California Marijuana Testing License

Does California Require Testing for Marijuana and Marijuana Products?

Yes. California requires cannabis testing laboratories to verify that the products are safe for human consumption and to provide information on the potency of the products being sold to consumers.

Cannabis has several medicinal benefits and considering that all medicinal products provide information about their potency and dosage, cannabis products are being required to meet the same standard. Regulations are being developed by international organizations for the adoption of standards and acceptable limits of specific compounds found in cannabis to ensure cannabis products do not compromise a person's immune system.

Also, the cannabis plant has a sponge-like behavior during cultivation, absorbing nutrients and components from the soil including heavy metals in the soil, pesticides, fungicides, and the plant growth regulators used. Residual solvents from these chemicals create potentially dangerous safety issues for cannabis consumers. Therefore, it is crucial that cannabis products are tested to avoid the contamination that may occur through the long journey from seed to plant processing before finally ending up as a packaged product on retail shelves.

The Department of Cannabis Control (DCC) mandates testing of all batches of cannabis products prior to their sale. Testing laboratories inspect cannabis products to ensure they are:

• Contamination-free
• Accurately labeled with cannabinoids and terpenes

Cannabis products in California must be tested for over 100 contaminants. Among these contaminants are 66 pesticides, 21 of which the state has zero tolerance for. According to the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA), licensed cannabis testing laboratories must test cannabis goods for:

• Cannabinoids and terpenes
• Residual solvents and processing chemicals
• Residual pesticides
• Heavy metals
• Microbial impurities
• Mycotoxins
• Moisture content and water activity
• Foreign material

The DCC requires the batches of cannabis goods that fail testing to be destroyed by the distributor or remediated by a manufacturer. Remediation removes contaminants from a cannabis product. Only manufacturers are permitted to remediate cannabis products; however, the DCC must approve the remediation plan in advance. Remediated cannabis products may only be sold after they have been re-tested following remediation.

Does California License Independent Marijuana Testing Facilities?

Yes. In California, cannabis testing laboratories are required to be independent and third-party owned. Independent, licensed testing laboratories are responsible for collecting samples from licensed distributors for testing. The labs then perform a comprehensive set of analyses in accordance with the MAUCRSA and regulatory requirements. Laboratories must provide distributors with certificates of analysis detailing the findings of each analytical test (pass or fail). Before a batch can be issued to retailers, it must pass all necessary testing.

As of October 2019, only 27 licensed cannabis testing laboratories served the whole of California.

What Accreditations Do Marijuana Testing Facilities Need in California?

Per the DCC rules, testing laboratories must:

• Be ISO accredited
• Use standard operating procedures
• Develop a laboratory quality assurance program
• Participate in a proficiency testing program

To be approved by the ISO, cannabis testing laboratories must obtain and maintain ISO/IEC 17025 accreditation. ISO/IEC 17025 is a quality management system and a standard for evaluating technical competence in laboratory testing and calibration services. It applies to companies that produce testing and calibration results. ISO (International Organization for Standardization) is a not-for-profit organization of more than 160 national standards bodies.

Through the efforts of ISO members, the organization brings together experts to exchange knowledge and develop voluntary, consensus-based, market-relevant international standards that promote innovation and solve global problems. Over 100,000 laboratories worldwide depend on the ISO/IEC 17025 standard as their main source of laboratory certification, according to ISO.

ISO/IEC 17025 certification certifies that a laboratory follows a sound quality management system and can deliver testing and calibration results. Accredited labs perform tests in line with internationally recognized standards (ISO/IEC 17025), and the findings are approved by a wide variety of governmental and regulatory bodies. The agreement between accrediting organizations mandates accredited members' test results to meet the same minimum quality standards independently of the accreditation body, and that calibration results will be treated as if performed by the accredited member.

In order to obtain ISO/IEC 17025 accreditation, a laboratory's quality management system and technical capability will be assessed by an appropriate "third-party" accrediting body. Audits will also be conducted regularly to verify that the accreditation is maintained. Only a recognized accrediting body may provide an ISO/IEC 17025 accreditation.

