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Manufacturing and Distribution in California

Brea Marijuana Attorneys, Serving Orange County and Beyond

The new marijuana industry in California that came online January 1, 2018, created market disruptions in the current scheme of cultivation, manufacturing, and distribution of marijuana as a result of going to what has been an almost unregulated and untaxed industry to a heavily regulated and heavily taxed industry both on the State and local levels.

If you have been following (as you should) the new laws, both emergency and permanent, even for the most seasoned of lawyers who have been advisors and counselors for the industry, the task of understanding and interpreting them is, to say the least, daunting.

Anthony Curiale and Associates, A Professional Corporation serves clients throughout California. Call (714) 684-6922 to schedule a consultation.

New Expenses, Taxes, and Compliance

No longer will entry level for endeavors such as dispensing and manufacturing be relatively inexpensive. The new tax and regulation schemes will add substantial costs to start up operations from the permitting process to operational processes and regulatory compliance.

Is there a pot of gold at the end of the rainbow? Probably. But the issue is first finding the rainbow and then getting over it. And that will be no easy task.

Take for instance some of the laws and regulations governing manufacturing (which includes edibles, infused product, and extractions). Without going into extreme detail, the law and regulations can be broken down into two major categories. The macro and micro.

The macro laws and regulations, which will apply both on the State level and local level are what you can do, where you can do it, when you can do it, how to apply, what the applications require in order to get a local permit and a State license. You must also find a location as a requirement to obtaining a permit. Beware of inflated rents and sales costs in properly zoned areas.

The devil in the details can be seen in the micro-regulations that must be complied with.

The general categories are as follows:

  • Equipment that must be used and certified for a particular use when engaged in the manufacture of edibles, extractions, and infused products;
  • Quality controls of raw material to be used;
  • Manufacturing operations;
  • Hazard controls;
  • Equipment and machinery qualifications;
  • Recordkeeping e.g. batch production;
  • Development of standard operating procedures;
  • Training program for all personnel;
  • Inventory control;
  • Waste management;
  • Labeling and packaging;
  • Track and trace with specific identifiers and marks; and
  • Advertising requirements.

    The above is just a sample for what the manufacturing industry must contend with and account for in cost, price, and in the end, the bottom line in the nature of return on investment.

    And we haven't yet discussed the rules and regulations for cultivation and retail distribution, some of which the above will also apply.

    Anthony Curiale and Associates, A Professional Corporation

    What to do? Hire lawyers heavily schooled in marijuana laws, past and present, as they apply to the marijuana industry as well as the nature of the industry as it is now and may evolve in the future. Hire lawyers who understand land use and zoning issues. Hire lawyers who understand entity formation and structure such as LLC's and corporations, along with the attendant operating agreements, bylaws, and cross-purchase agreements. All of these areas will come into play in order to find the rainbow and hopefully get over it.

    Our Brea marijuana attorneys can provide the needed guidance to successfully navigate what has become the uncharted waters of the new sea that will become the emergent marijuana industry. Check out our profiles to learn more.

    One last thought. Beware the scammers, both legal and non-legal. Anyone that guarantees you a result is a fool or a liar or both. No one can guarantee you will get a permit to operate on a local level or obtain a State license. This is the new gold rush. Buyer Beware.

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