California is considered a cannabis pioneer in the United States, ever since they legalized medical cannabis in 1996. Today, 29 states and Washington DC have legalized cannabis for medical use. Nine states and DC have legalized adult use, aka recreational cannabis. In a couple weeks, California will be joining them. The future is bright: starting in January 2018, retail sales of recreational cannabis will begin. Licensing for recreational and medical cannabis are being combined to help expedite the process. There has never been a better time to start a cannabis delivery service.
Starting a cannabis delivery service in California is almost the same process as opening a cannabis retail store. The difference is that you will contract with cultivators and/or edible/extraction/infused product manufacturers to grow and produce the cannabis products you intend to sell, unless of course you plan to do all of your cultivation yourself.
Legalization in California
California voted to legalize cannabis for medicinal use in 1995, subsequently launching their program. The licensing program was made with the help of the Medical Marijuana Regulation and Safety Act (MCRSA), which details all the rules and regulations for any cannabis related businesses. The same framework is being used to design the recreational program launching January first.
California’s Cannabis Market
The marijuana market in California is booming, as indicated by the money: $845 million is made annually from cannabis. Currently, there are more than 2,800 dispensaries in California. Currentl predictions say that the market will be worth up to $1 billion. The cannabis industry is even expected to be larger than the manufacturing industry by 2020. From this, one can speculate that most new jobs in California will be coming from the cannabis industry.
Any prospective cannabis business owner should be aware of the fact that, although there are certain laws in the state of California, individual cities and counties can make their own rules for what is required. Be sure to you are up to date and in compliance with all local laws. This is important, not just for your business, but for personal reasons. You certainly don’t want to be raided by the DEA.
Starting in January 2018 licensing process will include the following stages:
- Stage 1: Preliminary determination of eligibility
- Stage 2: Initial ranking.
- Stage 3: Second ranking.
- Stage 4: Public Meeting and City Council Final Selection.
During the first stage, the California City Police Department runs a criminal background check. This costs 78 dollars and is paid on site by the applicant. Only six background checks (at the most) will be processed per day.
Location should also be taken into account. First, you should obtain a “Zoning Verification Letter” from your local Public Works department, and submit it to your local city hall’s Planning Division. This costs $250 and should take approximately two weeks in total.
Before the fourth and final stage, a public meeting takes place between applicants and community members. This happens at the California City Council Chambers. Things discussed will include the proposed location, business planning (budgets, proof of capital), safety plans, environmental and community benefits, and standards of employment.
Be sure to have the sufficient financial means to start up a cannabis business in the state of California, as it can be very costly. The costs vary according to how expansive your delivery service is going to be. You can expect the following:
- Stage 1: $3,258.00
- Stage 2: $701.00
- Stage 3: $1,790.00
- Stage 4: $1,937.00
- Total cost: $7,686
How long it takes to get your cannabis business up and running can vary; due to finances, required licenses, suppliers, and employees lined up, etc., it’s not unusual for the process to take more than a year.
What is My Expected Profit?
Cannabis delivery services in California can earn exceed $1 million annually. For example, Harborside Medical dispensary in San Jose, California reportedly does over $20 million in annual sales.
Links to Consulting Companies
The following consulting companies provide a wide range of services – including helping with state licensing requirements and applications to running and stocking your business.
- Canna Advisors
- Quantum 9 Inc.
- Comprehensive Cannabis Consulting
- Green Rush Consulting
- Medicine Man Technologies