Licensing
License Types (DCC)
- Cultivation Licences — Specialty Cottage (≤25 plants), Specialty Small (≤5,000 ft²), Small (≤10,000 ft²), Medium, Large, Nursery, Processor
- Statewide plant canopy cap removed for large cultivators (2023)
- Manufacturing Licences — Types 6 (volatile solvents, restricted) and 7 (all methods); plus Shared-Use Facility
- Retailer Licence — Type 10 (non-storefront/delivery) and Type 10A (storefront retail)
- Delivery-only retailers permitted state-wide since 2023
- One entity may hold up to 3 retail licences
- Distributor Licence — mandatory for transport between cultivators, manufacturers, retailers
- Testing Laboratory Licence — Type 8; ISO/IEC 17025 accreditation required
- Microbusiness Licence — combines cultivation (≤10,000 ft²), manufacturing, distribution, retail
- Event Organiser Licence — temporary cannabis events
- Equity Licences — DCC equity programme fee waivers and priority review
Taxation
Effective Consumer Tax Rate~30–45% combined state + local in major cities
State Excise Tax
15%
On retail sales — paid by retailer
State Sales Tax
7.25%
Base CA state + county rate
LA City Tax
10%
Up to 10% cannabis business tax
SF Local Tax
5–7.5%
Varies by business type
Tax Structure
- Cultivation tax eliminated July 2022 (AB 195) — only retail excise + sales tax remain
- Retail excise 15% applied to the average market price (not just retail price) — calculated by CDTFA
- Local jurisdictions may add cannabis business taxes — LA, SF, Oakland each have their own rates
- Medical cannabis: state excise still applies; however, patients with valid MMIC may be exempt from state sales tax
Advertising
DCC Advertising Rules
- No advertising within 1,000 ft of schools, daycare, youth centres, or playgrounds (unless 85% of audience is 21+)
- Required statement on all ads: 'For use only by adults 21 and older. Keep out of reach of children.'
- DCC licence number on all advertising
- Health warnings as prescribed by DCC regulations
- Digital/social media: Must implement age-verification gates; no targeting under-21 users
- Instagram, Facebook, Google restrict cannabis ads — advertisers must use compliant third-party platforms
- Influencer marketing: audience must be documented 71.6%+ adults
- Prohibited: depictions of minors, free product giveaways tied to purchase, false health claims
Workplace Rules
Employee Protections — AB 2188 (effective Jan 2024)
- Employers may not discriminate in hiring/firing/terms based on cannabis use away from work
- Lawful off-the-job cannabis use protected for employees 21+
- Standard drug tests that show non-psychoactive cannabis metabolites may not be used as basis for adverse action
- Tests that measure active THC impairment (blood tests) are still permitted
- Exceptions: building/construction trades, positions requiring federal background check, DOT-regulated safety-sensitive roles
- Employers in federally-regulated industries retain full drug-testing rights
- Employees may not be impaired at work — on-duty cannabis use prohibited by all employers
Possession & Transactions
Adult-Use Possession Limit1 oz (28.5 g) flower · 8 g concentrate
1 oz
Flower — on person
8 g
Concentrate
6 plants
Home cultivation
500 mg
Edible THC per package
Transactions
- Age: 21+; valid government-issued ID required at point of sale
- Purchase limits per visit: 1 oz flower, up to 8 g concentrate, up to 6 seeds
- Licensed delivery permitted state-wide; retailers must hold delivery endorsement
- No on-site consumption at retailers unless local consumption lounge licence issued
Product Testing
- Full panel testing required: potency (THC, CBD, 12+ cannabinoids), terpenes, pesticides (66 pesticides panel), heavy metals, microbials, mycotoxins, water activity, residual solvents
- Tested by DCC-licensed Type 8 laboratories — no financial interest in licensees they test
- Certificate of Analysis posted to DCC track-and-trace (METRC); public COA QR code on labels required
- Failed batches must be quarantined; may be remediated (e.g. re-extraction) with DCC approval
- Random compliance sampling conducted by DCC inspectors
Medical Use
Qualifying Conditions (MMIC)
- Cancer, anorexia, AIDS, chronic pain, spasticity, glaucoma, arthritis
- Migraine, cachexia, severe nausea, seizures (any chronic/persistent medical symptom that substantially limits ability to conduct major life activities)
- Open-ended: any condition for which cannabis provides relief as determined by a California-licensed physician
Medical Possession Limit8 oz (226 g) by default · More with physician recommendation
Programme Rules
- MMIC issued by county health departments — annual renewal, ~$100 fee (reduced for Medi-Cal patients)
- Primary caregivers may cultivate and possess additional amounts
- Patients with valid MMIC: exempt from 7.25% state sales tax — significant saving
- Patients aged 18–20 may use medical cannabis with physician certification
- No home-cultivation prohibition may be imposed on medical patients by local ordinance
Adult-Use Cannabis
Differences from Medical
- Age: 21+ vs 18+ for medical
- Possession: 1 oz adult-use vs 8 oz medical
- Tax: adult-use pays full state sales tax; medical MMIC holders exempt from sales tax
- Home grow: 6 plants (same for both)
Local Ordinances
- Local opt-out: Approximately 2/3 of CA cities/counties ban retail cannabis — home cultivation still allowed
- Los Angeles, San Francisco, San Diego — full retail programmes
- Bakersfield, Fresno (historically) have had bans; evolving
- Consumption lounges: permitted by state law; local approval required — Amsterdam-style lounges in LA, SF
- Delivery: state-wide delivery permitted even into ban jurisdictions for adult-use (DCC rule); contested by some localities
Penalties
- Possession >1 oz (adult 21+): Infraction — $100 fine
- Sale without licence: Felony — 16 months to 3 years
- DUI cannabis: VC 23152(f) — misdemeanour; fines, DUI school, possible jail
- Minors (under 21): Infraction — drug counselling, community service