California is one of the most well-developed cannabis markets in the United States. The state was an early adopter of medical marijuana, allowing its usage in 1996. Then, California took the next step and legalized cannabis use recreationally in 2016 under “Proposition 64”. This early adoption of medical marijuana helped pave the way for the rest of the country to progress in the cannabis space.
Reports from November 2021 state that up to 90% of all cannabis sales remain “underground”, or outside of dispensaries licensed by the Department of Cannabis Control (DCC). Even though the illegal cannabis market is large, licensed recreational dispensaries continue to grow and rake in substantial gains in California.
The 2021 fiscal year saw the cannabis industry bring in a total of $5.2 billion in taxable sales. This accumulated around $1.3 billion in total tax dollars from legal marijuana. The Californian cannabis industry is continuing to grow each quarter, making it more critical than ever to familiarize ourselves with the laws and regulations of the State.
Due to this, we at Custom Cones USA have taken a deep dive into the legalization process, Californian cannabis laws, and all the things you need to know to take the plunge into Golden State’s recreational landscape.
As mentioned previously, California was the first state to legalize medical marijuana on November 5th, 1996 under the “Proposition 215: Compassionate Use Act”. With the early adoption of medical-use cannabis, it was only a matter of time until recreational weed was allowed within the State.
The first step in legalization was the passing of the "Medical Cannabis Regulation and Safety Act," in 2016. The act comprised seven different bills, which ultimately helped regulate the cultivation, transportation, and use of medical cannabis. This helped pave the way for regulating recreational licenses in the future.
What followed was the 2016 “Proposition 64: Adult-use Act” which permitted adults 21 and above to purchase marijuana within State lines. However, it included that certain counties and jurisdictions can create their laws allowing or disallowing certain aspects of the cannabis business.
The first legal cannabis sales were made on January 1st, 2018 by dispensaries that were granted cannabis licenses by the DCC.
Businesses that hold one of two cannabis retail licenses are permitted to sell cannabis in California. The Type 9: non-storefront retailer allows delivery services within the state, while the Type 10: storefront retailer allows retail spaces for patrons to visit.
In total 17 different licenses are available via the DCC within California. Some of these licenses have other sub-licenses that differentiate from each other. These include:
To apply for any cannabis license you need to be prepared. To gather all necessary materials and information, visit the official DCC website.
The total annual fee is dependent on the operation size and services. Cannabis sales license holders can typically expect to pay between $4000 to $72,000 annually to renew their license.
The Cannabis Appellations Program (CAP) is to help clarify the region of cultivation for specific cannabis products. This helps build the validity and name branding of said regions, similar to how wine is appellated. It also pushes cultivators in the same region to work together to build that region’s brand. To join this program, one needs to pay a $14,250 proposition fee, along with a $2,850 petition fee.
California has a unique tax system set up around the cannabis industry. Cultivators, distributors, retailers, and manufacturers all have specific taxes that need to be adhered to. The most pricey tax comes to cultivators, which comes in around $9.65/oz. of flowers, $2.87/oz. leaves cultivation tax, and a $1.35/oz fresh cannabis plant tax.
Consumers are taxed with a 15% excise rate and an 8% state sales tax.
Although the underground cannabis market is still number one in California, these companies have been setting themselves apart from the rest and have solidified themselves as the top players in California.
Most popular for their live resins and incredible 100% 510 vape cartridges, Cannabiotix has paved a way for themselves in the California market. Offering all things cannabis, they boast a wide range of flowers, not just concentrates, that patrons can partake in.
Raw Garden handles every aspect of the cannabis process. Cultivation, manufacturing, and eventually retailing. This in-house approach guarantees quality for all of their cannabis. They are known for their concentrates, vape pens, cannabis PAX pods, and refined live resin diamonds.
Offering nearly every cannabis product under the sun, Stiiizy’s wide selection has helped push itself ahead of the competition. With constant innovations thanks to their in-house science team they have created their top-shelf vaping series that you have to try.
The “Emerald Triangle” is a small region in northern california that is known for being the largest cannabis producing region in the United States. The climate paired with the volatile landscape make for the perfect conditions for growing and producing cannabis.
With this in mind many cannabis companies are emerging across the country and are naturally choosing to sell their precious product in the great state of California. It is important for your brand to understand that since cannabis is not federally regulated that leaves all the legalities regarding production, packaging and sale of any cannabis based product left to the regulation of the state government in which you are doing business in.
Just like other states with legal medical and recreational cannabis - understanding the rules and regulations surrounding the packaging and labeling requirements in California state are vital to the overall success of your cannabis venture. Lucky for you, Custom Cones USA are the experts at all things packaging and labeling - offering you not only a one-stop-shop for all things pre-roll but also a one-stop-shop for all the knowledge you may need to acquire to ensure the success of your pre-roll brand!
California is known for their ever-changing rules for cannabis packaging and therefore keeping up with these changes can be rather difficult and can pose a risk to the sustainability of your brand. Your pre-roll brand should make sure to always check back with your states specific department that handles cannabis regulation in order to stay up-to-date with any changes that may occur. That being said, one should always ensure to understand the basics when it comes to cannabis packaging and understand the few basic rules that one should adopt or avoid when launching your pre-roll brand.
