How to Start a Cannabis Business in California

African American business owner turning an "open" sign in a door front

With the legalization of recreational marijuana use in California, it’s no surprise that many business owners have capitalized on a new business opportunity. But unlike starting many other businesses, there are strict regulations that must be followed to abide by the state’s rules.

The California Secretary of State’s Office outlines critical steps that are needed to start a Cannabis business.

1. Choose the Type of Business and the Name

Choosing the right entity for your business is critical with regard to how the business and consumers will be taxed. Business owners will also need to create a business name and ensure that the same name is not already registered.

2. Register the Business

Proper documentation and associated fees must be submitted to the Secretary of State’s office. Depending on the type of business will determine how the business should be registered.

3. Acquire Proper Licenses, Permits, or Additional Authorizations

Registering a business with the state is not enough to officially open a business. Additional licenses, permits, or other authorizations will be required for the city, county, and state.

4. File Additional Paperwork and Registration Information

Business owners must file paperwork with the IRS and other federal and state agencies to ensure compliance and employee safety. This includes the:

  • Internal Revenue Service (IRS);
  • Franchise Tax Board (FTB);
  • Employment Development Department (EDD);
  • California Department of Tax and Fee Administration (CDTFA); and,
  • California State Board of Equalization (BOE).

Even when submitting all the required documents and registrations, a business application can still be denied as part of this process.

How Purdy & Bailey, LLP Can Help

With more than 65 years of combined experience, the team at Purdy & Bailey, LLP has assisted countless business owners in getting their business off the ground. Especially when considering opening a cannabis business, there is little room for error. Working with trusted and knowledgeable cannabis business formation attorneys will give you the best chance to get your business started faster.

Contact our team, day or night, to see how we can help.

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