The webinar will be starting soon How to Get Your Annual State - - PowerPoint PPT Presentation

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How to Get Your Annual State Cannabis Retail License

With Jim Breese Chief Marketing Officer at GreenGrowth CPAs

About Us

• 1,200+ Prepared Annual Tax Returns for cannabis operators spread across all verticals
• dispensary, distribution, cultivation, manufacturing, delivery and testing
• 350+ Cannabis Business Clients
• 11+ States that our clients are spread across (CA, OR, WA, CO, MI, OH, OK, DC, HI, AZ, FL)
• 12+ Audit-related and valuation projects in 2018
• Thorough and deep understanding of tax, compliance and assurance related requirements for the cannabis

industry

The information contained in this webinar presentation is meant for guidance purposes only and not as professional legal or tax advice. Further, it does not give personalized legal, tax, investment, or any business advice in general.

Disclaimer

The information contained in this webinar presentation is meant for guidance purposes only and not as professional legal or tax advice. Further, it does not give personalized legal, tax, investment, or any business advice in general.

Agenda

• Differences between STOREFRONT and NON-STOREFRONT Retail licenses
• Identify the governing agencies in the Application Process for Cannabis Retail

Businesses

• Breakdown of the fee schedule based on size of business
• Outlining the application requirements

○ For applicants engaging in retail activities ○ For all applicants

• What happens after your state license is issued

The information contained in this webinar presentation is meant for guidance purposes only and not as professional legal or tax advice. Further, it does not give personalized legal, tax, investment, or any business advice in general.

Storefront vs Non-Storefront Retailers

STOREFRONT RETAILER (Type 10):

• Sells cannabis goods to customers at its premises or by delivery
• Must have a licensed physical location (premises)

NON-STOREFRONT RETAILER (Type 9):

• Sells cannabis goods to customers exclusively through delivery
• Must also have a licensed premises (for storage)
• Premises of a non-storefront retailer shall not be open to the public.

The information contained in this webinar presentation is meant for guidance purposes only and not as professional legal or tax advice. Further, it does not give personalized legal, tax, investment, or any business advice in general.

Where to Start: Work with the BCC

• Three government agencies in the State of California that enforce all regulations

specifically related to Cannabis Businesses: ○ Bureau of Cannabis Control (BCC) ○ California Department of Food and Agriculture (CDFA): CalCannabis ○ California Department of Public Health (CDPH): Manufactured Cannabis Safety Branch

• RETAILERS: Any business that plans to conduct cannabis retail must submit all

documents to the Bureau of Cannabis Control (BCC)

• Get local approval before applying for a state license

The information contained in this webinar presentation is meant for guidance purposes only and not as professional legal or tax advice. Further, it does not give personalized legal, tax, investment, or any business advice in general.

Licensing Fees

Depends on the scale of your operation. BCC’s fee guide: Gross Revenue ($) Fee per License ➔ Less than or equal to $500,000: $2,500 ➔ More than $500,000 and less or equal to $750,000 $5,500 ➔ More than $750,000 and less or equal to $1.0 million $7,500 ➔ More than $1.0 million and less or equal to $1.5 million $11,000 ➔ More than $1.5 million and less or equal to $2.0 million $14,500 ➔ More than $2.0 million and less or equal to $3.0 million $22,500 ➔ More than $3.0 million and less or equal to $4.0 million $30,500 ➔ More than $4.0 million and less or equal to $5.0 million $38,500 ➔ More than $5.0 million and less or equal to $6.0 million $46,500 ➔ More than $6.0 million and less or equal to $7.5 million $57,000 ➔ More than $7.5 million $96,000

The information contained in this webinar presentation is meant for guidance purposes only and not as professional legal or tax advice. Further, it does not give personalized legal, tax, investment, or any business advice in general.

