How to Incorporate a Marijuana Business
In addition to filing incorporation paperwork with the secretary of state, all marijuana retail, cultivation, research, and distribution businesses require licensing before being allowed to operate legally. Most businesses may need additional licensing to comply with mandates for the specific business activity, safety, and (unless exempt) taxation. For example businesses such as food establishments, dispensaries and hydroponic facilities require additional licensing. Requirements may also vary by the way in which business is transacted. For example if you are doing business in another state, that may require obtaining a Certificate of Authority (also called Foreign Qualification) . Failure to incorporate or obtain proper licensing for a marijuana business could leave you with penalties such as a lack of legal protection as well as criminal penalties, ranging from fines to jail time.
Currently 6 states permit the formation of recreational marijuana businesses, and are accepting license applications. Each jurisdiction has some form of regulatory board established to review, register and issue licenses for marijuana businesses. The states are Alaska, California, Colorado, Massachusetts, Nevada, and Oregon. Our cannabis incorporation package applies to these states.
How Marijuana Licensing Works
Our incorporation packages include business license research for both marijuana and other company/industry-specific licensing in one state. Using your incorporation information we perform the following:
- Research all licensing and permit requirements at every level (Federal, State, County, Local) as well as tax registrations (sales tax, use tax, withholding tax, etc.)
- Review and compile the license, permit and tax applications that are relevant to your specific business
- Send you an email with links, instructions and documentation for every application, along with contact information for each respective licensing authority
Note: You would be responsible for completing and submitting the licensing applications along with paying any fees outlined in the application instructions. Application and licensing fees are outlined and vary by state with costs averaging several thousands of dollars.
If licensing research is required for multiple cities, counties, and states the cost is $66 for each location or state.
Medical vs Recreational Marijuana
Twenty-three states and the District of Columbia have enacted laws legalizing marijuana for medical use. However, there are currently differences in the laws between medical and recreational marijuana. States are moving to consolidate both industries, but at the moment statutes on pricing, selling, buying and laws for setting up businesses in each industry are not the same in most cases. In particular the retail marijuana industry is heavily regulated and taxed at both the state and local level compared to the medical marijuana industry.
Currently 30 states and the District of Columbia are accepting license applications for medical marijuana purposes. Each jurisdiction has some form of regulatory board established to review, register and issue licenses for medical marijuana businesses. Our cannabis incorporation package applies to these states: