California Marijuana Dispensary Laws: Medical Retail, Licensing & Regulations

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In the Golden State, Proposition 64 legalized adult use recreational marijuana, opening the doors to retail sales and even home-grown gardens. But where does this leave medical marijuana users and retailers? While medical users enjoy relaxed freedoms compared to recreational consumers, businesses will find that the licensing process isn't terribly different among recreational and medical cannabis, although medical sales come with some extra rules.

At least as of 2019, dispensary laws among recreational and medical sellers are fairly similar, but due to the constant evolution of California's marijuana laws (and an equally evolving federal stance on those laws), it's crucial for cannabis patients to stay up to date.

Medical Marijuana ID Card Program

In 2004, the California Department of Public Health established its Medical Marijuana Identification Card Program. This program allows for patients to receive a Medical Marijuana Identification Card (MMIC) from their local county program office via an in-person application (before legalization of recreational cannabis, attending physicians or evaluation centers could issue the MMIC).

Why have an MMIC? This state-authorized ID card adds the patient to a registry of qualified patients and caregivers. It also validates the cardholder's identity and the right to process, grow, transport and use medical marijuana within California's borders.

Despite the statewide legality of adult-use, recreational marijuana, having an MMIC still provides some advantages for patients. Those with a valid MMIC do not have to pay the sales or use tax when purchasing medical cannabis, medical cannabis concentrate, edible medical cannabis products or topical cannabis at retail locations. It also affords relaxed rights for growing marijuana and allows some minors access to medical cannabis as patients or caregivers – unlike recreational marijuana, which is limited to those aged 21 and over.

Licensing for Medical Marijuana Retailers

Any retailer that intends to sell legal cannabis or cannabis products must apply for an annual license to sell those products, whether the use is recreational or medical.

In the Golden State, sales licenses for marijuana products come in two types: the A-license and the M-license. While the A-license, or Adult Use License, allows the sale of recreational cannabis products to those over age 21, retailers of medical marijuana products will of course need an M-license. The Medical Marijuana License covers the sale of medical marijuana products to customers who present a valid MMIC.

Each of the retailer's currently operational locations must have a valid license, with only one licensee per premise. However, a single licensee can hold both an A-license and an M-license for the same commercial activity, such as retail sale, on the same premises (as many retailers sell both recreational and medical cannabis).

Read More: California Marijuana Dispensary Laws: Retail & Licensing

Licenses Vary by Type of Business

Licenses also vary by type of business. California offers Type 10 retailer licenses for those who sell or deliver cannabis goods to customers, Type 9 non-storefront retailer licenses for those who sell or deliver cannabis from a location not open to the public and Type 12 microbusiness licenses for size-limited cultivators, manufacturers, distributors and retailers.

Getting a Medical Retail License

Medical retail licensing begins with a trip to the California Bureau of Cannabis Control's website. Here, registered users can log in and use an online application form. The online application process breaks down like this:

  • Choose the type of business (retailer or microbusiness).
  • Choose the type of license – in this case, that's an M-license.
  • Enter business and owner contact and location information for all owners and premises.
  • Enter a valid federal Employer Identification Number.
  • Fill in the required information about company size (number of employees, etc.)
  • Upload digital copies of items such as: business formation documents; evidence of legal right to occupy the business premises; financial history; labor peace agreement; premises diagram; proof of surety bond; information on inventory, quality control, security and transportation procedures.
  • Sign the application electronically.

Once the application is signed and reviewed, the Bureau of Cannabis Control (BCC) emails the applicant, guiding them through the next step – the owner submittal form. For this step, each owner will need to provide a government-issued ID and live-scan fingerprint from the state's Department of Justice. Upon receipt of these items and the required fees, the BCC will approve and issue the license.

Medical marijuana dispensaries that were operating in compliance with California's Compassionate Use Act of 1996 before the first of September, 2016, are eligible to receive priority licensing for their medical retail license.

Retail Medical Marijuana Regulations: Location

Of course, even officially licensed medical marijuana retailers are subject to a whole litany of regulations created by agencies such as the Bureau of Cannabis Control, California Department of Food and Agriculture and the California Department of Public Health.

Whether a retailer sells medical or recreational cannabis (or both), the premises must feature limited-access areas where only authorized individuals – such as contractors, vendors and business representatives – are allowed. The business must also maintain an active list of these authorized individuals with the BCC.

At all times, at least one dispensary employee must be present on the location's sales floor when customers are in the store. All dispensaries are limited to sales hours and deliveries between the hours of 6 a.m. and 10 p.m. and must secure the storefront with commercial-grade locks and alarm systems during non-operational hours.

Retail Medical Marijuana Regulations: Customers

Regardless of the type of marijuana retailer, customers may enter the sales floor only by presenting a valid ID proving them to be 21 years of age or older. However, customers aged 18 to 21 may enter with a state-issued ID and doctor's recommendation (i.e., an MMIC). A California driver's license, military ID or passport fit the bill for ID.

Medical customers are limited to 8 ounces of marijuana purchases per day, although a valid physician's recommendation may alter that limit.

Retail Medical Marijuana Regulations: Inventory

Every licensed cannabis retailer in California must use Metrc (Marijuana Enforcement Tracking Reporting Compliance), a track-and-trace reporting system that helps state governments monitor cannabis activity. For retailers, Metrc is usually incorporated into the point-of-sale (POS) software system.

These POS systems also help retailers comply with records-of-sales laws, which require detailed information on every purchase, including the name and employee ID of the employee who made the transaction, the time and date, the quantity of product, the specific items purchased, taxes paid and the customer's name.

Retail Medical Marijuana Regulations: Products

All cannabis goods sold at retailers in California must come from a licensed distributor and must comply with the Business and Professions Code.

No medical or recreational marijuana products may be visible from outside the retail location. Likewise, all cannabis products that have been removed from their packaging and placed in display containers can be accessible only with the assistance of employees. Once removed from its packaging, display cannabis cannot be consumed or sold – by state law, it must be destroyed after removed from display.

Retailers may accept returns from customers, but may not resell those returns. While recreational marijuana may not be given to customers for free, retailers with an M-license can distribute free lab-tested cannabis to patients with a valid ID and doctor's rec. This free marijuana must be entered in the track-and-trace system and place in opaque packaging.

Live Plants for Medical Patients

Cannabis retailers may sell non-flowering live plants and cannabis clones if those plants were acquired from a nursery with a Type-4 license. Every plant or seed requires a tag that states: "This product has not been tested pursuant to Medicinal and Adult-Use Cannabis Regulation and Safety Act.” It's illegal for retailers to use pesticides on plants before selling them to customers.

Of course, licensed medical patients are limited only by the amount of marijuana recommended by their doctor rather than the six-plants-per-parcel rule imposed on recreational users.

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About the Author

As a freelance writer and small business owner with a decade of experience, Dan has contributed legal- and finance-oriented content to diverse sources including Chron, Fortune, Zacks.com, Motley Fool and MSN Money, among others.