Most Important Things to Know When Starting a Cannabis Business in California

 
 

The first thing people always ask me is, “What do I do first?” And the answer is you need to find a local location at the local government level that is allowed for your business type. You may have a great idea for a dispensary or a grow, but if your city of Encinitas, or any other city in California, doesn’t allow it at the local level, it’s a dead-on-arrival idea.

So, California has dual licensing, which means you need both approval from the local level and the state government to operate, and so always the first question is, is the local location where you want to do this, is what you want to do legal at that location? For example, delivery is allowed at the state level, but if individual cities say you cannot deliver from outside of the city into the city, then even if you’re legal in San Francisco, you may not be able to deliver into a different city outside of San Francisco, and those are the kind of considerations that you want to think about when locating your business, because if you pick the wrong place and you’re out on an island all by yourself, you may not be able to do much business.

The same thing on cultivation. A lot of people say you should go out to the High Desert, out in Eastern California, and do all your growing in these obscure, remote towns, but if there’s no testing lab near you in that remote town, you may spend a lot of extra money transporting your product a significant distance.

So, those are the kind of issues that McAllister Garfield helps clients understand, and helps them think through so that they can make smart business decisions. You know, there are other simple things like the definition of premise under California law. You’re only allowed to have one license per premise. Now, this is largely going to be a function of local law and how they define premise, but the state government needs to see some kind of local definition or local separation of premises. If you want to have 100,000 square foot warehouse stacked with 10 licenses to grow cannabis, now you better make sure you work with the local government to say that each of those licenses is in a separate premise. And those are the kind of details that McAllister Garfield digs down on and helps entrepreneurs structure their plans to make sure they can be successful.

If you don’t have regulatory compliance lawyers, like the ones at our firm, who also understand business transactions, and real estate law, and leases, and all the other important things you’re going to need, then you’re going to jeopardize your investment. You’re going to be less likely to be successful. So again, California creates a huge opportunity, but it also has a lot of risks, and you need a great team around you, and we encourage you to contact the lawyers at McAllister Garfield. With lawyers in San Diego, Los Angeles, and San Francisco, we cover the entire state, and we’re here to help and help you build your business and be successful.