Cannabis License Types and their Associated Regulations

Medical marijuana is currently legal in 29 states. Recreational marijuana is legal in 9. But cannabis is still a highly regulated business. Because of this, every entrepreneur needs to get the right cannabis license types to avoid trouble with the federal government’s drug laws.

Cannabis License Types and their Associated Regulations

Licenses are given under strict conditions and depend on the type and location of your business. Each business gets one license. It is only under special conditions that you can get two, never more.

We shall look at the major types of cannabis licenses and their associated regulations:

Licenses for Marijuana Cultivation – Type 1, 2, And 3

If your business involves cultivation of marijuana, you need one of these three licenses – Type 1, 2 or 3. They permit businesses to grow, dry, cure, harvest, grade, and trim cannabis plants. The licenses specify two conditions: One, the area of the space used in growing the cannabis plants. A proxy for the number of plants grown. And secondly, the growing environment, whether under natural light, artificial light or a mix of the two.

Type 1 Licenses

There are three Type 1 licenses:

Type 1 -For outdoor cultivation that uses natural light and has 25 mature plants or less.

Type 1A – For indoor cultivation using artificial light. The growing area should be less than 500 square feet

Type 1B – For mixed-light cultivation with both artificial and natural light, and a growing area of less than 2500 square feet

If you hold a Type 1 license, another license you can get is Type 6, 7 or 10.

Type 2 Licenses for Small Area Cultivation

Type 2 licenses are also divided into three categories.

Type 2 – For outdoor cultivation of 50 mature plants that do not touch each other

Type 2A – For an indoor growing area of between 501 and 5000 square feet

Type 2B – For mixed-light cultivation and a growing area of between 2501 to 5000 square feet.

A holder of Type 2 license can get one additional license of Type 6, 7 or 10A

Type 3 Licenses For Medium Cultivation Areas

Medium cultivation involves a growing area of between 10,001 and 22,000 square feet. It also has three licenses:

Type 3 – Outdoor

Type 3A- Indoor

Type 3B – Mixed-light

With a Type 3 license, you can also get a Type 10A.

Type 4 License for Nursery Cultivation

This license allows you to produce materials that are used to plant, propagate and cultivate medical cannabis. Such materials include seeds, seedlings, clones, and other agriculture products.

Manufacturer Licenses: Type 6 And 7 For Manufacturing of Nonvolatile and Volatile Solvents

The state department of health regulates and limits the number of these two licenses it issues at any given time.

Type 6 license is for manufacturing nonvolatile solvents. The license allows businesses to prepare, produce. Propagate or compound manufactured medical marijuana or medical marijuana products. This has to be either directly, indirectly through extraction methods or independently by chemical reactions. Or using a combination of both extraction and chemical reactions at a fixed location. The medical cannabis must be packaged or repackaged and the containers labeled or relabeled at that location.

A Type 6 license holder may also hold one of the following licenses: Type 1, 1A, 1B, 2, 2A, 2B, or 10A

Type 7 License for the Manufacture of Volatile Solvents 

This license allows businesses to produce, prepare, propagate or compound manufactured medical marijuana or medical marijuana products. This has to be either directly, indirectly or through extraction methods or independently by chemical reactions or using a combination of both extraction and chemical reactions at a fixed location. The medical cannabis must be packaged or repackaged and the containers labeled or relabeled at that location.

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A Type 7 license holder may also hold one of the following licenses: Type 1, 1A, 1B, 2, 2A, 2B, or 10A

Type 8 License: For Testing Laboratory

A business holding the tasting lab license is not eligible to hold any other license in the cannabis industry.

The testing laboratory license is only for a site, entity or facility that offers or conducts tests on medical marijuana or medical marijuana products. The facility must meet two conditions:

  1. It must be accredited by an accrediting body from outside the medical cannabis industry, and
  2. Registered by the  State Department of Public Health

Type 9 License – For Non-Store Front Retailers

This license gives authority to sell cannabis only exclusively through delivery. The premises of such a licensee are closed to the public.

Type 10 License – For Dispensary

Dispensaries are facilities where medical marijuana, medical marijuana products, or devices used with marijuana products are offered for retail sale. There are two categories of dispensaries:

  1. Type 10: General Dispensary. The general dispensary is not allowed to hold any other license
  2. Type 10A: Dispensary with three or less retail sites. Type 10A dispensary may also hold one other license from among Type 1, 1A, 1B, 2, 2A, 2B, 6, or 7,

Type 11 License for Distributor

This is a business license that allows the purchase of medical marijuana from a licensed cultivator or medical marijuana products from a licensed manufacturer for eventual sale to a licensed dispensary. This license does not allow retail sales.

Anyone applying for Type 11 license must also apply for Type 12 transporter license.  You are, however, not allowed to apply for any other license.

Type 12 License for Transporter

It allows the movement of medical marijuana or medical marijuana products from one permitted business location to another for commercial purposes.

The holder of Type 12 license can also apply for a Type 11 license.

Takeaway

The cannabis industry is lucrative and is expected to grow as more states loosen their regulations on cannabis use.  If you want to join in the business, you need to have the correct licenses. It is advisable to team up with a good consultation company to help you navigate the often long and tedious cannabis license application process.

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