What Types of Medical Marijuana Business Licenses Exist?

What Types of Medical Marijuana Business Licenses Exist?

The Medical Marijuana Regulation and Safety Act introduced seventeen types of licenses. The list below explains the types of licenses created, along with what limitations are placed on holding that particular license. While some license types allow the same business entity to have another license type as well, others do not. Also, a medical cannabis business may not hold any more than two permitted license types at one time, unless otherwise explicitly (and rarely) permitted.

Finally, the MMRSA prohibits partial ownership or financial interests in any entity beyond those expressly stated below. This means that, if you have a license that prohibits any other licenses, or if you have two licenses that are simultaneously permitted, you may not have investments or any other financial connections with any state-licensed cannabis business, etc.

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Type 1: Specialty Small Cultivation

  • Type 1: Outdoor
  • Type 1A: Indoor
  • Type 1B: Mixed-light

Limitations on Type 1 Licenses:

  1. May only also hold either a Type 6 (Manufacturer 1) or Type 7 (Manufacturer 2) license; or
  2. May hold a Type 10A (Dispensary with No More Than Three Retail Stores) license.

Type 2: Small Cultivation

  • Type 2: Outdoor
  • Type 2A: Indoor
  • Type 2B: Mixed-light

Limitations:

  1. May only also hold either a Type 6 (Manufacturer 1) or Type 7 (Manufacturer 2) license; or
  2. May hold a Type 10A (Dispensary with No More Than Three Retail Stores) license.

Type 3: Medium Cultivation

  • Type 3: Outdoor
  • Type 3A: Indoor
  • Type 3B: Mixed-light

Type 10A (Dispensary with No More Than Three Retail Stores) licensees may apply for any Type 3 license, subject to certain restrictions (listed in 10A limitations).

Note: Type 1-3 Cultivation licenses are solely for any activity involving the planting, growing, harvesting, drying, curing, grading, or trimming of cannabis.

Type 4: Nursery Cultivation

This is a license only to produce clones, immature plants, seeds, and other agriculture products, which must be used specifically for the planting, propagation, and cultivation of medical cannabis.

Type 10A (Dispensary with No More Than Three Retail Stores) licensees may apply for a Type 4 license, subject to certain restrictions (listed in 10A limitations).

Type 6: Manufacturer 1 (Nonvolatile Solvents)

This is a license solely for conducting the production, preparation, propagation, or compounding of manufactured medical cannabis or medical cannabis products, either directly, indirectly, by extraction methods, or independently by means of chemical synthesis or a combination of extraction and chemical synthesis at a fixed location that packages or repackages medical cannabis or products or labels or relabels its containers.

Limitations:

  1. May also hold one of either a Specialty Small Cultivation or a Small Cultivation license (Type 1, Type 1A, Type 1B, Type 2, Type 2A, Type 2B); or
  2. May also hold a Type 10A (Dispensary with No More Than Three Retail Sites) license.

Type 7: Manufacturer 2 (Volatile Solvents)

This is a license solely for conducting the production, preparation, propagation, or compounding of manufactured medical cannabis or medical cannabis products, either directly, indirectly, by extraction methods, or independently by means of chemical synthesis or a combination of extraction and chemical synthesis at a fixed location that packages or repackages medical cannabis or products or labels or relabels its containers.

Limitations:

  1. May also hold one of either a Specialty Small Cultivation or a Small Cultivation license (Type 1, Type 1A, Type 1B, Type 2, Type 2A, Type 2B); or
  2. May also hold a Type 10A (Dispensary with No More Than Three Retail Sites) license.

Type 8: Testing Laboratory

This license is solely for a facility, entity, or site in the state that offers or performs tests on medical cannabis or medical cannabis products and is both:

  1. Accredited by an accrediting body that is independent from all other persons involved in the medical cannabis industry in the state, and
  2. Registered with the State Department of Public Health.

Limitations: May not hold any other state licenses.

Type 10: Dispensary

Dispensaries are facilities where medical cannabis, medical cannabis products, or devices for the use of medical cannabis products are offered, either individually or in any combination, for retail sale, including an establishment that delivers, pursuant to express authorization by local ordinance, medical cannabis and medical cannabis products as part of a retail sale. There are two categories:

Type 10: Dispensary, General

Limitations: May not hold any other state licenses.

