Sacramento Cannabis Lawyer
Assisting with business operating permits, conditional use permits, provisional licensing, annual licensing and all other cannabis licensing applications.
Outside compliance regulation officer assisting cannabis businesses navigate the ever changing legal landscape.
Pursuing and defending litigation on behalf of cannabis investors and business operators.
The Bureau of Cannabis Control is responsible for regulating commercial cannabis licenses for retailers, distributors, mircrobusinesses, testing laboratories, and temporary cannabis events.
The CalCannabis Cultivation Licensing, a division of the California Department of Food and Agriculture, manages the track-and-trace system. There are three branches to the CalCannabis Cultivation Licensing: (1) Licensing, (2) Compliance and Enforcement, and (3) Administration.
The California Department of Public Health’s Manufactured Cannabis Safety Branch handles licensing and regulation for commercial cannabis manufacturing. This branch handles cannabis product packaging and labeling.
Building a Successful Cannabis Business
Regardless of industry, there are basics to operating a successful business and the licensing restrictions have opened the door for a large variety of new cannabis businesses. The cannabis industry will include cultivation, processing, manufacturing, distribution, and retail. All of the sub-sectors will have their own complications. In preparation of licensing, businesses should begin drafting business plans and cashflow statements that account for insurance, furniture, construction, payroll, electricity, water, and licensing fees. Our Sacramento cannabis lawyers are experienced in transactional work and have assisted countless business with their daily operations. Please contact our office to schedule a initial consultation and to learn more about our services in the cannabis industry.
State of California Cannabis Licensing
The types of licensing are cultivation, manufacturing, dispensary, testing, distribution, and transporter. Below is a chart for the different types of cannabis licensing.
Cannabis Cultivation Licensing
|Type of License||Type 1||Type 1A||Type 1B||Type 1C||Type 2||Type 2A||Type 2B|
|License Type Name||Specialty Outdoor||Specialty Indoor||Specialty Mixed-Light||Specialty Cottage||Small Outdoor||Small Indoor||Small Mixed-Light|
|Type of Light||Natural||Artificial||Natural and Artificial||Natural and Artificial||Natural||Artificial||Natural and Artificial|
|Growing Area||5,000sqft on one plot, or up to 50 mature plants on separate plots||501sqft to 5,000sqft on one plot||2,501sqft to 5,000sqft on one plot||2,500sqft on one plot, up to 25 mature plants for outdoor, or 500sqft for indoor||5,001 to 10,000sqft on one plot||5,001 to 10,000sqft on one plot||5,001 to 10,000sqft on one plot|
|Limited Number of Licenses to be Issued||No||No||No||No||No||No||Yes|
|Type of License||Type 3||Type 3A||Type 3B||Type 4||Type 5||Type 5A||Type 5B|
|License Type Name||Outdoor||Indoor||Mixed-Light||Nursery||Outdoor||Indoor||Mixed-Light|
|Type of Light||Natural||Artificial||Natural and Artificial||N/A||Natural||Artificial||Natural and Artificial|
|Growing Area||10,001 to 1 acre on one plot||10,001 to 22,000sqft||10,001 to 22,000sqft on one plot||N/A||Greater than one acre on one plot||Greater than 22,000sqft on one plot||Greater than 22,000sqft on one plot|
|Limited Number of Licenses to be Issued||Yes||Yes||Yes||No||No||No||No|
Other Types of Cannabis Licensing
|Type of License||Type 6||Type 7||Type 8||Type 10||Type 11||Type 12|
|License Type Name||Manufacturer 1||Manufacturer 2||Testing Laboratory||Retailer||Distributor||Microbusiness|
Local Cannabis Licensing
Local licensing for cannabis cultivation or marijuana dispensaries varies county-by-county and city-by-city. The local governments have the power to permit or ban cannabis and to crease the licensing framework. The local governments are still determining licensing for dispensaries, cultivation, manufacturing, lab testing, delivery, transportation, and distribution. Several local governments have banned commercial activities, including cultivation and dispensaries. The City of Sacramento is one of the few local governments that has decided to embrace commercial marijuana. The City of Sacramento is currently accepting conditional use permits and business permits for cultivation, manufacturing, testing laboratories, delivery-only, and distribution.
There are cities that have banned commercial marijuana, some cities have a moratorium, and other cities are beginning to accept new applications. With all commercial cannabis, licensing is a case-by-case situation and depends on the city or county. Please schedule a consultation to learn more about the particular cities and counties permitting marijuana dispensaries and cannabis cultivation. There is a $100 fee for consultations relating to the cannabis industry.
Frequently Asked Questions
What is the Cost to Start Commercial Cannabis Cultivation in Sacramento?
Cost to Start Cannabis Cultivation in Sacramento
Cultivation is the new gold rush and there are hundreds of individuals trying to jump on board. In Sacramento, there have been 100s of applications to obtain permits for commercial cannabis cultivation. Sacramento requires both a conditional use permit and a business operating permit. The cost will vary on the grow location and the size of the site. Here is a hypothetical cost to start a small 5,000 square feet cannabis cultivation business in Sacramento.