Some of the factors taken into consideration before an ISO/IEC 17025 accreditation is issued are:

• The staff's credentials, training, and experience
• Adequate quality assurance procedures
• Sampling techniques
• Testing procedures
• Test validation methods
• Traceability of measurements to national standards
• Procedures for accurate recording and reporting
• Testing facilities

Following the latest update to the ISO/IEC 17025 standards in 2017, there are now five standard requirements for an ISO/IEC 17025 accreditation.

How to Get a Marijuana Testing Laboratory License in California

Before submitting your application for a cannabis testing laboratory license to the Department of Cannabis Control, it is recommended that you are familiar with any local regulations in place in the municipality where you plan to set up your laboratory. For instance, several California municipalities have enacted ordinances to support applicants who have been negatively impacted by the War on Drugs. These ordinances provide lesser barriers to entering the cannabis industry by offering to qualifying applicants:

• Quicker application processes
• Help with operating their cannabis business after licensure
• Direct financial aid

Some approved municipality ordinances in California include:

• County of Humboldt
• City of Coachella
• City of Rio Dell
• City of Long Beach
• City of Los Angeles
• City of Oakland
• City of Sacramento
• City and County of San Francisco
• City of San Jose

To submit your application online, visit the DCC licensing system and create an account by providing a username and password and setting up a security question and answer. To proceed, choose the cannabis testing laboratory license when beginning the application. The following information and documents will be required:

• Business organizational structure: Applicants must identify their business's organizational structure.

• Business contact information: The applicant's first and last names are required. If the applicant is a commercial entity, the applicant must provide the full legal business name in the application. The applicant's business name must be identical to the business name specified on the company registration documents submitted to the DCC. The application must provide the physical address of the premises, as well as the postal address if it is different from the physical address. Additionally, the website address, email address, and phone number of the company must be provided.

• Social Security number, Individual taxpayer identification number, federal employer identification number: Before an application may be accepted, the applicant must submit a valid Social Security number, individual taxpayer identification number (ITIN), or Federal Employer Identification Number (FEIN).

• Primary contact person: The applicant must include the primary contact's name, title, telephone number, and email address. The DCC licensing team will discuss the application solely with this individual and a company owner mentioned on the application. The primary contact is the individual designated as the point of contact for licensing authorities seeking information about the company.

• Labor Peace Agreement: This is applicable to businesses having a payroll of at least twenty workers. This document must include a copy of the page of the labor peace agreement that bears the union representative's and applicant's signatures.

  If the applicant does not have at least 20 non-supervisory workers, a notarized declaration stating that the applicant will enter into and adhere to a labor peace agreement within 60 days of employing its 20th non-supervisory employee must be provided.

• Limited waiver of sovereign immunity: A limited waiver documentation is required if an applicant is a federally recognized tribe or other sovereign entity. The written waiver must contain an assurance that they will comply with all applicable state laws, rules, and regulations regulating commercial cannabis operations. The applicant must establish legal authority to enter into the waiver, and the waiver must be signed and dated by the authorized person.

• Premises location: An applicant is required to attest that the proposed cannabis business premises is not located within 600 feet of a kindergartern school, daycare center, or youth center in existence at the time the license is issued or must provide evidence that the local jurisdiction has approved a different radius.

• California Environmental Quality Act Compliance: An applicant must submit proof of compliance with the California Environmental Quality Act, or an Exemption Form (CEQA). The proof must fall into one of the following categories:

  • A copy of the applicant's license or other authorization issued by the local jurisdiction, if the jurisdiction has established an ordinance, rule, or regulation in accordance with Business and Professions Code (BPC) Section 26055(h) requiring discretionary review and approval of permits, licenses, or other authorizations to engage in commercial cannabis activity.
  • Certified copies of the Notice of Determination or Notice of Exemption, as well as the CEQA documentation. If the applicant does not want to submit a copy of the license, permit, or other permission granted by the local authority, the applicant may offer one.
  • If an applicant lacks the evidence specified above, or if the local jurisdiction did not create a CEQA document, the applicant is responsible for producing an environmental document that conforms with CEQA and that the Bureau may accept or certify, unless the Bureau says otherwise.

