Licenses for Cannabis Businesses & Legal Requirements
To operate legally, cannabis businesses will need to get and maintain licenses from state and potentially local agencies. Even a business that does not have a physical location may need a license. A state or local agency may tightly limit the number of cannabis licenses that it issues, although some agencies set generous limits or hold open application periods. To be eligible for a license, a business owner probably will need to meet a residency requirement. They may need to establish that they do not have certain convictions on their record, such as felony drug crimes or violent offenses.
State and Local Rules May Conflict
Even if your state allows you to operate a cannabis business, you may not be able to operate it in your city of choice. Some cities in states such as California may prohibit commercial cannabis activities through their authority to regulate local businesses.
Getting and keeping a cannabis license involves complying with certain rules imposed by the licensing agency, which may be specific to the type of business. If you are cultivating cannabis, you may need to prepare a detailed site plan and demonstrate proven horticultural expertise, among other things. A retail cannabis business may face restrictions on the quantity of cannabis sold to each customer, price restrictions, and security requirements for its facilities and products. If you plan to make edible cannabis products, you may need to build a commercial kitchen to cook them. Some licensing agencies require these businesses to produce the cannabis ingredients in their edible products on site.
Licensing Requirements for Employees of Cannabis Businesses
In addition to business owners, employees in the cannabis industry may need to obtain certain licenses and comply with regulations at state and local levels. For example, an employee of a cannabis business may need to get a registered agent card. A state may issue this card after a background check, which will reveal information such as the criminal record of an applicant. Similar to business owners, employees in the cannabis industry often must not have criminal records involving drug offenses or violent crimes.
Some states may not require every employee to get a special license, while other states may require different licenses for different types of employees. One of the latter states is Colorado, which provides two licenses for employees of cannabis businesses. These licenses fall within the MED Occupational License category. An employee will need one of these licenses to work for a licensed medical or retail marijuana business in Colorado, or to work for a vendor that provides services to these businesses. The type of license that each employee must obtain will depend on whether they are a key employee or a support employee. An employee is considered a key employee if they make decisions that directly affect the operations of the business, while an employee is considered a support employee if they do not make these decisions.
Keep Up With the Rules
The cannabis industry is relatively new, and the state and local rules that govern it continue to evolve. In addition to renewing their licenses as needed, businesses and employees will need to stay current with shifts in regulations so that they can take any steps required to keep their operations legal.