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How to Get Your Annual State Cannabis Manufacturing License With Jim Breese CMO of GreenGrowth CPAs
About Us ● 1200+ Prepared Annual Tax Returns for cannabis operators spread across all verticals: - dispensary, distribution, cultivation, manufacturing, delivery and testing ● 350+ Cannabis Business Clients ● 12+ States that our clients are spread across (CA, OR, WA, CO, MI, OH, OK, DC, HI, AZ, FL, MT) ● 12+ Audit-related and valuation projects in 2018 ● Thorough and deep understanding of tax, compliance and assurance related requirements for the cannabis industry The information contained in this webinar presentation is meant for guidance purposes only and not as professional legal or tax advice. Further, it does not give personalized legal, tax, investment, or any business advice in general.
Disclaimer The information contained in this webinar presentation is meant for guidance purposes only and not as professional legal or tax advice. Further, it does not give personalized legal, tax, investment, or any business advice in general.
Agenda Key Definitions ● Types of Manufacturing Licenses ● Identify the governing agencies in the Application Process for Cannabis Manufacturing ● Businesses Licensing Fees ● Outlining the application requirements ● For applicants engaging in manufacturing activities ○ For all applicants ○ Product Standards ● What happens after your state license is issued ● The information contained in this webinar presentation is meant for guidance purposes only and not as professional legal or tax advice. Further, it does not give personalized legal, tax, investment, or any business advice in general.
Cannabis Co-Working Space - Los Angeles Benefits Include: Access to 45,000 sqft Building & Equipment ● Fully Licensed, Vertically Integrated Facility ● ● Turn-Key Cannabis Business Solutions Personal Office Space & Storage ● Professional Financial Services ● The information contained in this webinar presentation is meant for guidance purposes only and not as professional legal or tax advice. Further, it does not give personalized legal, tax, investment, or any business advice in general.
Who is a Cannabis Manufacturer? A manufacturer is anyone who makes or packages a prepared cannabis product Cannabis products: edibles, topicals, tinctures, extracts, vape cartridges, capsules and more. Cannabis manufacturers can also package flower and roll and package pre-rolls on their licensed premises. The information contained in this webinar presentation is meant for guidance purposes only and not as professional legal or tax advice. Further, it does not give personalized legal, tax, investment, or any business advice in general.
Key Definitions EXTRACTION is the process of separating cannabinoids from cannabis plant material using chemical solvents or mechanical methods INFUSION is the act of creating a cannabis product by incorporating either cannabis extracts or plant material into a recipe PACKAGING AND LABELING is the final step in cannabis product creation in which finished cannabis products are placed into a container and marked for retail sale VOLATILE SOLVENT is a solvent that produces a flammable gas or vapor. Examples include butane, hexane and propane NONVOLATILE SOLVENT is any other type of solvent used during the extraction process.Examples: carbon dioxide, ethanol, water, butter and oil SHARED-USE FACILITY is a manufacturing premises operated by a Type 7, 6 or N licensee in which Type S licensees can conduct manufacturing operations The information contained in this webinar presentation is meant for guidance purposes only and not as professional legal or tax advice. Further, it does not give personalized legal, tax, investment, or any business advice in general.
Types of Cannabis Manufacturers Type 6: For manufacturers using non-volatile solvents, such as carbon dioxide, ethanol, water, butter or oil, or performing extraction using mechanical methods. Can also engage in Type N or P activities. Type 7: For manufacturers using volatile solvents, such as butane, hexane, or propane. Can also engage in Type 6, N or P activities. Type N: For manufacturers performing infusion. Can also engage in Type P activities. Type P: For manufacturers only packaging or labeling cannabis products Type S: For manufacturers operating on a registered shared-use facility The information contained in this webinar presentation is meant for guidance purposes only and not as professional legal or tax advice. Further, it does not give personalized legal, tax, investment, or any business advice in general.