• Seller's Permit: A seller's permit number issued by the California Department of Tax and Fee Administration (CDTFA) is a required documentation. If the applicant has not yet received a seller’s permit, an attestation that the applicant has applied must be provided.

• State Employment Identification Number (SEIN): For applicants with more than one employee, the applicant's SEIN as issued by the California Employment Development Department is required.

• Cal-OSHA: If the applicant has more than one employee, this document must certify that the applicant employs, or will employ, two persons (one supervisor and one employee) who have successfully completed a Cal-OSHA 30-hour general industry outreach course provided by a training provider approved by an OSHA Training Institute Education Center.

• ISO/IEC 17025 accreditation: Applicants must provide evidence that they are presently accredited by the International Organization for Standardization (ISO)/International Electrotechnical Commission (IEC) or are in the process of acquiring certification.

  Note that testing laboratories may be issued provisional licenses prior to obtaining ISO/IEC 17025 accreditation provided that the applicants present the Standard Operating Procedures (SOPs) required above.

• List of owners: Each owner must complete an Owner Submission form and submit fingerprint images electronically to the Department of Justice (DOJ). The applicant must complete the Department of Cannabis Control's live scan form. Live scan locations are available on the California Office of Attorney General's website. The DCC defines as owner as:

  • An individual having a combined ownership stake of at least 20%.
  • The chief executive officer of a non-profit organization or other corporation.
  • A member of a nonprofit organization's board of directors.
  • The trustee(s) and any individuals who exercise control over the trust and/or commercial cannabis enterprise owned by the trust.
  • A person who is entitled to at least 20% of the earnings from the commercial cannabis business.
  • A person who will be involved in the control, or management of the license applicant. This may involve the following:
    • A general partnership formed for the purpose of doing commercial cannabis business.
    • A non-member, managing member,or manager of a limited liability corporation established for the purpose of doing commercial cannabis operations.
    • A corporate officer or director of a commercial cannabis business.

• Entity Ownership: Trusts, businesses, or organizations that have financial interests in an applicant who may or may not qualify as owners, are considered entity owners.

  If an entity is an owner in the cannabis microbusiness: all entities and individuals with a financial interest in the entity must be disclosed to the DCC and may be considered owners of the commercial cannabis microbusiness.

  This covers all entities in a multi-tiered corporate structure, chief executive officer, members of the board of directors, partners, trustees, and all individuals who have authority over a trust, as well as managing members or non-member managers of the entity. Each entity identified as having a financial interest is required to reveal the names of people who also have financial interests, until only individuals remain.

  If an entity has a financial interest: all individuals who are owners of that entity must be considered financial interest holders of the business. This includes all entities in a multi-tiered corporate structure, chief executive officer, members of the board of directors, partners, trustees, and all other individuals who exercise authority over a trust, as well as managing members of non-member managers of the entity.

  Each entity identified as having a financial interest is required to reveal the names of people who also have financial interests, until only individuals remain

• Non-owners with financial interests in the business: Non-owners include all people who have financial interests in an application company but do not meet the DCC's definition of an owner. Except as provided in the DCC regulations Section 15004, financial interest means an agreement to receive a share of the profits of a commercial cannabis business, an investment or loan provided in a commercial cannabis business, or any other equity interest in a commercial business

  Individuals that have entered into an agreement to receive a share of the earnings include, but are not limited to, the following:

  • An employee who has agreed to participate in a profit-sharing arrangement with a commercial cannabis business.
  • A landlord who has agreed to share earnings with a commercial cannabis business in exchange for a lease.
  • A consultant who provides services to a commercial marijuana business in exchange for a percentage of the earnings.
  • A person working as an agent for the commercial cannabis business, such as an accountant or attorney, in exchange for a percentage of the earnings.
  • A broker who engages in commercial cannabis business operations in exchange for a cut of the earnings.
  • A commission-based salesman

• Fictitious business names: Applicants are required to provide the lists of all fictitious business names they will operate under and the addresses of the businesses.

