{"id":286792,"date":"2019-10-16T15:04:34","date_gmt":"2019-10-16T20:04:34","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-law\/cannabis-law\/starting-a-cannabis-business\/setting-up-a-legal-marijuana-business-state-laws-to-know.html"},"modified":"2024-04-30T15:58:00","modified_gmt":"2024-04-30T20:58:00","slug":"setting-up-a-legal-marijuana-business-state-laws-to-know","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/cannabis-law\/starting-a-cannabis-business\/setting-up-a-legal-marijuana-business-state-laws-to-know.html","title":{"rendered":"Setting Up a Recreational Marijuana Business: State Laws To Know"},"content":{"rendered":"\n
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Setting Up a Legal Marijuana Business: State Laws to Know<\/h1>\n
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\n By Amber Sheppard, Esq.<\/a> | Legally reviewed by Amber Sheppard, Esq.<\/a>\n | Last updated\n
\n \n <\/i>\n Legally Reviewed\n <\/summary>\n\n
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This article has been written and reviewed for legal accuracy, clarity, and style by FindLaw\u2019s team of legal writers and attorneys<\/a> and in accordance with our editorial standards<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n\n

\n \n <\/i>\n Fact-Checked\n <\/summary>\n\n
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The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n<\/section>\n

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Key Takeaways<\/h2>\n

Setting up a recreational marijuana business involves navigating a complex landscape of state-specific regulations. Key considerations include understanding local zoning laws, advertising restrictions, and the various types of business licenses available, such as retail, cultivation, and manufacturing. Each state has distinct licensing requirements, application fees, and taxation rules. <\/p>\n\n <\/div>\n <\/div>\n<\/div>\n

Marijuana (or cannabis) is big business in states that have legalized the herb’s recreational use. However, cannabis is a Schedule I controlled substance<\/a> under federal law.<\/p>\r\n

The federal government has mostly not intervened in states that allow legal cannabis businesses. States that legalize recreational marijuana<\/a> sales create their own regulations for businesses. Yet there are federal criminal concerns to consider when opening your recreational use marijuana business.<\/p>\r\n

Marijuana’s ambiguous legal status creates unique legal challenges for cannabis businesses. If you are looking to open a recreational cannabis business of any kind, review the state laws where you want to open.<\/p>\r\n

This article takes a look at some of the state laws and regulations affecting legal cannabis businesses serving the recreational cannabis industry.<\/p>\r\n

Common Marijuana Business Regulations<\/h2>\r\n

Before starting a cannabis business<\/a>, determine if you want to sell medical marijuana<\/a>. States have medical marijuana statutes that may require specific dispensary licenses outside of recreational use licenses.<\/p>\r\n

No matter what type of marijuana business you open, there are common threads in most states you should pay attention to.<\/p>\r\n

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  1. Local zoning laws<\/a> and regulations decide your cannabis-related business’s location.<\/li>\r\n
  2. Before registering with the state, know who can be a business member. Some states require all members of a business to be residents. Others only require one member to be a resident.<\/li>\r\n
  3. Marijuana advertising<\/a> laws in your state.<\/li>\r\n<\/ol>\r\n

    Selected State Business License Regulations<\/h2>\r\n

    As an industry, the cannabis business is highly regulated<\/a>. The following states have been at the forefront of recreational use state laws.<\/p>\r\n

    Alaska<\/h3>\r\n

    Alaska residents legalized recreational marijuana by a ballot initiative in 2014. The initiative removed penalties for adults who use or possess marijuana. It allows home cultivation. Its regulatory framework for businesses began in 2016.<\/p>\r\n

    The table below provides highlights of Alaska’s recreational marijuana regulations:<\/p>\r\n\r\n
    Types of Business Licenses<\/td>\r\n
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    • Retail stores<\/li>\r\n
    • Cultivation facilities<\/li>\r\n
    • Testing facilities<\/li>\r\n
    • Manufacturing facilities<\/li>\r\n<\/ul>\r\n<\/td>\r\n<\/tr>
    Licensing Authority<\/td>\r\nAlaska Alcohol & Marijuana Board<\/a><\/td>\r\n<\/tr>
    License Restrictions<\/td>\r\n
    Application\/License Fees<\/td>\r\n
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    • Application fee: $1,000<\/li>\r\n
    • Renewal applications: $600<\/li>\r\n
    • Cultivation facility licensing: $1,000 – $5,000<\/li>\r\n
    • Testing facility license fee: $1,000<\/li>\r\n
    • Retail marijuana store license fee: $5,000 (renewal fee $7,000)<\/li>\r\n<\/ul>\r\n<\/td>\r\n<\/tr>
    Taxation<\/td>\r\nCultivation facilities must file a monthly tax return and pay an excise tax<\/a>.<\/td>\r\n<\/tr><\/tbody><\/table>\r\n

    California<\/h3>\r\n

    In 2016, California voters passed the Adult Use of Marijuana Act<\/a>, which made it legal for adults 21 and over to purchase, possess, and consume marijuana at home or in licensed establishments.<\/p>\r\n

    California requires a local city and county license for marijuana businesses. A state license will not be issued if it violates local laws or regulations.<\/p>\r\n

    The table below provides highlights of California’s recreational marijuana regulations:<\/p>\r\n\r\n
    Types of Business Licenses<\/td>\r\n
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    • Business Licenses<\/li>\r\n
    • Retail stores<\/li>\r\n
    • Cultivation facilities<\/li>\r\n
    • Testing facilities<\/li>\r\n
    • Manufacturing facilities<\/li>\r\n<\/ul>\r\n<\/td>\r\n<\/tr>
    Licensing Authority<\/td>\r\nDepartment of Cannabis Control<\/a> (previously three separate agencies)<\/td>\r\n<\/tr>
    License Restrictions<\/td>\r\n
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    • No residency requirements for state licenses, but counties or cities may impose residency requirements for local licenses<\/li>\r\n
    • Licenses can be denied to those convicted of serious or violent felonies or felonies involving fraud, deceit, embezzlement, providing controlled substances to minors, and drug trafficking with certain enhancements<\/li>\r\n<\/ul>\r\n<\/td>\r\n<\/tr>
    Application\/License Fees<\/td>\r\nApplication and license<\/a> fees vary by business type, including:
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    • Cultivation<\/li>\r\n
    • Manufacturing<\/li>\r\n
    • Distribution<\/li>\r\n
    • Testing<\/li>\r\n
    • Retail<\/li>\r\n
    • Microbusiness<\/li>\r\n<\/ul>\r\n<\/td>\r\n<\/tr>
    Taxation<\/td>\r\n