CANNABIS BUSINESS OPERATIONS UNDER MMRSA:
Frequently Asked Questions
If I operated a cannabis business that cultivated, manufactured and/or
dispensed cannabis as a single business entity prior to MMRSA, can I continue
to do so under the new permit structure?
It depends. The new laws allow one narrowly-tailored exception to the mandated
license separations. In order to continue to operate under one license,
the answer to each of the following series of questions must be yes:
- Was the business in operation prior to July 1, 2015?
- Prior to July 1, 2015, did the jurisdiction that the business is located
in adopt an ordinance either allowing or requiring businesses to cultivate,
manufacture, and dispense cannabis/cannabis products?
- Has it continuously cultivated, manufactured, and dispensed medical cannabis/cannabis
products since that date?
- Is the business registered with the Board of Equalization?
- Has the business been in full compliance with applicable local ordinances?
If the answer to all of these questions is yes, you may not be subject
to the new license restrictions until January 1, 2026, when they will
While the exemption does not require all cultivation and manufacturing
to occur or have occurred within the business’s local jurisdiction,
a similar test applies for any cultivation and manufacturing outside of
the jurisdiction as well: It must have begun before July 1, 2015, and
it must have been in full, continuous compliance with applicable ordinances
in its area. This means that, even if a business qualifies to continue
cultivating, manufacturing, and dispensing as a single entity in spite
of the new license laws, it may not establish new locations that do so
under that entity. Instead, it can only continue operations that began
prior to July 1, 2015.
If my cannabis business is allowed to continue cultivating, manufacturing,
and dispensing as a single entity, will I ever have to meet MMRSA license
Yes. Under the license separation exemption, a cannabis business may continue
to lawfully operate its approved facilities until January 1, 2026, so
long as the business remains in continuous compliance with both local
and state ordinances. However,
by January 1, 2026,
all medical cannabis businesses must comply with MMRSA laws. This means that a business that had operated under the license separation
exemption must restructure the entity, apply for and acquire the correct
licenses/local permits, and meet updated environmental, health, and safety
standards by the end of 2025.
Furthermore, under the MMRSA, any person or entity that holds a state MMRSA
license is flatly prohibited from holding any ownership interest
whatsoever in any property (personal or real) or other assets affiliated with another
license category. Translated, this means that - in 2026, if your previously-exempted
cannabis business elects to continue operating its cultivation and manufacturing
facilities (a permissible combination under the new licensing structures) - you
may not have any financial interest in
any dispensaries, period. It’s illegal.
Even if you currently operate under the license separation exemption, awareness
of the new laws and restrictions will not only help you ensure compliance
in 2026 - it will also help you make the most financially-sound, long-term
decisions for your cannabis business.
My testing facility requires sampling methods for each “lot”
of cannabis or product. What does that mean?
A lot is a batch, or a specifically identified portion of a batch, that
has uniform character and quality within specified limits. If the cannabis or cannabis product is produced by a continuous process,
a “lot” is a specifically identified amount produced in a
unit of time or a quantity in a manner that ensure that it has uniform
character and quality within specified limits.
What is an “accrediting body” for purposes of medical cannabis
or medical cannabis product testing?
This means that the accreditor must be a signatory to the International
Laboratory Accreditation Cooperation Mutual Recognition Arrangement.