Cannabis Distribution License in California: Requirements

Here’s what you need to know about getting a cannabis distribution license in California:

Two main license types:
- Type 11: Store, test, package, and transport cannabis products
- Type 13: Transport cannabis products between licensed businesses
Key steps to get licensed:
1. Write a business plan
2. Choose a compliant location
3. Get local permits
4. Apply to the state
5. Meet all requirements
6. Pay fees
7. Follow ongoing rules
Main requirements:
- Business structure details
- Building layout and zoning compliance
- Operating procedures
- Financial information
- Background checks
License fees based on annual revenue:

Annual Revenue	Application Fee	License Fee
Up to $1M	$1,000	$1,500
$1M – $2.5M	$1,000	$6,000
$2.5M – $5M	$1,000	$11,250
$5M – $10M	$1,000	$22,500

Ongoing compliance:
- Product quality assurance
- Inventory tracking
- Safe transport
- Product testing
- Annual license renewal

Following all rules is crucial to keep your license and operate legally in California’s cannabis industry.

2. Types of Cannabis Distribution Licenses

2.1 Two main license types: Type 11 and Type 13

California offers two main cannabis distribution licenses:

License Type	What It Allows
Type 11	Store, test, package, and move cannabis products
Type 13	Move cannabis products between licensed businesses

The Department of Cannabis Control (DCC) gives out these licenses. You need one to work in cannabis distribution in California.

2.2 Differences between Type 11 and Type 13 licenses

Here’s how Type 11 and Type 13 licenses differ:

Feature	Type 11 License	Type 13 License
Storage	Yes	No
Testing	Yes	No
Packaging	Yes	No
Transportation	Yes	Yes
Security needs	Higher	Lower
Fees	Higher	Lower

Type 11 lets you do more, but costs more and needs more security. Type 13 is just for moving products, so it’s simpler and cheaper.

Choose the license that fits your business needs. Make sure you can meet all the DCC rules for whichever one you pick.

3. Getting Ready to Apply

3.1 Writing a business plan

Before applying for a cannabis distribution license in California, write a clear business plan. This plan should cover:

Your company’s goals
How you’ll run your business
Who’s in charge
Money matters

A good business plan helps you:

Know what you want to do
Find your customers
Plan how to sell
Figure out costs and income
Set up your team

Include these parts in your plan:

Part	What to Include
Summary	Quick overview
Company Info	What your business does
Market Study	Who will buy from you
Products	What you’ll sell
Sales Plan	How you’ll sell
Operations	How you’ll run things
Money	Expected income and costs

3.2 Choosing a business location

Pick a good spot for your cannabis distribution business. Make sure it follows local rules and is easy to reach for other cannabis businesses.

Think about:

Local laws: Can you run a cannabis business there?
Easy to reach: Can trucks get there easily?
Safe: Does it meet state safety rules?
Parking: Is there room for cars and trucks?

3.3 Getting legal advice

Talk to a lawyer who knows about cannabis businesses. They can help you:

Understand the rules
Fill out forms correctly
Avoid mistakes

When picking a lawyer:

Look for someone who knows cannabis laws
Check if they’ve helped others like you
Ask about their fees
Read what other people say about them

4. How to Apply for a License

4.1 Getting local permits

Before you can get a state license, you need local permits. Each city or county has its own rules. Here’s what to do:

Check if your business location allows cannabis activities
Get a local business license
Meet local health and safety rules
Follow local laws

To learn more, check your city or county government website or call their licensing office.

4.2 Submitting your state application

After getting local permits, apply for your state license. Here’s how:

Make an account on the California Department of Cannabis Control (DCC) website
Pick your license type (Type 11 or Type 13)
Send in required papers
Pay the $1,000 application fee

For more details, visit the DCC website.

4.3 Documents you need

You’ll need to provide these papers:

Document Type	Details
ID proof	California residency
Business info	Structure and ownership
Money info	Bank statements, tax returns
Location details	Building layout, zoning info
Surety bond	At least $5,000 per location
CEQA compliance	Environmental rules
Forms	DCC LIC 019, DCC-9206

Find a full list on the DCC website.

