Do you want to know if you need a license to sell CDB infused products? If YES, here are types of license you need and how to get them.
CBD (cannabidiol) is becoming increasingly popular and entrepreneurs are steadily trying to invest in this new market so they they can get a healthy chunk of the market before it becomes saturated. Anybody that is well informed in the health, wellness, dietary supplements, or holistic medicine industries can very easily start this business.
In fact, for sometime now, the growing awareness of the CBD industry made it one of the most talked about topics on social media.
While cannabis is still illegal to cultivate, sell and purchase in many US states, the story is different when it comes to CBD. In most states of the United States, the sale of CBD oil is allowable, but what about the sale of CBD infused products like food? Let’s see what the law has to say.
Do You Need a License to Sell CBD Infused Products?
It is important to note that some states and local jurisdictions are now requiring a license to sell CBD infused products, but the list is somehow sketchy. If you want to start out in this business, it is recommended that you familiarize yourself with the regulations in your state or seek legal counsel to ensure that you are 100% compliant with the law.
If you plan to purchase your product from a wholesaler and become a CBD oil products distributor, you will need to get a resale license if that is a requirement in your state. CBD is becoming increasingly popular, and adding CBD products for sale in your boutique, clinic, cafe, or practice can be an easy and profitable new income stream.
As long as you’re selling high-quality CBD products from a reputable source and your business stays compliant with any regulatory requirements for your state, you should be able to sell CBD.
What Licenses Do You Need and How Do You Get It?
Those who engage in CBD commerce face very unique challenges when investing their time and money into product development, marketing, manufacturing, and ultimately distribution.
Since so many who deal in the cannabis industry are accustomed to applying for and obtaining cannabis business licenses, some refer to the CBD market as requiring their own set of certifications. To start, you will need an FDA approval to be able to sell CBD infused products in the United States.
But when it comes to other kinds of licenses you need, you should know that what you require are mainly the right permits. Like has been said before, your needing CBD license or permit will depend on the state you reside in and also the THC percentage of your product.
If you are selling CBD oil derived from marijuana that has a THC percentage of over .3%, then yes you will need a license, provided it is in a legal state. However, if you are selling compliant hemp-derived CBD with THC percentage under .3%, then that is dependent on the state you reside in.
While there are federal guidelines, each state has its own laws and guidelines when it comes to hemp and hemp-derived products. Purchasing and possessing CBD is legal in California. Retailers do not need any special licensing to sell CBD products there. Though infusing food and beverages with CBD is illegal in California.
Basic Legal Requirements
If you are in a state that requires that you get licenses to sell your CBD infused products, these are the licenses you will be expected to start with.
Table of Content
1. Business formation
Incorporating your business or forming an LLC with the state is important because it protects your personal assets from any potential debts and liabilities that arise from your business.
2. Tax ID number
This is your federal tax identification number, also called an employer identification number (EIN). The IRS uses this number to identify your business for anything related to taxes.
3. General Business License
This license, renewed annually, allows you to legally operate in your city or county. (Note: This license does not give you the authorization to operate a cannabis business.)
4. DBA Filing
Your DBA (Doing Business As) allows you to conduct business using a name that’s different than the name included in your incorporation papers.
5. Sales Tax Permit
This is for retailers of physical or digital products or services, both online and offline. If you have to collect state and local sales taxes, you need this permit.
Different businesses need varying permits. For example, you’ll need one with the health department if your business requires food preparation. Businesses may also need permits for signage, zoning and land use.
Which Department is Responsible for Licensing?
In some states you may need to file your organizational paperwork with the Secretary of State’s office, but in many cases you will need to work with local licensing agencies. In Nevada, the Department of Taxation is responsible for licensing and regulating retail marijuana businesses and the state’s medical marijuana program.
In California, potential business owners can apply to one of these three agencies:
Bureau of Cannabis Control
This is one of the main agencies for regulating commercial cannabis licenses for medical and adult-use cannabis in California. Their licensing is specific to certain businesses, including retailers, distributors, testing labs, micro-businesses, and temporary cannabis events.
CalCannabis Cultivation Licensing
CalCannabis operates as a division of the California Department of Food and Agriculture (CDFA), and is responsible for licensing businesses that are cultivating medicinal and adult-use (recreational) cannabis. They also manage the track-and-trace system used by the state to record the movement of cannabis product through the distribution chain.
Manufactured Cannabis Safety Branch
This division of the California Department of Public Health (CDPH) regulates those in the cannabis manufacturing business. This includes anyone making and selling cannabis-infused edibles for both medical and nonmedical use.
Application For Licenses to Sell CBD Products
Department of state health services provides an online platform for the registration and licensing application for retailers and distributors for CBD products. These applications are submitted in the business and professional license category. When you apply for licenses, there is a set of documents that need to be submitted with the application.
First, you need to submit the documents online at the Department of state health services website for the license to sell CBD products. The fingerprint submission process will start. You will typically get an email from the fingerprint service code
From the email, you need to print the FBI authorization form and fill it. Then your fingerprint submission appointment is scheduled and this can also be done using the phone number as well. If you are to work from various locations in the state then you need to add them all during the registration process.