything that's needed specifically for dispensary applicants.

In this article you'll find:

  • 10 steps required for completing a California dispensary license application
  • Required information to provide
  • Required documentation to upload to the application portal
  • List of forms needed
  • Operating Documents you need to comply with the dispensary license application (we've got it for you at the end of the article!)
  • Important contact information for the process

Starting a New Cannabis Business in California Checklist

California has created a checklist with the following necessary steps. Download the checklist here.

  • Choose an Entity Type & Business Name
  • Register Your Business with the Secretary of State
  • Register a Fictitious Business Name (If Necessary)
  • Obtain Required City and/or County License, Permit or Other Authorization
  • Obtain a Seller’s Permit and Cannabis Tax Permit from the California Department of Tax and Fee Administration
    (If Necessary)
  • Obtain Required State License(s) [DCC]
  • Employer Responsibilities [IRS, FTB, EDD]
  • Tax Information [FTB, EDD, CDTFA, IRS]
  • Ongoing Business Registration Requirements
  • Trademarks and Service Marks


10 Steps for Completing a Dispensary License Application

The Department of Cannabis Control wants you to have an enjoyable and informative experience. They have outlined ten specific steps for accurately completing a California dispensary license application. By following these steps in their entirety, uploading the correct documentation and providing the correct plans (sheets), you'll be on your way to success. First, decide on the type of business you want to start (this guide is for dispensaries specififcally but each business type has a similar process), then register with the California Secretary of State. Next, follow these 10 steps to starting your cannabis dispensary.


1. Decide which of the two types of retailer (dispensary) licenses in you want

  • Type 9: non-storefront retailer (delivery only)
  • Type 10: storefront retailer


2. Complete local permitting processes


Many cities and counties have rules and permitting for cannabis businesses. Some do not allow cannabis businesses. Make sure you set up your business in an area that allows commercial cannabis activity. Complete any permitting requirements your city or county requires before you apply for a state cannabis license.


3. Learn the state regulations for cannabis businesses


The Department of Cannabis Control (DCC) has requirements for standard operating procedures, training employees and how facilities must be set up. Make sure you understand and can meet these rules.


4. Gather your application information and documents


The Department of Cannabis Control has resources to help you create the documents you need during the license process.


5. Create a licensing system account


The Department of Cannabis Control has three licensing systems. Use the one that corresponds to the license type you’re applying for. Create an account in the system. Remember your username and password so you can log back in.


6. Complete your application


Fill in the required fields in the licensing system and upload any needed documents. Make sure you disclose all your business’s owners and financial interest holders. The Department of Cannabis Control licensing systems let you save your progress as you go, so you do not need to complete it all in one sitting. When you finish your application, sign and submit it.


7. Pay your application fee and submit your application


When you finish your license application, the system will tell you how to pay your application fee. Department of Cannabis Control cannot process your application until you pay your application fee.


8. Answer any emails from the licensing team


If any parts of your application are not good enough, the Department of Cannabis Control licensing team will email you. They will tell you what you need to correct and give you a deadline to respond. Responding with complete information as quickly as you can helps Department of Cannabis Control process your application in a timely manner.


9. Pay your license fee


If your application is approved, you’ll receive an email with instructions about how to pay your license fee. You can pay your fee through the licensing system via bank account/check, money order or credit card. You can also pay in cash by setting up an appointment to visit our office in person. For security purposes, no cash payments can be accepted without an appointment. Your license will be issued once we receive your payment.


10. Post your license


The Department of Cannabis Control licenses are good for one year. Once your license is issued, you can download your license certificate from the licensing system. Post your certificate in a visible place near the entrance of your business so visitors can see it.

Documents to Upload

Make sure that your application is complete by collecting the documents you will need to upload. Once complete, submit these required documents.  While this part of the process may be arduous, it is necessary. Here's a list of the documents that you will need to upload during your application process. For some of this documentation you may need to collaborate with third parties such as an architect, landlord, and labor union (contact a labor union for a labor peace agreement here).

