On the first of January 2018 the doors to many a new type of business will swing open for the first time. Much of that new trade, at least in the state of California will be cannabis trade for a recreational use market. This newly-legal market will make the most of the road that has been paved by Proposition 64, California’s new drive to allow its cannabis culture to flourish.
While there are a lot of people out there counting the days till Christmas, there will be thousands of applicants who are counting down to another date altogether; January 1st. This is when any licence that will be issued for a legal cannabis enterprise will take effect. The temporary licence for the operation of a cannabis microbusiness is already being applied for state-wide. There is still a long road ahead for this budding business type though and there are still rules to abide by and steps that should be taken.
Rules and regulations.
California will in some ways follow the likes of Amsterdam in the way it allows its cannabis businesses to operate. They will see strict regulations on how and by whom these places are run and attended.
– Cannot sell to persons less than 21 years of age / without ID.
– Cannot sell or allow the consumption of alcohol or tobacco products on the premises.
– Must have the correct licence for their business.
There are many more rules that they must abide by including any and all existing regulations that apply to a business of any type within the state. These rules come with heavy prison sentences if they are found to have been broken.
Steps and procedures.
Once you have decided that you would like to go into the cannabis business there are also some steps that the Secretary of State would like a business owner to take on their way to doing so.
Who are you?
Naming a business is the first logical step that they would like you to follow. Your business name tells your customers and competition exactly who you are and what you are offering. When deciding what to call your business you will also need to choose an entity type. This is where you select whether it is owned by one person or a group of people etc.
Now that you have chosen a name for your cannabis business, you will need to have your business correctly registered in order to be licenced. The only types of cannabis company that can skip this step are individual proprietors or general partnerships. The Secretary of State demands that all other business types must pay a fee of up to $150 and provide additional information.
If your cannabis business does not have permission from the local government to operate then they will not be granted a licence by the state. You will need to show proof of this local permission as part of your application.
Taxes and Fees.
In order to operate any type of cannabis business in California you will need to obtain cannabis tax permits alongside a sellers permit. You can apply for these at the California Department of Tax and Fee Administration.
The State Licence.
This here is the new licence that was brought into creation by Proposition 64. The state will issue you with a licence that makes it legal as of January 1st to distribute cannabis to your customers legally. Any type of cannabis business is now able to apply for this state licence. However there are different allocated places where these applications will need to be made.
– Cannabis retailers, distributors and microbusinesses – Department of Consumer Affair’s Bureau of Cannabis Control.
– Cultivators – Department of Food and Agriculture’s CalCannabis division.
– Manufacturers (of concentrates and edibles) – Department of Public Health’s Manufactured Cannabis Safety Branch.
The next steps are similar to those that should be followed by any small business in the state.
A good employer.
You must make sure that you adhere to any and all regulations regarding employer obligations. You will need to keep books and ensure that all your paperwork regarding employees is in place.
Other than that you need to be aware of your obligations regarding any taxes that your business will need to pay. Some examples of these are:
– State Income Tax
– Property Tax
– State Payroll Tax
– Federal Tax
Now you are ready to apply for your licence. Should everything be in order and in place, you will be able to start trading on January 1st as long as you have received your licence.
The world of the small cannabis business just got that little bit bigger.