4.4 Application costs

Here’s what you’ll pay:

Cost Type	Amount
Application fee	$1,000
License fee	Varies by type and size
Surety bond	At least $5,000 per location
Other costs	Lawyer fees, business registration

Check the DCC website or ask a cannabis lawyer for more info on costs.

5. Main License Requirements

5.1 Business structure and ownership details

To get a cannabis distribution license in California, you need to provide:

Information	Details
Business type	Sole proprietorship, partnership, corporation, LLC
Names	Business name and DBA (doing business as)
Location	Business address
Ownership	Names, addresses, and ownership percentages
Tax info	Business tax ID and California seller’s permit number

You also need these documents:

Articles of incorporation or organization
Business license or registration
Tax returns and financial statements

5.2 Building layout and zoning rules

Your business location must follow local zoning laws. Provide:

Requirement	Description
Floor plan	Detailed layout with square footage
Security	Location of doors, windows, cameras, and alarms
Storage	Areas for inventory

Also include:

Zoning approval or permit
Building permit or occupancy certificate
Fire department approval

5.3 Operating procedures

Write down how you’ll handle:

Inventory tracking
Security and cameras
Employee training and background checks
Waste disposal
Customer service

Make sure these steps fit your business and follow all laws.

5.4 Financial information

You need to show:

Financial Document	Purpose
Bank statements	Prove financial stability
Tax returns	Show income history
Insurance proof	Demonstrate liability coverage
Business budget	Project future finances

5.5 Background checks and owner qualifications

All owners, officers, and directors must:

Requirement	Details
Age	Be at least 21 years old
Residency	Live in California
Criminal record	Have no disqualifying offenses
ID	Have valid government-issued ID

Provide:

Background check results
Proof of where you live
Proof of age and citizenship

These rules make sure cannabis business owners can follow the law.

6. Following Rules and Standards

As a California cannabis distribution license holder, you must follow state rules and standards. This includes product quality, inventory tracking, record-keeping, safe transport, security, and product testing.

6.1 Ensuring Product Quality

All cannabis products must pass tests by a licensed lab. Here’s what they check:

Test	What It Checks
Moisture	Product isn’t too wet or dry
Solvents	Leftover chemicals from making the product
Pesticides	Chemicals used to protect plants
Microbes	Harmful bacteria or mold
Mold toxins	Poisons made by mold
Foreign stuff	Things that shouldn’t be there (dirt, hair)
Heavy metals	Harmful metals like lead
THC and CBD	Amount of main cannabis chemicals
Terpenes	Plant chemicals that affect smell (if asked)

6.2 Tracking Inventory and Keeping Records

You must:

Use a system like Metrc to track products
Keep records of all sales, buys, and moves

6.3 Safe Transport and Security Measures

When moving cannabis products:

Use vehicles that meet state rules
Have a motor carrier permit
Lock products in a closed box or container

6.4 Product Testing Rules

You need to:

Test all products for bad stuff and strength
Put test results on labels
Make sure products meet state standards

7. License Fees and Renewal

7.1 Initial License Fees

In California, cannabis distribution license fees depend on how much money your business makes each year. Here’s a breakdown:

Yearly Income	Application Fee	License Fee
Up to $1,000,000	$1,000	$1,500
$1,000,001 – $2,500,000	$1,000	$6,000
$2,500,001 – $5,000,000	$1,000	$11,250
$5,000,001 – $10,000,000	$1,000	$22,500
$10,000,001 – $20,000,000	$1,000	$45,000
$20,000,001 – $30,000,000	$1,000	$75,000
$30,000,001 – $50,000,000	$1,000	$120,000
$50,000,001 – $70,000,000	$1,000	$180,000

7.2 Yearly Renewal Process and Costs

To keep your license, you need to renew it every year. Here’s what you need to know:

When to start: 60 days before your license expires
How you’ll know: The Department of Cannabis Control (DCC) will email you
What to do: Fill out a form and pay the fee
How much it costs: The same as your first license fee (see table above)
What else you need: Proof of how much money your business made in the past year

Important: If you don’t renew on time, you can’t sell, move, make, test, or give out cannabis products until you do.

