In 1996, California became the first state to allow for medical marijuana use. State voters approved Proposition 215, the law that made it legal for doctors to recommend cannabis to patients.

In 2015 Gov. Jerry Brown signed three bills that toughened regulations for medical cannabis businesses and sought standards for documentation and testing. The bills are known as the Medical Marijuana Regulation and Safety Act, or MMRSA for short. Collectively, the legislation also paved the way for medical cannabis businesses to turn a profit. The legislation is impacting marijuana business models in other ways. The laws have eliminated the idea of home-based dispensaries.

California pioneered the modern cannabis policy reform movement in 1996 when voters passed Proposition 215, the
Compassionate Care Act. Though voters failed to approve adult use in 2010, they voted overwhelmingly in 2016 to make adult use legal in a state that represents the world’s sixth-largest economy. The vote means that cannabis will become legal for use from December 15, and cannabis shops can open in 2018.

The Act requires licenses for the cultivation, manufacture, distribution, transportation, laboratory testing, and sale of medical cannabis. The Department of Food and Agriculture is responsible for issuing cultivation licenses; the Department of Public Health is responsible for issuing manufacturing licenses; and the Bureau of Medical Cannabis Regulation within the Department of Consumer Affairs is responsible for issuing distribution, transportation, laboratory testing, and dispensary (sale) licenses.

San Francisco County has the highest number of registered patients at 17812, roughly 30% of the state’s total. Marin County is the next highest, at 4841 patients, followed by Alameda (3918), Riverside (3775) and Los Angeles (3609).

Cannabis Sales (million $)

  • 2016
  • 2020

 California’s cannabis industry reported $2,692 million in retail sales via nearly 2,800 dispensaries in 2016, that is 10% more than all other MMJ states combined as of 2016 according to Arcview Market Research. Over the next five years they project the total California market to grow at a compounded annual rate of 18.5% to $5.6 billion by 2020.

California’s Medical Marijuana Regulation and Safety Act MMRSA introduced a new regime whereby collectives “may operate for profit, not for profit, or any combination thereof”.

The Act requires licenses for the cultivation, manufacture, distribution, transportation, laboratory testing, and sale of medical cannabis. The Department of Food and Agriculture is responsible for issuing cultivation licenses; the Department of Public Health is responsible for issuing manufacturing licenses; and the Bureau of Medical Cannabis Regulation within the Department of Consumer Affairs is responsible for issuing distribution, transportation, laboratory testing, and dispensary (sale) licenses.

Update.

Three of the California agencies implementing the Medical Cannabis Regulation and Safety Act (“MCRSA”) released their initial draft rules on April 28, 2017. These long-awaited rules make up the bulk of the regulatory standards for: transportation, distribution, and retailers (as developed by the Bureau of Medical Cannabis Regulation/Bureau of Marijuana Control); cultivation (as developed by the Department of Food and Agriculture through its CalCannabis Cultivation Licensing arm); and manufacturing (as developed by the Department of Public Health through its Office of Manufactured Cannabis Safety).


MMRSA emphasizes the need for medical cannabis business entities to operate in absolute compliance with all local jurisdiction laws, regulations and standards:

“If your business is “in compliance with local zoning ordinances and other state and local requirements on or before January 1, 2018,” it may continue to operate until licenses are established.”

Cannabusinessplans will lay the groundwork for your business plan. This crucial document explains your vision and your niche, and establishes consistent values and language that shapes your enterprise. It also prepares you to seek investment.

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