  • Evidence that the applicant has a legal right to occupy and use the proposed location
  • A site diagram
  • A completed Commercial Cannabis Licensee Bond form for a surety bond of at least $5,000 per premises
  • Evidence of CEQA (California Environmental Quality Act) compliance
  • A limited waiver of sovereign immunity (for Native American Tribes)
  • If the business is a foreign corporation or foreign LLC: a certificate of qualification, registration, or status issued by the California Secretary of State
  • If the commercial cannabis business has more than 20 employees: (1) A notarized statement that it will enter into a labor peace agreement, or (2) A document that shows the business has already entered into a labor peace agreement  
  • If the commercial cannabis business has fewer than 20 employees, a notarized statement that the business will enter into a labor peace agreement within 60 days of hiring its 20th employee
  • A list of all owners
  • A list of all financial interest holders
  • Optional: A copy of a license, permit, or other authorization from the local jurisdiction where the licensed premises will be or is located

Submit This Information for Each Owner

While we might be used to documenting people's contributions in the business world (like in bios and resumes), it can feel invasive to document the private details of your life. However if you want to gain a dispensary license and fulfill the requirements of your state, you'll need to give certain documentation showing things like:

  • Full legal name
  • Owner’s role title within the commercial cannabis business
  • Date of birth
  • Place of birth
  • Social security number (SSN)or individual taxpayer identification number (TIN)
  • Contact information (mailing address, email address, and phone number)
  • Owner’s current employer
  • Owner's percentage of ownership interest in the commercial cannabis business
  • Owner’s government-issued ID number
  • A copy of the owner’s completed application for electronic fingerprint images submitted to the Department of Justice
  • A detailed description of any relevant administrative orders or civil judgements. An owner may provide mitigating information.
  • Optional: A statement of rehabilitation

Have These Documents Ready

The Department of Cannabis Control may request these forms, if needed during application review. Get them ready ahead of time so you aren't in a last minute crunch! The sheets listed in the next section of this article will give you all the information you need to fully fill out these forms.


What Operating Documents You Need

These sheets will help ensure you comply with dispensary application requirements in California. Place each of the following sheets in you cart for purchase, utilize the Primary DIY Guide and each sheet's DIY Guide to integrate the regulations which are listed under each plan type below.  

The regulation sections listed below each sheet below can be found here in the Department of Cannabis Control Medicinal and Adult-Use Commercial Cannabis Regulations California Code of Regulations Title 4 ; Division 19. Department of Cannabis Control


Inventory Management Plan

Use the following sections of the regulation along with the Primary DIY Guide and this sheet's specific DIY Guide to customize your Dispensary Inventory Management Plan sheet.

  • §15000.(t)  Definitions (definition of "Designated Responsible Party")
  • §15000.(nn)  Definitions (definition of "Lot or batch number")
  • §15000.(iii)  Definitions (definition of "Quarantine")
  • §15000.(sss)  Definitions (definition of "Track and Trace System")
  • §15000.7. Storage of Inventory.
  • §15411. (b)(9) - Requirements for Providing Free Cannabis Goods to Medicinal Consumers.
  • §15418.(e) - Cannabis Goods Carried During Delivery.
  • §15418.(h)(1) - Cannabis Goods Carried During Delivery.
  • §15047.1. Definitions
  • §15047.2. General Requirements.
  • §15048. Training and Credentialing.
  • §15048.1. Responsibilities of the Designated Account Manager.
  • §15048.2. General Tag Requirements.
  • §15048.3. Ordering Tags.
  • §15049. Track and Trace Reporting.
  • §15050. Loss of Access.
  • §15051. Track and Trace System Reconciliation.
  • §15052. Returns.
  • §15052.1. Acceptance or Rejection of Shipments.
  • §15307.1. Quality-Assurance Review for Labeling Cannabinoids and Terpenoids.
  • §15406. Cannabis Goods for Sale.
  • §15410. Customer Return of Cannabis Goods.
  • §15411. Requirements for Providing Free Cannabis Goods to Medicinal Consumers.
  • §15413. Cannabis Goods Packaging and Exit Packaging.


Inventory Manager Job Description

Use the following sections of the regulation along with the Primary DIY Guide and this sheet's specific DIY Guide to customize your Inventory Agent/Manager Job Description sheet

  • §15048. Training and Credentialing.
  • §15048.1. Responsibilities of the Designated Account Manager.


Verifying and Testing Plan

Use the following sections of the regulation along with the Primary DIY Guide and this sheet's specific DIY Guide to customize your Dispensary Verifying and Testing Plan sheet

  • §15000.(k)  Definitions (definition of "Cannabis Product Quality")
  • §15000.(nn)  Definitions (definition of "Lot or batch number")
  • §15000.(iii)  Definitions (definition of "Quarantine")
  • §15406. Cannabis Goods for Sale.


