In our first edition of How to Start an Edibles Business, you learned all about the basic building blocks it takes to get started. But that was just the beginning. As you begin to move forward with starting an edibles business, you’ll soon realize that the complex world of DCC regulations (Department of Cannabis Control) is a whole other ballgame.
Simply put, California cannabis compliance poses quite a learning curve for aspiring cannapreneurs who have little to no experience in the industry. Unfortunately, imposing even more barriers to the market for those without the resources to successfully navigate the lengthy list of state requirements.
To help, here we’ll simplify the most important aspects of starting an edibles business legally and in compliance with California requirements specifically. So, keep reading for our second edition of our How to Start an Edibles Business series – all about California cannabis compliance.
How to Start an Edibles Business – Compliance Edition
Outside of learning how to formulate recipes and build a business plan, starting an edibles business also requires knowing how to legally operate. In cannabis, it’s not just everyday business regulations you’ll need to adhere to but also those of the DCC. To get you started, here are the five most important factors to consider when setting up your future business.
#1 – Licensing
In California, getting a license is the first step to starting an edibles business that is compliant. The state requires you to get a Type N, Type 6, or Type 7 manufacturing license if you want to make edibles in your own facility. However, California also offers a Type S license that allows you to manufacture edibles in a primary Type S licensed facility.
What’s the difference? Type S licensing has a much faster approval process and costs far less, especially when accounting for start-up location costs. But licensing isn’t the only way to legally sell edibles in compliance with DCC regulations. You can also explore white-label and private label opportunities, where your business won’t require a license but the contract cannabis manufacturing partner you choose will.
#2 – Location Matters
Speaking of location, to be fully compliant, you’ll need to understand and follow not only DCC regulations but those of local jurisdictions, too. This will require finding out the local laws and regulations of the city you plan to set up shop in.
In fact, it’s best to know this before you start scouting locations to make sure that the building you choose is properly zoned for cannabis manufacturing. This is another perk of starting an edibles business with a cannabis contract manufacturing partner or a Type S facility where the primary license holder will have already done so.
#3 – Compliance SOPs
From security to storage and everything in between, each step of the cannabis manufacturing process is highly regulated and monitored. One slip-up during an inspection or through monitoring, can put your business at risk for violations, potential fines, and even license suspension. That means you’ll need to include the requirements for California cannabis compliance in your working SOPs and stay in tune with any changes to make revisions when they arise.
Because regulations change so frequently, this often requires the help of an in-house hire (e.g. compliance manager) devoted to the task, or the hiring of outside help—two costs to consider when starting an edibles business and deciding which route is best for you.
#4 – METRC
METRC or Marijuana Enforcement Tracking Reporting and Compliance, is the universal system that’s used to track cannabis from seed to sale to prevent loss and uphold community safety. To do so, the system tracks everything from the base oils you use for infusion to the finished product, transport, and sales.
When starting an edibles business, you’ll need to become well-versed in METRC or, again, partner with a contract cannabis manufacturing partner, or Type S facility, that is.
#5 – Required testing
Speaking of safety, it’s no surprise that there are just as many requirements for the testing of cannabis edibles to ensure they’re safe to consume. To hit store shelves, DCC regulations require that all cannabis products are tested for –
- Residual solvents and processing chemicals
- Residual pesticides
- Heavy metals
- Microbial impurities
- Moisture content and water activity
The lab must also be ISO-accredited and follow the rules set by California’s cannabis compliance requirements. To further ensure compliance, both you and the lab you choose should be well-versed in how to collect samples from batches for testing to avoid any issues that could raise red flags with regulators.
#6 – Packaging and labeling
While we touched upon the basics in our first edition of the How to Start an Edibles Business series, we didn’t get into the full scope of requirements for the actual content. In addition to what you learned about the type of packaging to be used (child-resistant, resealable, etc.), you’ll also need to get a process down for what you need to include on the label. That includes over 20 different subjects like ingredients, net weight, and usage warnings, in addition to requirements like font point size and weight.
Rather than listing each one individually here, we’ve created a comprehensive guide for tracking edibles’ packaging and labeling requirements in an all-in-one checklist.
Maintaining California Cannabis Compliance – Final Tips
If there’s one last tip we can leave you with for starting an edibles business that maintains compliance, it’s this: plan to regularly audit your internal processes for the utmost success. Or, seriously consider partnering with a third-party manufacturer to ensure that success. Even though starting an edibles business can result in profitable results, doing so without risk management and as cost-effectively as possible can make success that much more difficult to achieve.
My Green Network was established to support aspiring cannapreneurs with a more seamless and successful market entry into the ever-expanding cannabis industry. So, continue learning how to start an edibles business in California by becoming more familiar with our Type-S shared-use facility or our white label and private label opportunities.