Type 10A: Dispensary with no more than three retail sites

Limitations:

  1. May also hold a Type 6 or 7 (Manufacturing 1 & 2) license, or a combination thereof; or
  2. May apply for Specialty Small Cultivation and/or Small Cultivation licenses (Type 1, 1A, 1B, 2, 2A, 2B), or a combination thereof.
  3. Prior to January 1, 2026, Type 10A licenses may:
    1. Apply for a Type 6 or 7 (Manufacturing 1 & 2) like and
    2. Hold a Cultivation (Types 1, 1A, 1B, 2, 2A, 2B, 3, 3A, 3B) or Nursery (Type 4) license, or a combination thereof,
    3. If under the cultivation or nursery license no more than four acres of total canopy size of cultivation by the licensee is occurring throughout the state while the licenses are valid.

Type 11: Distribution

This is a license to engage in the business of purchasing medical cannabis from a licensed cultivator, or medical cannabis products from a licensed manufacturer, for sale to a licensed dispensary.

Limitations: Must apply for a Type 12 (Transporter) license, but may not apply for any other license.

Note: This license does NOT authorize retail sales. For retail sales, a Type 10 or Type 10A Dispensary License is required, above.

Type 12: Transporter

This is a license solely for the transfer of medical cannabis or medical cannabis products from the permitted business location of one licensee to the permitted business location of another, for the purposes of conducting commercial cannabis activity.

Limitations: May apply for a Type 11 (Distribution) license.

Note: Delivery of marijuana or marijuana products as part of a retail sale is not authorized by this license. It is authorized by either a Type 10 or Type 10A Dispensary License, above.

Important Additional Information on Certain Licenses

Type 6: Manufacturer 1

This license is for manufacturing sites that produce medical cannabis products using nonvolatile solvents. This license type is regulated by the State Department of Public Health.

Type 7: Manufacturer 2

This license is for manufacturing sites that produce medical cannabis products using volatile solvents. This license type is regulated by the State Department of Public Health, and the number of licenses allotted are limited by that department as well.

Type 8: Testing

Testing licenses must have their facilities licensed according to regulations set forth by the State Department of Public Health. Testing licensees cannot hold a license in another license category, and they cannot own or have ownership interest in any licensed medical cannabis or cannabis product facility. In fact, it is required by law that the facility be independent from all other people and entities involved in the medical cannabis industry.

Testing Facility Protocol

  1. The testing laboratory must adopt a standard operating procedure, which must use methods consistent with general requirements for the competence of testing and calibration activities. This includes sampling.

· The laboratory must use standard methods established by the International Organization for Standardization (specifically ISO/IEC 17020 and ISO/IEC 17025) to test medical cannabis products approved by an accrediting body.

  1. An agent must obtain samples according to a statistically valid sampling method for each lot.
  2. Samples must be analyzed in accordance with one of two ways:
  3. The most current version of the cannabis inflorescence monograph published by the American Herbal Pharmacopoeia; or
  4. Scientifically valid methodology that is demonstrably equal or superior to the American Herbal Pharmacopoeia, in the opinion of the accrediting body.
  5. If a test result falls outside of the authorized specifications, the testing facility must follow an established standard operating procedure to confirm or refute the original result.
  6. Once analysis is complete, the testing lab must destroy the remains of the sample of medical cannabis or medical cannabis product.

In addition, testing facilities face a number of other restrictions and requirements regarding operation and reporting under the new laws.

Type 10: Dispensaries

While there are two types of licenses for dispensaries - Type 10 is the general license, and Type 10A is for dispensaries with a maximum of three licensed facilities - many of their requirements are the same. For example, both may deliver cannabis and products to qualifying patients or caregivers, provided the standards for delivery are met.

