Cannabis Business Operations Under MMRSA FAQ

CANNABIS BUSINESS OPERATIONS UNDER MMRSA:

Frequently Asked Questions

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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 uniformly apply.

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 standards?

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.

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