Marijuana Licenses in California – Part 4: Retail and Dispensing

The Bureau of Cannabis Control is responsible for licensing retailers/dispensaries, distributors, testing laboratories, microbusinesses, and temporary cannabis events in California. The term “dispensary” isn’t used in California to identify medical cannabis dispensaries like other states might. Instead, California chooses to differentiate between the adult-use and medical markets by granting the title of “adult retailer” and “medicinal retailer” licenses.

Editor’s Note: Want to learn about cannabis microbusinesses? Check out this article on the subject.

Retailer licenses in California are further categorized by the operations the licensed business is involved in:

1. Non-Storefront Retailer (Delivery): A licensed non-storefront retailer sells and delivers cannabis or cannabis products to consumers. While the retailer must have licensed premises, those premises are not open to the public (as described by the “non-storefront” descriptor). Instead, sales are conducted exclusively via delivery.
2. Retailer (Storefront Sales): A licensed retailer sells and delivers cannabis and cannabis products to consumers through licensed premises that are open to the public. Retailer sales can also be conducted via delivery.

Excluding micro-licenses, there are 815 retail licenses in California with a slight bias towards medicinal retailer licenses (54%) over adult retailer licenses (46%) as shown in the chart below. Please be aware that this does not mean there are 815 licensed retail outlets; Some license holders have secured both adult and medicinal licenses at the same location.

Editor’s Note: The proportion of medicinal retailers to adult retailers will likely change over time, especially if you consider this information from MJ Biz Daily.

The 815 retailer licenses can also be broken down by type of activity, as shown in the chart below. 44% of all licenses were held by medicinal retailers with storefronts, 37% were held by adult retailers with storefronts, 9% were held by medicinal delivery-only retailers, and 9% were held by adult delivery-only retailers.

Keep in mind, California’s recreational marijuana market is only three months old, so all of these licenses are temporary at this point in time and are subject to change.

Nearly half of all marijuana retailer licenses (49%) are held in just three of California’s 58 counties: Los Angeles County (28%), Alameda County (11%), and San Francisco County (10%). Expanding upon that a bit, more than three out of four retailer licenses (76%) are in eight counties: Los Angeles County, Alameda County, San Francisco County, Sacramento County (9%), Riverside County (6%), Orange County (5%), San Diego County (4%), and Santa Cruz County (3%).

If we look at license concentration by city, 50% of California’s marijuana retailer licenses are in seven cities: Los Angeles (11%), San Francisco (10%), Oakland (9%), Sacramento (9%), Santa Ana (5%), San Diego (3%), and Cathedral City (2%). In total, retailer licenses can be found in 110 California cities.

The 815 retailer licenses in California are held by a total of 514 license holders. Like marijuana manufacturing licenses in California, there are no dominant license holders. 232 license holders hold only a single license and 272 license holders have two licenses. As previously mentioned, the majority of license holders with two licenses typically hold complementary licenses (adult retailer + medicinal retailer).

Only three license holders have three licenses (420 Central, Higher Level, and Stone Age Farmacy) while five have four licenses (East Bay Therapeutics, Hometown Heart, KindPeoples, Monex Place Wellness, Inc., and urbn leaf) and two have five licenses (SPARC and The Apothecarium).

It seems likely that there is little concentration in license holders simply because the difficulty involved in complying with regulations in 530+ jurisdictions across the state don’t make strategic sense in California’s current marijuana market.

Looking at the large number of retail license holders that have one license each, it’s possible that many of these license holders are legacy dispensaries that want to keep doing what they’ve been doing for years as the state’s market evolves around them.

Part 5 of the Marijuana Licenses in California series is coming soon. It will compare California’s marijuana licenses to other states. If you haven’t already subscribed to the Cannabiz Media newsletter, feel free subscribe.

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