Shared-Use Facilities A shared-use facility is a manufacturing premises in which businesses take turns utilizing the space and equipment. Primary Licensee is the owner or operator of the shared-use facility Cannabis manufacturers that work within the shared-use facility are Type S Licensees Type S licensees may conduct the following cannabis manufacturing activities: Infusions ● Packaging and labeling ● Extractions with butter or food grade-oils ● The information contained in this webinar presentation is meant for guidance purposes only and not as professional legal or tax advice. Further, it does not give personalized legal, tax, investment, or any business advice in general.
Licensing Agency: Who is in Charge? Three (3) CA government agencies: ● California Department of Food and Agriculture (CDFA): CalCannabis ○ California Department of Public Health (CDPH): Manufactured Cannabis Safety Branch ○ Bureau of Cannabis Control (BCC) ○ Make sure you have be granted local approval before applying for a state license ● The information contained in this webinar presentation is meant for guidance purposes only and not as professional legal or tax advice. Further, it does not give personalized legal, tax, investment, or any business advice in general.
Licensing Fees Application fee is $1,000 for all manufacturing types except Type S, which requires a fee of $500 Tier Type: Gross Revenue ($) Fee per License ➔ Tier I: Up to $100,000 $2,000 ➔ Tier II: More than $100,000 and less or equal to $500,000 $7,500 ➔ Tier III: More than $500,000 and less or equal to $1.5 million $15,000 ➔ Tier IV: More than $1.5 million and less or equal to $3 million $25,000 ➔ Tier V: More than $3 million and less or equal to $5 million $35,000 ➔ TIer VI: More than $5 million and less or equal to $10 million $50,000 ➔ Tier VII: More than $10 million $75,000 All application and licensing fees are nonrefundable! The information contained in this webinar presentation is meant for guidance purposes only and not as professional legal or tax advice. Further, it does not give personalized legal, tax, investment, or any business advice in general.
CDPH’s General Requirements The online Manufacturing Cannabis Licensing System (MCLS) and other resources can be found at on the CDPH website. ● Medicinal (M), Adult Use (A) or both ● Closed-Loop System Certificate (if applicable) Owner(s) Information Labor Peace Agreement ● ● Property Owner’s Statement Financial Information Form ● ● ● Premises Diagram ● Surety Bond ● Local Authorization (optional) ● Live Scans Business Formation Documents Operating Procedures ● ● Limited Waiver of Sovereign Immunity* Transportation ● ○ ● California Environmental Quality Act (CEQA) ○ Inventory Compliance ○ Quality Control Seller’s Permit Security ● ○ Waste Management ○ *This only applies if the applicant is a federally recognized tribe or other sovereign entity The information contained in this webinar presentation is meant for guidance purposes only and not as professional legal or tax advice. Further, it does not give personalized legal, tax, investment, or any business advice in general.
Local Authorization As with all state licensing, it is important to ensure that your business has secured local approval before attempting to attain a state license. You can submit local authorization to CDPH to ease the state licensing process The information contained in this webinar presentation is meant for guidance purposes only and not as professional legal or tax advice. Further, it does not give personalized legal, tax, investment, or any business advice in general.
Closed-Loop System Certificate This is for extractions using CO2, volatile solvents, chlorofluorocarbon, hydrocarbon, or other fluorinated gas that are processed in a closed-loop system during the extraction process. It applies to both volatile and nonvolatile solvents. Certification by a California-licensed engineer is required for each extraction system, and must be completed following a review of the equipment installed on the premises. The certificate should include: The serial number of the extraction unit ● Confirmation that the unit was commercially manufactured, safe for use with the intended solvent, and ● built to codes of recognized and generally accepted good engineering practices The signature and stamp of the engineer ● Documentation showing the extraction system has been approved for use by the local jurisdiction’s fire department. Approval from the fire department is also required for licensees conducting ethanol extraction. The information contained in this webinar presentation is meant for guidance purposes only and not as professional legal or tax advice. Further, it does not give personalized legal, tax, investment, or any business advice in general.
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