Security Plan

Use the following sections of the regulation along with the Primary DIY Guide and this sheet's specific DIY Guide to customize your Dispensary Security Plan sheet

  • §15000.(ll)  Definitions (definition of "limited-access area")
  • §15000.(ccc)  Definitions (definition of "Premises")
  • §15000.(sss)  Definitions (definition of "Track and Trace System")
  • §15044. Video Surveillance System.
  • §15045. Security Personnel.
  • §15046. Locks.
  • §15047. Alarm System.
  • §15402. Customer Access to the Retail Area.
  • §15405. Cannabis Goods Display.


Security Agent Job Description

Use the following sections of the regulation along with the Primary DIY Guide and this sheet's specific DIY Guide to customize your Dispensary Security Agent job Description sheet

  • §15045. Security Personnel.


Security Agent Onboarding

Use the following sections of the regulation along with the Primary DIY Guide and this sheet's specific DIY Guide to customize your Dispensary Security Agent Onboarding sheet

  • §15045. Security Personnel.


Delivery Plan

Use the following sections of the regulation to customize your Delivery Plan sheet

  • §15402.(d) Customer Access to the Retail Area.
  • §15415. Delivery Employees.
  • §15417. Delivery Vehicle Requirements.
  • §15418. Cannabis Goods Carried During Delivery.
  • §15419. Cannabis Consumption During Delivery.
  • §15420. Delivery Request Receipt.
  • §15427. Retailer Premises-to-Retailer Premises Transfer (if you'll have multiple retail licenses)



Delivery Agent Onboarding

Use the following sections of the regulation along with the Primary DIY Guide and this sheet's specific DIY Guide to customize your Delivery Agent Onboarding sheet

  • §15000.(s)  Definitions (definition of "Delivery Employee")
  • §15415. Delivery Employees.


Recall, Quarantine and Waste Destruction Plan

Use the following sections of the regulation along with the Primary DIY Guide and this sheet's specific DIY Guide to customize Recall, Quarantine and Waste Destruction Plan sheet

  • §15000.(k)  Definitions (definition of "Cannabis Product Quality")
  • §15000.(l)  Definitions (definition of "Cannabis Waste")
  • §15000.(iii)  Definitions (definition of "Quarantine")
  • §15000.(sss)  Definitions (definition of "Track and Trace System")


Record Keeping Plan

Use the following sections of the regulation along with the Primary DIY Guide and this sheet's specific DIY Guide to customize Recordkeeping Plan Plan sheet

  • §15402.(e) Customer Access to the Retail Area.
  • §15411.(b)(5) Requirements for Providing Free Cannabis Goods to Medicinal Consumers.
  • §15411.(b)(9) Requirements for Providing Free Cannabis Goods to Medicinal Consumers.
  • §15417.(d) Delivery Vehicle Requirements.
  • §15418. (f) Cannabis Goods Carried During Delivery.
  • §15420.(b) Delivery Request Receipt.
  • §15420.(c) Delivery Request Receipt.


Important Contact Information

There are a few people you'll definitely need to work with to get your license application submitted so you can get your store up and running ASAP.  We've put together a list of some of the most important contacts for you below so you can save time.


Conclusion

We know applying for a dispensary in California's giant cannabis industrycan be confusing and frustrating, so we have made everything easy for you. Our Leafsheets come pre-filled out with all the information you need to get licensed and open on time! They look professional, are downloadable and printable, and come with the DIY Guide that will show you step by step how to set up your own application. Contact us if you have any questions.

About Leafsheets

Leafsheets is a cannabis business support and acceleration platform that is breaking the barriers to entry and success in cannabis business by simplifying cannabis entrepreneurship.  Leafsheets provides vital operating plans, business information, and answers to the most pressing questions --- all of which are usually hard to access and require spending tens of thousands of dollars on consultants.  Not anymore!  Get everything you need to be 10 steps ahead.

Leafsheets is an experienced business advisor and not a legal advisor. For legal advice, consult with a licensed legal practitioner in your state.

Get Started Now

Leafsheets has you covered. Whether you're just getting started on your startup journey, are prepping a business plan for investors, or are up-leveling your operations game - Leafsheets has you covered. Find the operating documents you need to set a solid foundation for your cannabis business success. Start now!

Operation Documents

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