Currently California’s Bureau of Cannabis Control has issued 267 active microbusiness licenses. In order to hold a California microbusiness license, a licensee must engage in at least three of the following cannabis business activities:   Retailer, Retailer Non-Storefront, Cultivation (less than 10,000 sq. ft.), Distributor, Distributor Transport Only, Manufacturer (Level 1, Type 6). These have been planned in a number of states as a way to encourage craft cannabis and to ensure that small businesses can participate in the industry.

Key Findings

  • The premises cities most often cited mirror the large population centers in California. Oakland has 46, Los Angeles 33, and San Francisco 11.
  • Distribution was the most popular activity chosen by microbusinesses and can be found in 97% of the licenses.
  • Manufacturing was part of 91% of the licenses while cultivation rounded out the top 3 with 69%.
  • 71% chose three activities to pursue out of a possible six.

Choices

The graph below shows what the number and the percentage of microbusinesses that selected that activity.

California Microbusiness Activities

And when offered such a plethora of choices, here’s how many activities the license holders chose:

How Many Activities Do Microbusinesses Choose To Do?

Some popular combinations included Cultivation, Manufacturing and Distribution which was the choice for 115 license holders and Cultivation, Manufacturing, Distribution and Retail which was chosen by 44 of the license holders.

Cultivation

Of the 185 that chose cultivation – data was provided by some as to the type of lighting they selected. The list is not mutually exclusive. The tally looks like this:

  • Indoor – 57 licenses
  • Nursery – 17 licenses
  • Mixed – 3 licenses
  • Outdoor – 2 licenses

Thirteen licenses that chose cultivation as an activity would use more than one lighting type.

Distribution

97% of microbusinesses have chosen Distributor as one of their activities. Based on the BCC’s recently updated instructions distribution licenses give these owners important control throughout the seed-to-sale process:

  • Distributor: Purchases, sells, arranges for testing, conducts quality assurance review of packaging and labeling, and transports cannabis goods between licensees.
  • Distributor – Transport Only: Transports cannabis goods between licensees. May not transport cannabis goods to a licensed retailer and may not engage in any other distributor activities

Oddly there were a few cases where Distributor and Distributor-Tranport Only were selected.

Retail

This was chosen for 91 of the licenses and oddly was paired with Retailer Non-Storefront six times.

Why does this matter?

Microbusinesses were created as a way to give small operators a chance to succeed in the cannabis economy. They were creatively constructed to give entrepreneurs choice with a build-your-own type approach. California is not the only jurisdiction to permit these – they are currently cropping up in Michigan and will be available in Illinois and Massachusetts.

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