8. Common Problems and Solutions

8.1 Dealing with zoning issues

Finding the right place for your cannabis distribution business can be hard because of zoning rules. Here’s how to handle this:

Step	Action
1	Check local laws to see if your chosen spot allows cannabis businesses
2	Read zoning rules for your area
3	Talk to a lawyer who knows about real estate and cannabis
4	Look for places already okay for cannabis distribution
5	Be ready to explain how your business will follow local rules
6	Try to work with local officials to find a good solution

8.2 Keeping up with new rules

Cannabis laws change often. To stay on top of things:

Action	How it helps
Check the DCC website often	Learn about new rules
Go to industry events	Hear about changes
Join cannabis groups	Meet others and share info
Hire a rules expert	Get help understanding complex laws

8.3 Fixing application mistakes

If you make a mistake on your application:

1. Look over your form carefully to find errors

2. Call the DCC or local office to ask how to fix mistakes

3. Send in any extra papers they need

4. Be ready to pay more fees if needed

9. Staying Compliant After Getting Licensed

9.1 Ongoing Legal Requirements

After getting your cannabis distribution license, you need to follow these rules:

Requirement	What to Do
Update business plan	Check and change your plan as needed
Keep good records	Write down all sales, buys, and inventory
Follow packaging rules	Make sure labels and packages meet state laws
Know new laws	Keep up with changes in cannabis rules

9.2 Getting Ready for Checks and Audits

The state will check your business often. Here’s how to be ready:

Task	Details
Organize records	Keep all papers neat and easy to find
Clean up	Keep your place tidy and store cannabis right
Train workers	Teach staff how to follow the rules
Make a plan	Know what to do when inspectors come

9.3 Keeping Up with New Laws

Cannabis laws change a lot. Here’s how to stay informed:

Method	How It Helps
Check DCC website	Find the newest rules
Go to cannabis events	Learn about changes and meet others
Join cannabis groups	Get updates and talk to other businesses
Hire an expert	Get help understanding tricky laws

10. Conclusion

10.1 Main steps to get a license

Here’s a quick look at the main steps to get a cannabis distribution license in California:

Step	What to Do
1. Make a business plan	Write down your business details, goals, and money plans
2. Pick a location	Find a spot that follows local rules
3. Get local permits	Ask your city or county for needed permits
4. Apply to the state	Fill out forms on the Department of Cannabis Control website
5. Meet all requirements	Show your business setup, how you’ll work, and money info
6. Follow state rules	Test products, track inventory, and keep things safe
7. Pay fees	Pay for your license based on how much money you make
8. Keep following rules	Update your plans, keep good records, and follow packaging rules

10.2 Why following rules is important

Following California’s rules for cannabis distribution is very important. If you don’t:

You might have to pay fines
You could lose your license
Your business might have to close

By following the rules, you:

Help keep your business running
Make the cannabis industry safer for everyone
Show that you’re a responsible business owner

FAQs

Do you need a license to distribute CBD in California?

Yes, you need a license to distribute CBD in California. Here’s what you should know:

License Type	Issuing Agency
State License	Bureau of Cannabis Control
Cultivation License	CDFA’s Cal Cannabis Cultivation Licensing
Manufacturing License	CDPH’s Manufactured Cannabis Safety Branch

The Department of Cannabis Control offers two types of distribution licenses:

License Type	What It Allows
Type 11	Transport cannabis products between businesses and move finished goods to stores
Type 13	Transport cannabis products between businesses

With these licenses, you can:

Move products between growers, makers, and other distributors
Take finished products to stores
Transport your own products or those of other businesses