Conditional Use Permit in Sacramento
The conditional use permit in Sacramento for a cannabis cultivation site less than 10,000 square feet ranges from $16,640.24 to $25,726.28. The application fee depends on the condition of the building: no exterior changes, minor exterior changes, or director level site plan/design review. The application fee will jump dramatically if the cultivation site is within 600 feet of a park. Proximately to a park will require a planning and design commission application and, if there are additional entitlements such as rezoning, the fees will be further increased.
Here is an example fee breakdown for a 5,000 square feet cannabis cultivation conditional use permit that is within 600 feet of a park thereby requiring a planning and design commission application.
|Conditional Use Permit||$19,415.00|
|Site Plan/Design Review||$2,700.00|
|Planning Technology Fee||$1,787.28|
|Public Works Deposit||$1,000.00|
Business Cultivation Operating Permit in Sacramento
In addition to the conditional use permit, Sacramento will also require a business permit. An indoor cannabis cultivation of no more than 5,000 square feet requires a Class A cultivation permit. The initial cost for a Class A permit is $9,700.00.
Other Expenses and Total Estimated Cost to Start a Cannabis Cultivation Business in Sacramento
The conditional use permit requires a licensed architect. These fees will vary depending on the architect and the number of square feet. For a 5,000 square feet cannabis cultivation site, the estimated cost is from $7,500.00 to $15,000.00. In this example with a 5,000 square feet cannabis cultivation conditional use permit that is within 600 feet of a park, the estimated cost for a conditional use permit with an architect and a business permit, is $45,426.28. However, there are potentially other costs that could be incurred depending on the building site condition and other general factors. These estimated fees are related to Sacramento and do not include California State licensing fees, which will become operative in 2018.
How long does it take to obtain a conditional use permit for commercial cannabis in Sacramento?
The City of Sacramento estimates that the process for obtaining a conditional use permit is six (6) months.
How long does it take to obtain a business operating permit for commercial cannabis in Sacramento?
The City of Sacramento estimates that the process for obtaining a business operating permit is six to eight (6-8) weeks.
What is the first step for setting up a commercial cannabis business?
Location. Most cannabis licensing requires the business to have a physical location. The business owner must either (1) purchase a building or (2) lease a space. Purchasing a building will take time to identify the location and close escrow. Leasing a space is challenging. Delivery-only businesses do not need a large space, but landlords are reluctant to bring their property into the cannabis industry for a small lease. There are also lingering concerns that an application could be denied; therefore, the lease should include a contingency for the business owner to exit the lease without penalty. Acquiring the location and getting the landlord to sign off is time-consuming; but, location is the first step and one of the most important steps.
Can I obtain a temporary licensing and conduct commercial cannabis activity?
Business and Professions Code section 26050.1 provides that a temporary license may be issued by the Bureau of Cannabis Control that will allow a business to engage in commercial cannabis activity for a period of 120 days. The temporary license requires compliance with local laws and regulations.
What can I do to prepare for requesting a cannabis license from the State of California?
Businesses interested in applying for a cannabis license should:
- Review the existing regulations to ensure compliance;
- Reviewing local licensing and regulations to ensure compliance;
- Arrange for capital to start the business and pay the licensing fees; and,
- Consider a business structure like limited liability company or corporation.
The State of California will be providing preference to cannabis businesses already legally operating. The immediate goal should be to register and locally license a commercial cannabis business. There are hundreds of applications pending in Sacramento with caps on the number of businesses being consider and, in some cases, implemented. Contact our office to learn more about the opportunities.
Can I start trademarking and branding my cannabis business?
Branding is different from trademarking. Trademarking consists of registering a “mark” with the United States Patent and Trademark Office (USPTO) or the California Secretary of State. The USPTO is a federal entity. Registering the mark with the USPTO provides notice to everyone in the United States that the mark is being used in commerce by a business. After registration, the business will have better protection rights against anyone who infringes on the trademark. The problem is that the USPTO is a federal governmental entity, and marijuana is not federally legal. This means that any trademark for cannabis or marijuana will be rejected. Section 2(a) of the Trademark Act, 15 U.S.C. §1052(a), bars any trademark registration of immoral, deceptive or scandalous matter. Marks that can result in rejection include references to sex, offense to religion, race or to honor, and references to illegality.
Applications for trademarks that are ancillary to cannabis may still be approved. For example, clothing like t-shirts and hats. A trademark referencing marijuana, but its not selling the product, still has an opportunity to pass muster. In conclusion, building a brand around a particular name can be dangerous at this early stage because other businesses could pop up throughout the United States with a similar and potentially confusing brand. There are limited option to protecting a brand name in the cannabis industry.
Registering Cannabis Trademark with the California Secretary of State
The California Secretary of State allows for registration of state trademarks and service marks. The California Secretary of State has been actively marketing that they will register trademarks and service marks in the cannabis industry. The filing fee is $70.00 per mark classification. Unlike the USPTO, the California Secretary of State does not have an online search for active trademarks. Information on registered marks is accessible only upon public request. Therefore, its difficult to determine whether a mark has already been registered with the California Secretary of State because it requires a public records request. General provisions governing trademarks and service marks are found in the Model State Trademark Law, California Business and Professions Code sections 14200 et seq.
In addition to considering trademarking and branding, the Medical Marijuana Regulation and Safety Act does have specific limitations on marketing and labeling. The Act should be carefully reviewed prior to conducting a branding or marketing campaign. Its best practices to start in compliance rather than changing branding strategies after January 1, 2018.