The Different Kinds of Cannabis Business Licenses in California

Published: Nov 15, 2022
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The largest market for recreational-use cannabis use in the country, California first passed legislation for adult use in in November 2016, with the first recreational sales taking place in January 2018. Since then, the state has collected nearly $4 billion in tax revenue from its sales and has issued more than 12,000 commercial licenses to cannabis businesses.

Overseeing California's cannabis industry, The Department of Cannabis Control (“DCC”) works alongside the state’s Cannabis Advisory Committee to create regulations, protect public health and safety, as well as review and issue businesses licenses for everything from growth to retail sales.

There are currently six different core license types for businesses that handle consumer adult-use cannabis in California. Within each different category, there are different types of licenses with specific requirements and use cases. Full information on individual license requirements and fees can be found on the DCC’s License Application Checklist

California Cannabis Business License Types

License Type	Authorized Activity
Cultivation	Cannabis cultivators are authorized to grow all plants that are harvested, sold as flowers, and made into consumer, adult-use products. The type of cultivation license(s) a business will need will vary based on the following factors: The size of the canopy What kind of lighting is used If the cultivator is growing seedlings and immature plants only for use by other businesses or sale to consumers If you the cultivator is growing, drying, curing and trimming after harvest; packaging cannabis; or making pre-rolls for other licensees
Manufacturing	Manufacturers can extract cannabinoids and terpenes from plants and produce consumer adult-use products from the extract. The types of products defined by the DCC are: Foods and beverages Vape cartridges Lotions and balms Lozenges and sublingual sprays Pills and tablets Dabs, shatter and waxes
Distribution	Licensed distributors are authorized to transport goods that either they or another business have previously cultivated or manufactured. The cost and type of distribution license is contingent on whether the licensee is: Transporting cannabis goods to retail Storing cannabis goods Transporting for other businesses
Testing	Laboratories require a testing license in order to ensure sure cannabis goods are safe for consumption, up to the standards set by the state. Testing labs test cannabis goods to in the efforts to keep them: Free of contaminants Labeled with accurate amounts of cannabinoids and terpenes
Retail	Cannabis retailers sell cannabis goods through storefront shops (dispensaries) or delivery. There are different types of licenses for whether the stores engage with customers in person. Authorized retailers can legally sell the following products, pending them passing testing and quality assurance review: Packaged flower Pre-rolls Topicals Edibles Pipes Rolling papers Vape cartridge batteries Branded merchandise for a licensed business
Events	To host cannabis-related events, businesses need both an event organizer licenses, as well as a temporary cannabis event license (issued at least 60 days before the start date). Having an event license does not permit the following activities: Cultivating cannabis Distributing cannabis or cannabis products Manufacturing cannabis products Selling cannabis goods