More and more states have already passed its respective legislation to formally legalize the use of marijuana for therapeutic and healing purposes, while several of the states have also legalized its recreational use. Because of this, a lot of people are asking how to get a marijuana growing license since it is more convenient growing your plants than to purchase it that surely costs a lot of money.
Well, there are different ways to get a marijuana growing license, and that depends on what state you are currently located and what state laws are implemented. State laws always determine how to grow or retail marijuana and should be covered in particular conditions they may grow the plants so.
On the contrary, cultivating and selling of marijuana is still considered as a federal crime, regardless of the efforts that are made in complying with the local laws imposed in the state that will not exempt you from prosecution from federal law.
How to Get a Marijuana Growing License Without Getting Yourself Into Trouble
For those who are looking to start their own cannabis business, to avoid getting arrested and get in trouble, they should strictly follow the laws imposed in the state and the area.
There are different types of licenses issued for people planning to establish their cannabis business license, and this also depends on the base of operations of the business and the type of business that is being planned.
For example, a grower wants to cultivate and sell his or her cannabis to various dispensaries and retail companies. This may require a different requirement for the license and the permit compared to someone that operates a cannabis dispensary.
For those planning to own a growing business for cannabis, they have to expect to make a summarization that is done in an executive-level along with their business plan, their own marketing plan, their business model structure, a real estate plan, and their financial plan for their planned cannabis growing company.
A lot of businesses are all subject to varied licensing, registration, and permit requirements, while these are already put in places that include tax, public safety, and other valid reasons the local government can give.
Since this particular industry is heavily regulated and monitored, issuing a license to grow cannabis is very difficult and, most of the time, complicated. Compliance requirements do not only vary depending on what state you are currently based in but also, this can change depending on the business category you are choosing and what city or county you are planning to open up your cannabis growing business.
Meeting all the necessary licenses, permit, and registration are all essential to operate your cannabis growing business legally.
To learn the basic steps to earn your cannabis growing license, keep reading this post.
The Basic Legal Requirements You Need
It is already given that putting up a business needs legal requirements that you have to submit so that you can operate legally. Even though these requirements vary on your nature of business and your base of operations, some requirements are essential requirements that are needed all the time, which is applied the same as putting up a cannabis growing business.
- Business formation- This is to incorporate your business or to form a Limited Liability Company (LLC) with the state and considered important because this will protect your assets from any unforeseen debts as well as liabilities that may arise from your business.
- Tax ID number- This is also a common but very important legal requirement since the federal law requires to know if you have a federal tax identification number. If you have none, you should submit your employer identification number or EIN. This requirement is needed to identify your business and for anything related to taxes.
- General Business License- This license allows you to legally operate in your city or your county and can be renewed every year. This license, however, does not give you the right to start a cannabis business.
- DBA- You should file a Doing Business As (DBA) to allow you to conduct business by using a name that is different compared to the name that is included in your incorporation documents.
- Sales Tax Permit- This is applied if you are planning to put up retailing business aside from growing cannabis. This is for retailers that have digital or physical products or services that are both available online or offline. This permit is needed to collect state as well as local sales taxes.
- Permits- There are different types of permits, depending on the nature of your business. Each permit needs signage, land use, and zoning.
The Business Requirements for Cannabis Growing
Now that you know the basic legal requirements to submit, you should also learn the business license requirements in putting up a cannabis growing business. Still, this varies greatly depending on what state you are located and your business’s base of operations. Some states have more relaxed laws, while some have very restrictive laws that only limit a specific number of licenses issued.
Some states require you to file your organizational paperwork with the State’s secretary office, however, a lot of cases may need you to work with the local agency tasked for licensing.
In the State of Nevada, the Department of Taxation is the one that handles licensing and regulation of marijuana available for retail as well as businesses and medical marijuana.
California, meanwhile, has three agencies tasked for people planning to put up marijuana or cannabis business. There are different local government agencies that handle the licensing of people who want to put up a cannabis business in the state.
Each agency has a varied task to undertake to screen, monitor, and approve licenses for applicants in the state of California. There’s an agency that regulates commercial cannabis licensing for both medical and recreational. This agency is tasked to provide a license to very specific businesses and activities that relate to cannabis.
Also, there’s an agency that is assigned in giving licenses for both medical and recreational cannabis growers. They also monitor the state’s cannabis products’ movement based on the distribution chain through tracking and tracing.
Lastly, an agency that regulates businesses that manufacture different cannabis products. They are the ones that monitor the edibles and oils that are manufactured for both medical and recreational use of marijuana.
How to Differentiate Licensing on the Category of Business?
Your cannabis business will be regulated based on various factors. One of them is the category under business regardless if you are growing, selling, and even investing. Here is an overview to explain each of the categories of how licenses differ from each other.
- Growing- this is usually regulated heavily. Operating a business like this needs significant investment and a solid site plan review, and the people running it should have good knowledge about horticulture.
- Selling- some states need you to provide adequate building as well as product security in place. They can also limit the number of products that you can sell to a person and can implement pricing restrictions as well.
- Investing- Those who are planning to invest in cannabis growing or other forms of business, they need to follow the specific provisions both regulatory and statutory.
How to Get a License for Your Employees?
Your employees also need to have their licenses or working permits. Some states need an employee to be licensed to work for marijuana business, and to add more, they need to meet the state standard requirements that concern employees regardless of the type of business.
In Nevada, it requires all volunteers and employees of a cannabis business to obtain their registered agent card. They are required to undergo a background check that is done and approved by the state. In Colorado, two types of licenses are given by the MED occupational license. This allows the holders to work for businesses that specialize in medical marijuana, but they need to be licensed by MED first.
In a marijuana or cannabis growing business, the state identifies two types of employees, the key employee, and the support employee. The key employee is needed to operate and manage the decisions that impact the business directly, while support employee is the one that works without the involvement of creating operational decisions.
Why is it Important to Know the Local Regulations?
Paying close attention to the different local regulations to prevent encountering roadblocks that may hinder your cannabis growing business’s pursuit of obtaining a license to operate.
Each state has various local regulations that give local jurisdictions in controlling the activities that are legal or permitted within their jurisdiction. While there are cities that need a local license approval while there are cities that completely prohibit all of your business activities.
It is important to know all of the local regulations, especially in your base of operations, since not all states and cities in the U.S legalize cannabis fully.
How to get a marijuana growing license is a painstaking task you have to undertake because of the regulations imposed by the government. Before you even venture to this kind of business, make sure you have planned it very well, prepared for it, learned everything about it, and follow all the legal requirements that are needed.