Newsflash: this month, the California Department of Public Health (CDPH) proposed new emergency regulations that would allow cannabis manufacturers to share facilities. These regulations are going to be filed on April 3, 2018, with an ensuing five-day public comment period until April 8, 2018.
These regulations intend to offer ways for small manufacturing businesses to enter the cannabis market at a lower start-up cost. Here’s what you need to know about the proposed regulations.
How do I get a Type S License?
Here is a quick overview of what you need to apply for your Type S License.
- A non-refundable application fee of $500 for each new application
- The location of a registered shared-use facility to be used by the licensee
- A copy of the use agreement signed by the primary licensee and the applicant
- A diagram of the designated area of operation that includes where the applicant will store cannabis, cannabis concentrates, and cannabis products
To get a Type S license, an applicant must fall into the Tier I or Tier II fee categories:
- Tier 1: annual gross revenue of up to $100,000
- Tier 2: annual gross revenue of $100,001 to $500,000
Lastly, “cannabis manufacturing” means that a licensee can participate in the following activities:
- Cannabis infusions
- Packaging and labeling of cannabis products
- Extractions of butter or food-grade oils, as long as the extraction is then used solely for an infused product and not sold to any other licensee.
The application will be available on the CDPH website after the public review period has closed.
How do I register a shared-use facility?
If you are a cannabis manufacturer with a Type 7, Type 6, or N license, you can register your location for shared-use. As part of the approval process, you must apply for a Type S license. This is similar in structure to a commercial kitchen or coworking space in that it allows companies to share space and equipment. Note that the location where the cannabis shared-use license is held may only be used for cannabis-specific manufacturing activities.
To register as a shared-use facility, you must submit the following information:
- Form DPH-9037 (to be made available 4/13)
- A copy of your Type S license or permit.
- The license number and address of the shared-use facility
- The operating days and hours for your manufacturing business which the applicant will conduct manufacturing operations.
Why should I be interested in a shared-use facility?
The emergency regulations aim to provide equity among cannabis manufacturing companies who have limited access to the cannabis market. Many local regulations and zoning restrictions prevent cannabis manufacturers from operating in accessible neighborhoods. Likewise, the cost of opening and operating a manufacturing plant can disqualify new businesses from getting off the ground due to exorbitant costs. The state intends to ease that burden while providing a new source of revenue for existing operations who wish to share their space.
To review the details of the proposed regulations and a fact sheet with instructions for submitting public comment, visit the CDPH website and speak with one of our professionals about the process for sharing your manufacturing operation