Requirements for Retailers

Below guidelines are based on regulations published by the Bureau of Cannabis Control (BCC):

• Hours of operation

○ 6:00am to 10:00pm (PST)

• Access to the licensed premises - STOREFRONT ONLY

○ Must be 21+ years of age or 18+ years of age with medical recommendation ○ Age verification prior to entry ○ Limited access areas are for employees only

• Cannabis goods for sale

○ May only sell cannabis goods/accessories and branded merchandise ○ Goods must not be expired ○ Must receive all cannabis goods from a licensed distributor

The information contained in this webinar presentation is meant for guidance purposes only and not as professional legal or tax advice. Further, it does not give personalized legal, tax, investment, or any business advice in general.

Requirements for Retailers (cont.)

• Customer returns

○ May be accepted by retailer ○ Returned goods must be destroyed or, if defective, returned to distributor

• Cannabis goods packaging, labeling, and exit packaging

○ Opaque, resealable, tamper-evident and child resistant ○ Does not apply to immature plants being sold

• Shipments and records

○ Only receive shipments between 6:00am to 10:00pm (PST) ○ Must maintain inventory records, financial records, personnel records, training records, contracts, permits, security records, sales records, etc.

• Retailer to retailer transfer of goods

○ Same license holder for both locations ○ Hire licensed distributor to transport

The information contained in this webinar presentation is meant for guidance purposes only and not as professional legal or tax advice. Further, it does not give personalized legal, tax, investment, or any business advice in general.

Delivery Procedures

• Age Verification

○ Delivery employees must verify the age by inspecting a valid form of identification of all delivery customers, in person, before they complete delivery of the cannabis goods.

• Only deliver to a physical address, but not sensitive sites (e.g. schools, day care, etc.)
• Delivery driver documents

○ Copy of the retailer’s license ○ Government-issued ID ○ ID badge provided by the licensed retailer ○ Prepared request receipts for delivery

• Delivery employees should keep record of inventory ledger, request receipts and log of stops
• $5,000 maximum value of cannabis goods carried at any time
• Delivery vehicle must be an enclosed motor vehicle equipped with a GPS device and secure

storage for cannabis goods. ○ Vehicle is not required to be owned by the retail licensee

The information contained in this webinar presentation is meant for guidance purposes only and not as professional legal or tax advice. Further, it does not give personalized legal, tax, investment, or any business advice in general.

BCC Requirements for All Annual Licenses

• Owner(s) Information
• Evidence of Legal Right to Occupy
• Premises Diagram
• Business Formation Documents
• Limited Waiver of Sovereign Immunity*
• California Environmental Quality Act (CEQA)

Compliance

• Seller’s Permit
• Labor Peace Agreement

The information contained in this webinar presentation is meant for guidance purposes only and not as professional legal or tax advice. Further, it does not give personalized legal, tax, investment, or any business advice in general.

• Financial Information Form
• Surety Bond
• Compliance with the Compassionate Use Act
• Live Scans
• Operating Procedures

○ Transportation ○ Inventory ○ Quality Control ○ Security In the following slides, we outline the general requirements for all cannabis business license applicants in California. Use the online portal and other resources found at bcc.ca.gov to fill out an application.

*This only applies if the applicant is a federally recognized tribe or other sovereign entity

Owner Submittal

Owners can be defined as individuals, business entities, or other groups with an aggregate ownership interest of 20% or more in the business applying for a license. An owner could also be the chief executive officer (CEO) or member of the board of a non-profit, or an individual who will participate in the direction, control, or management of the business, as outlined in Business and Professions Code, Division 10, Sections 26001al. Percentages of ownership interest, prior convictions, licensing sanctions and financial interests in other cannabis businesses must also be disclosed

The information contained in this webinar presentation is meant for guidance purposes only and not as professional legal or tax advice. Further, it does not give personalized legal, tax, investment, or any business advice in general.

Legal Right to Occupy

Leasing Vs. Owning

• Leasing the property, the Landlord will have to provide documentation
• If the applicant is the landowner, then the Applicant will have to provide

a title or deed of the property, demonstrating the applicants ownership.

The information contained in this webinar presentation is meant for guidance purposes only and not as professional legal or tax advice. Further, it does not give personalized legal, tax, investment, or any business advice in general.

The Premises Diagram

• Made to scale
• APN and parcel boundaries
• Premises boundaries/dimensions
• Perimeter dimensions of all rooms
• Entrances/exits
• Common areas
• Interior partitions, windows and doors
• Activity descriptions for each discrete

area

The information contained in this webinar presentation is meant for guidance purposes only and not as professional legal or tax advice. Further, it does not give personalized legal, tax, investment, or any business advice in general.

• Limited access areas
• Numbering and locations of all

cameras

• Label any neighboring licensees and
• ther businesses on the property
• NOTE: Microbusinesses with

cultivation activities must provide additional premises information (e.g. roads, water crossings, etc.)

Business Formation Documents

• Sole proprietor
• Fictitious Business Name (DBA)
• Appropriate tax forms
• LLC, Limited Partnership, General Partnership, or Corporation
• Some combination of the following documents in addition to those required by a

sole proprietor: ○

Articles of Incorporation, Statement of Information, Certificate of Stock, Stock Ledger, Organizational charts, Bylaws, List of Board Members, Partnership Agreements, Statement

• f Partnership Authority, Certificates of Limited Partnership, and Operating Agreements

The information contained in this webinar presentation is meant for guidance purposes only and not as professional legal or tax advice. Further, it does not give personalized legal, tax, investment, or any business advice in general.

Other Business Types

• Trusts must provide a Certificate of Trust establishing Trustee Authority.
• Foreign Corporation or Foreign Limited Liability Company
• Statement and Designation by Foreign Professional Corporation, Certificate of

Qualification, Certificate of Registration, or Certificate of Status issued by the California Secretary of State.

The Secretary of State maintains a portal called “cannabizfile”

The information contained in this webinar presentation is meant for guidance purposes only and not as professional legal or tax advice. Further, it does not give personalized legal, tax, investment, or any business advice in general.

CEQA Compliance

• Documentation that demonstrates exemption or compliance with CEQA

○

Notice of Determination

○

Notice of Exemption

• For this purpose, the BCC has uploaded the following forms to its portal:

○

CEQA Project-Specific Information Form

○

CEQA Exemption Petition Form

• If no CEQA compliance or exemption documentation from the City or County
• Burden falls upon the applicant

The information contained in this webinar presentation is meant for guidance purposes only and not as professional legal or tax advice. Further, it does not give personalized legal, tax, investment, or any business advice in general.

Standard Operating Procedures

Areas of proposed operating procedures for each applicant:

• Transportation Procedures
• Inventory Procedures
• Quality Control Procedures
• Security Procedures

We have a video on SOPs on our YouTube Channel & we can help you develop these

(https://youtu.be/iLdD8M_oLmM)

The information contained in this webinar presentation is meant for guidance purposes only and not as professional legal or tax advice. Further, it does not give personalized legal, tax, investment, or any business advice in general.

Additional Requirements

• CDTFA’s Seller’s Permit: apply online (https://onlineservices.cdtfa.ca.gov)
• Labor Peace Agreement: if the applicant has employed 20 or more employees
• Surety Bond: submit a $5,000 surety bond to the state
• Financial Information Form: a list of all investments, loans, funds, and gifts

associated with the cannabis business

• Compliance with Compassionate Use Act: approval from local agency
• Live Scans: background checks (https://oag.ca.gov/fingerprints/locations)

The information contained in this webinar presentation is meant for guidance purposes only and not as professional legal or tax advice. Further, it does not give personalized legal, tax, investment, or any business advice in general.

After your State License is Issued

• Track and Trace Training

○ Ten (10) business days to complete CalCannabis’ California Cannabis Track and Trace Training ○ To gain access to the track-and-trace system the licensee’s designated account manager must have completed, and provided proof of completion, of the track-and-trace training prescribed by the department

The information contained in this webinar presentation is meant for guidance purposes only and not as professional legal or tax advice. Further, it does not give personalized legal, tax, investment, or any business advice in general.

Key Takeaways

• All cannabis retailers apply through the

BCC portal

• Extensive business and operational

documentation is required

• Annual Licensing Fees are scaled based
• n the size of your business
• Ask a specialist for guidance when

applying for local and state approval

The information contained in this webinar presentation is meant for guidance purposes only and not as professional legal or tax advice. Further, it does not give personalized legal, tax, investment, or any business advice in general.