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California opens online system to license new pot shops

An employee lines up cannabis products at Essence Vegas Cannabis Dispensary after the start of recreational marijuana sales began on July 1, 2017 in Las Vegas, Nevada.
An employee lines up cannabis products at Essence Vegas Cannabis Dispensary after the start of recreational marijuana sales began on July 1, 2017 in Las Vegas, Nevada.
Ethan Miller/Getty Images

California on Friday began accepting applications from businesses that want to operate in the state's legal marijuana industry next year, a milestone for the emerging market.

After months in development, an online system launched and will allow retailers, distributors and testing labs to seek state licenses, which are required to conduct business.

Recreational pot sales kick off in California on Jan. 1, joining the long-running medical cannabis industry.

"Now that applications are coming in, we can officially move one step closer to issuing California's first state licenses for commercial cannabis activity," Lori Ajax, who heads the state Bureau of Cannabis Control, said in a statement.

When issued, the temporary licenses will not be effective until Jan. 1, and businesses need a local permit before applying for state licenses.

Along with a valid local permit, those who apply will need to disclose owners in the business, its location, provide a diagram of the establishment and produce documents that show a cannabis business can be operated at the site.

The state and cities have been hustling to establish rules to govern the projected $7 billion industry that range from where plants can be grown to determining the location of pot businesses.

The Los Angeles City Council this week endorsed regulations under which residential neighborhoods would be largely off-limits to pot businesses, and buffer zones would be set up around schools, libraries and parks.

In a state with a vast illegal pot market, it has been a long-running question how many businesses will come forward to seek licenses for the new legal market.

The state projects it will collect $1 billion in new taxes from pot sales and other activity within several years.

California is among 29 states where pot is legal, either for medical or recreational use.