Both dispensary licenses also must implement sufficient security measures that deter and prevent unauthorized entrance into areas containing medical cannabis or products, and both must ensure against theft of the cannabis and products. Mandatory measures for dispensaries regarding these measures include:

  1. Preventing individuals from remaining on the premises if they are not engaging in activity expressly related to the operations of the dispensary.
  2. Establishing limited access areas accessible only to authorized dispensary personnel.
  3. Storing all finished medical cannabis and products in a secured and locked room, safe, or vault, and in a manner that prevents diversion, theft, and loss. The exception to this is for limited amounts of cannabis that are used for display purposes, samples, or immediate sale.

In addition, dispensaries must notify both the licensing authority and law enforcement within 24 hours after discovering any of the following:

  1. Significant discrepancies discovered during inventory.
  2. Diversion, theft, loss, or any criminal activity involving the dispensary, one of its agents, or one of its employees.
  3. The loss or unauthorized alteration of records related to cannabis, registered qualifying patients, primary caregivers, or dispensary employees or agents.
  4. Any other breach of security.

Type 11: Distribution

This license is for the distribution of medical cannabis and products from the manufacturer to the dispensary. In addition to this license, distributors must hold a Transporter License (Type 12, below) and register each location where distribution product is stored. A distribution licensee cannot hold or have an ownership interest (aside from a security interest, lien, or property encumbrance) in cultivation, manufacturing, dispensing, or testing facilities. Finally, this license requires that the licensee be bonded and insured at a designated minimum level.

Type 12: Transporter

This license is for the transportation of medical cannabis and products between licensees. It does not include deliveries to qualified patients from a dispensary. This license requires that the licensee be bonded and insured at a designated minimum level. Furthermore, the Bureau will establish minimum security requirements for commercial transportation licenses.

Medical Marijuana Deliveries under MMRSA

Under the MMSRA, dispensaries may deliver medical cannabis and/or medical cannabis products to patients. However, deliveries can only be made by a dispensary, and they must be in a city or county (or both) that does not explicitly prohibit it. Counties may impose a tax on each delivery transaction completed by a licensee. However, even in areas where dispensary deliveries are prohibited, local jurisdictions may not prevent medical cannabis or cannabis product delivery drivers from using its public roads.

While delivering medical cannabis or medical cannabis products, dispensary delivery employees must carry three forms of documentation: (1) a current license that authorizes the delivery services, (2) government-issued identification, and (3) a physical copy of the delivery request, which must comply with state and federal laws regarding the protection of confidential medical information. If requested, these documents must be presented to local law enforcement, employees of regulatory authorities, or any other state/local agencies involved with enforcement.

The qualified medical patient or caregiver receiving the delivery must also maintain a copy of the delivery request. Similarly, it must be presented if requested by law enforcement officers or licensing authority.

Labeling Requirements under MMRSA

All medical cannabis products must be labeled in a tamper-evident package prior to delivery or sale at a dispensary. Furthermore, all packaging and labels must not be made to be attractive to children, and only generic food names may be used to describe edible medical cannabis products.

As of January 1, 2016, all cannabis products must have labels that include the following information, which must be prominently displayed on the packaging and in a clear, legible font:

  1. Manufacture Date
  2. Manufacture Source
  3. The following statement, in bold print:

· KEEP OUT OF REACH OF CHILDREN AND ANIMALS

  1. All of the following four (4) statements:

· SCHEDULE 1 CONTROLLED SUBSTANCE

· FOR MEDICAL USE ONLY

· THE INTOXICATING EFFECTS OF THIS PRODUCT MAY BE DELAYED BY UP TO TWO HOURS

· THIS PRODUCT MAY IMPAIR THE ABILITY TO DRIVE OR OPERATE MACHINERY, PLEASE USE EXTREME CAUTION

  1. For packages that contain only dried flower, the net weight of medical cannabis in the package.
  2. A warning if nuts or other allergens are used.
  3. A list of all pharmacologically active ingredients, including, but not limited to:

Tetrahydrocannabinol (THC)

Cannabidiol (CBD)

Other cannaboid content

THC and other cannabinoid amount in milligrams per serving

Servings per package

THC and other cannabinoid amount in milligrams for the package total

  1. Clear indication, in bold type, that the package contains cannabis.
  2. Identification of the source, date of cultivation, and manufacture.
  3. Any other requirement set by the bureau.
  4. Information associated with the unique ID (issued by Department of Food and Agriculture)

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