Business & Economy

California launches new online system to license the pot industry

An activist smokes a joint during a protest in Bogota, Colombia under the motto
An activist smokes a joint during a protest in Bogota, Colombia under the motto "No vamos a pagar, lo vamos a pegar" ('We are not going to pay for it, we are going to get the kick out of it"). She and others were protesting against fines for smoking marijuana on August 1, 2017.
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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 start in California on Jan. 1, joining the long-running medical cannabis industry.

A marijuana plant is displayed during the 2016 Cannabis Business Summit & Expo in Oakland.
A marijuana plant is displayed during the 2016 Cannabis Business Summit & Expo in Oakland.
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"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.

By late afternoon, state officials said the online site was functioning well and visitors appeared to be mostly familiarizing themselves with it, rather than submitting full applications.

The number of completed applications was not immediately available.

"People are creating accounts and checking out the site. Some people have started an application but may be putting in some information and finishing the rest later," bureau spokesman Alex Traverso said in an email.

Tim Blakeley, manager of Sunset Junction medical marijuana dispensary, shows marijuana plant buds on May 11, 2010 in Los Angeles, California.
Tim Blakeley, manager of Sunset Junction medical marijuana dispensary, shows marijuana plant buds on May 11, 2010 in Los Angeles, California.
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When issued, the temporary licenses will not be effective until Jan. 1, and businesses need local permits before applying for state licenses.

Along with valid local permits, those who apply will need to disclose owners in the businesses, their locations, provide diagrams of the establishments and produce documents that show how their cannabis businesses would operate at the sites.

Marijuana plants are grown at Essence Vegas' 54,000-square-foot marijuana cultivation facility on July 6, 2017 in Las Vegas, Nevada.
Marijuana plants are grown at Essence Vegas' 54,000-square-foot marijuana cultivation facility on July 6, 2017 in Las Vegas, Nevada.
Ethan Miller/Getty Images

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. 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.