• Licensing application fee: The applicant is required to make payment for the license application fee of $1,000.

• Evidence of legal right to occupy the proposed business premises: If the applicant owns the property, a copy of the title or deed must be submitted. If the applicant does not own the property, the applicant must submit a statement from the property owner certifying that the applicant has the legal right to occupy the property for the purpose of conducting commercial cannabis operations, as well as a copy of the applicant's rental agreement.

• Premises diagram: An applicant must provide a diagram of the proposed premises, which must be drawn to scale and clearly identify the:

  • Boundaries of the property. If just a part of the land is utilized for cannabis business purposes, the applicant must identify the other portions and specify their use.

  • If the premises are situated on a part of the land that also contains a home, the diagram must clearly indicate the distinction between the premises and the house.

  • Dimensions of all rooms and the premises.

  • Entrances, exits, and walls under the exclusive control of the applicant as well as designated entrances and exits for each additional premises. The diagram must also show all common or shared areas of the property; lobbies, hallways, bathrooms, and break rooms.

  • Partitions, windows, and doors on the inside.

  • The cannabis activity that will take place in each section of the property must be described. Commercial cannabis activities that must be shown on the diagram include, but are not limited to, the following: storage, batch sampling, shipment loading/unloading, packing and labeling, client sales, delivery loading, extractions, infusions, growing, and/or processing.

  • Areas with restricted access. Defined as locations that are used to store or hold cannabis products that are exclusively accessible to a licensee, its employees, and contractors.

  • The location and number of each camera

• Business formation documents: Applicants must submit a copy of all business formation documents, depending on the kind of formation. For a business held in trust, the applicant must provide a copy of the trust. For other business structures, the required documentations are:

  • Trusts: Certificate of Trust authorizing the Trustee to act as Trustee.
  • General Partnership: Statement of Partnership Authority,
  • Partnership Agreement, and Tax Forms.
  • Limited Partnership: Certificates of Limited Partnership, Operating Agreements, Partnership Agreements, and tax forms.
  • Corporation: Articles of Incorporation, Information Statement, Stock Certificate, Stock Ledger, Organizational Charts, Bylaws, and Board of Directors List.
  • Limited Liability Company: Statement of Information, Articles of Organization, and Operating Agreements.
  • Foreign Corporation or Foreign Limited Liability Company: California Secretary of State-issued Certificate of Qualification, Statement and Designation by Foreign Professional Corporation, Certificate of Registration, or Certificate of Status.
  • Sole Proprietor: Filing of a Fictitious Business Name form with the local business permit agency, as well as tax documents. The paperwork must support the kind of company structure, the legal business name, and the ownership percentages of the owners.

• Financial information form: Applicants must provide a list of all investments, loans, funds, and gifts associated with the cannabis business.

• Surety Bond: A $5,000 surety bond payable to the State of California is required of the applicant. The surety bond is intended to pay the cost of destroying cannabis and cannabis-related products in the event of a breach of the license requirements.

• Operating procedures:

  • Transportation Procedures: Describes the applicant's proposed method for transporting cannabis safely. If applicants do not intend to transport cannabis themselves, they must indicate that they intend to contract for transportation.
  • Inventory Procedures: Outlines how the applicant will receive cannabis shipments, store its inventory, do inventory reconciliation, verify inventory records are correct and keep inventory records.
  • Security Procedures: Describes the applicant's proposed method of providing access to the property. Additionally, it details the applicant's video surveillance system, which includes camera location and equipment maintenance. These procedures outline the applicant's security measures for all entry points, including the employment of security staff and a description of the applicant's alarm system.

• Additional Documents:

  • Testing Methods - Standard Operating Procedures (SOPs): Procedures for the following testing methods are required: Cannabinoids, microbial impurities, mycotoxins, foreign material, moisture content and water activity, residual pesticides, heavy metals, residual solvents and processing chemicals, terpenoids (if tested) and homogeneity (if tested).
  • Sample Preparation - Standard Operating Procedures (SOPs): Procedures for the sample preparation of cannabis and cannabis products
  • Sampling - Standard Operating Procedures: Procedures for the sampling of cannabis and cannabis products.

