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How to Get Your Annual State Cannabis Retail License With Jim Breese Chief Marketing Officer at GreenGrowth CPAs
About Us ● 1,200+ Prepared Annual Tax Returns for cannabis operators spread across all verticals - dispensary, distribution, cultivation, manufacturing, delivery and testing ● 350+ Cannabis Business Clients ● 11+ States that our clients are spread across (CA, OR, WA, CO, MI, OH, OK, DC, HI, AZ, FL) ● 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 Differences between STOREFRONT and NON-STOREFRONT Retail licenses ● Identify the governing agencies in the Application Process for Cannabis Retail ● Businesses Breakdown of the fee schedule based on size of business ● Outlining the application requirements ● ○ For applicants engaging in retail activities For all applicants ○ 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.
Storefront vs Non-Storefront Retailers STOREFRONT RETAILER (Type 10): Sells cannabis goods to customers at its premises or by delivery ● Must have a licensed physical location (premises) ● NON-STOREFRONT RETAILER (Type 9): Sells cannabis goods to customers exclusively through delivery ● Must also have a licensed premises (for storage) ● Premises of a non-storefront retailer shall not be open to the public. ● 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.
Where to Start: Work with the BCC Three government agencies in the State of California that enforce all regulations ● specifically related to Cannabis Businesses: Bureau of Cannabis Control (BCC) ○ California Department of Food and Agriculture (CDFA): CalCannabis ○ California Department of Public Health (CDPH): Manufactured Cannabis Safety ○ Branch RETAILERS: Any business that plans to conduct cannabis retail must submit all ● documents to the Bureau of Cannabis Control (BCC) Get 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 Depends on the scale of your operation. BCC’s fee guide: Gross Revenue ($) Fee per License ➔ Less than or equal to $500,000 : $2,500 ➔ More than $500,000 and less or equal to $750,000 $5,500 ➔ More than $750,000 and less or equal to $1.0 million $7,500 ➔ More than $1.0 million and less or equal to $1.5 million $11,000 ➔ More than $1.5 million and less or equal to $2.0 million $14,500 ➔ More than $2.0 million and less or equal to $3.0 million $22,500 ➔ More than $3.0 million and less or equal to $4.0 million $30,500 ➔ More than $4.0 million and less or equal to $5.0 million $38,500 ➔ More than $5.0 million and less or equal to $6.0 million $46,500 ➔ More than $6.0 million and less or equal to $7.5 million $57,000 ➔ More than $7.5 million $96,000 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.
Requirements for Retailers Below guidelines are based on regulations published by the Bureau of Cannabis Control (BCC): Hours of operation ● 6:00am to 10:00pm (PST) ○ Access to the licensed premises - STOREFRONT ONLY ● Must be 21+ years of age or 18+ years of age with medical recommendation ○ Age verification prior to entry ○ Limited access areas are for employees only ○ Cannabis goods for sale ● May only sell cannabis goods/accessories and branded merchandise ○ Goods must not be expired ○ Must receive all cannabis goods from a licensed distributor ○ 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.
Requirements for Retailers (cont.) Customer returns ● May be accepted by retailer ○ Returned goods must be destroyed or, if defective, returned to distributor ○ Cannabis goods packaging, labeling, and exit packaging ● Opaque, resealable, tamper-evident and child resistant ○ Does not apply to immature plants being sold ○ Shipments and records ● Only receive shipments between 6:00am to 10:00pm (PST) ○ Must maintain inventory records, financial records, personnel records, training ○ records, contracts, permits, security records, sales records, etc. Retailer to retailer transfer of goods ● Same license holder for both locations ○ Hire licensed distributor to transport ○ 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.
Delivery Procedures Age Verification ● Delivery employees must verify the age by inspecting a valid form of identification of all ○ delivery customers, in person, before they complete delivery of the cannabis goods. Only deliver to a physical address, but not sensitive sites (e.g. schools, day care, etc.) ● Delivery driver documents ● Copy of the retailer’s license ○ Government-issued ID ○ ID badge provided by the licensed retailer ○ Prepared request receipts for delivery ○ Delivery employees should keep record of inventory ledger, request receipts and log of stops ● $5,000 maximum value of cannabis goods carried at any time ● Delivery vehicle must be an enclosed motor vehicle equipped with a GPS device and secure ● storage for cannabis goods. Vehicle is not required to be owned by the retail licensee ○ 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.
BCC Requirements for All Annual Licenses In the following slides, we outline the general requirements for all cannabis business license applicants in California. Use the online portal and other resources found at bcc.ca.gov to fill out an application. Owner(s) Information Financial Information Form ● ● Evidence of Legal Right to Occupy Surety Bond ● ● Premises Diagram Compliance with the Compassionate Use Act ● ● Business Formation Documents Live Scans ● ● Limited Waiver of Sovereign Immunity* Operating Procedures ● ● California Environmental Quality Act (CEQA) Transportation ● ○ Compliance Inventory ○ Seller’s Permit Quality Control ● ○ Labor Peace Agreement Security ● ○ *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.
Owner Submittal Owners can be defined as individuals, business entities, or other groups with an aggregate ownership interest of 20% or more in the business applying for a license. An owner could also be the chief executive officer (CEO) or member of the board of a non-profit, or an individual who will participate in the direction, control, or management of the business, as outlined in Business and Professions Code, Division 10, Sections 26001al. Percentages of ownership interest, prior convictions, licensing sanctions and financial interests in other cannabis businesses must also be disclosed 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.
Legal Right to Occupy Leasing Vs. Owning Leasing the property, the Landlord will have to provide documentation ● If the applicant is the landowner, then the Applicant will have to provide ● a title or deed of the property, demonstrating the applicants ownership. 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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