The DCC licensing system enables you to save your application progress throughout the online application process, eliminating the need for the applicant to complete the process in one sitting. Once your application is complete, you will be required to sign and submit it.

Your application will not be processed until you have paid the application fee. If any part of your application is missing or incomplete, you will be notified by email by the DCC licensing team. You must provide the missing information within the timeline provided in the mail. Adhering to the timeline provided in the mail will ensure that your application is processed on time by the DCC.

The DCC will not process an incomplete application. If an applicant fails to provide the required information within the specified period, the application is considered to have been abandoned. In such instances, the application fees are also non-refundable. Applicants who have abandoned an application may reapply at a later date; however, a new application and fee will be needed.

Following the approval of your application, the DCC will send you an email with information on how to make payment for the licensing fee. Payment is accepted in the form of a check, money order, or credit card. Payments in cash may also be done in person at the DCC office by scheduling an appointment. Cash payments are not accepted without a prior appointment for security reasons. After you have paid the licensing cost, your license will be approved.

If the fee is paid with a debit or credit card, the payment will be processed via the DCC's online licensing system, and the applicant will be responsible for any processing or convenience costs incurred by the third-party vendor processing the payment on behalf of the DCC.

California regards nonpayment of the required license fee to be an offense. If it is found that the licensee paid less than the proper licensing price, the licensee will be required to pay the remaining charge in addition to a penalty equal to 50% of the applicable licensing cost; however, the DCC has the right to waive the penalty fee.

If the DCC rejects an application, the applicant will be informed in writing of the denial and allowed to contest the decision at a hearing. Within 30 calendar days after the date of mailing the notice of denial, the applicant may seek a hearing by filing a written petition to the DCC. If the applicant does not seek a hearing within 30 days, the applicant's entitlement to a hearing is presumed waived.

You may rescind an application at any time prior to the DCC issuing or rejecting the license application. To withdraw an application, the applicant must contact the DCC using a dated and signed letter. The DCC will not refund application fees for withdrawn applications. A license as a cannabis testing laboratory is valid for one year. Once your license application has been approved, the licensing system will provide you with a link to download your license certificate.

If applicants prefer to complete their applications in person, they may complete the Annual Cannabis Testing Laboratory License Application form and submit it along with the required documents to:

Department of Cannabis Control

P.O. Box 942872

Sacramento, CA 94271-2872

How Much Does a Marijuana Testing Laboratory License Cost in California?

California law mandates that cannabis licensing fees cover the DCC's expenses associated with industry supervision and are tiered such that larger businesses pay more. The application and licensing costs are determined by economists who conducted a study of the state's cannabis sector and proposed cost amounts.

Cannabis testing laboratory license fees are based on the gross annual revenues generated by the laboratories. For a new license applicant, the gross annual revenue is calculated based on the gross sales and revenue expected during the first 12 months after licensure.

License and application fees are:

Cannabis testing laboratory licenses are renewable every year. The license fee corresponding with the licensing tier category identified by a licensee based on the expected gross annual revenue over the next 12-month period will be the renewal fee.

Are there Local Regulations for Cannabis Testing Facilities in California?

Yes. Many California municipalities have ordinances and regulations restricting or guiding the operations of cannabis testing facilities in their jurisdictions. These ordinances include guidelines on air quality, odor control, chemical exposure, and ventilation requirements and standards.

Ordinances are regulations established by cities and counties to set even more specific rules for the local community. An ordinance is only effective in the city or county in which it was enacted. Contact your municipal and county governments to see if they have enacted any ordinances pertaining to cannabis testing laboratories.

Cannabis testing laboratory ordinances are available in the City of Lake Forest, City of Irvine, and City of California City. Typically, applicants must obtain permits and approvals verifying compliance with zoning provisions, building codes, and fire safety procedures.