California Cannabis License Types: A Complete Guide for Operators (2026)

The California Department of Cannabis Control (DCC) issues licenses based on the specific commercial activity your business performs. If your operation spans multiple activities, you will likely need more than one license. Every license type below requires both a valid state DCC license and a local permit from your city or county before any commercial cannabis activity can begin.

Cultivation License Types

A cultivation license is required for any business that grows and harvests cannabis in California. The license type depends on two factors: the type of production environment and lighting used, and the size of the canopy the area where mature, flowering plants are grown.

Outdoor Cultivation Licenses

Outdoor licenses are for cultivators who grow cannabis outside without using any artificial lighting on mature plants.

• Specialty Cottage Outdoor — Up to 25 mature plants or up to 2,500 square feet of canopy
• Specialty Outdoor — Up to 50 mature plants or up to 5,000 square feet of canopy
• Small Outdoor — 5,001 to 10,000 square feet of canopy
• Medium Outdoor — 10,001 square feet up to 1 acre of canopy
• Large Outdoor — More than 1 acre of total canopy

Indoor Cultivation Licenses

Indoor licenses apply to cultivators who grow cannabis in a permanent structure using at least 25 watts of artificial light per square foot.

• Specialty Cottage Indoor — Up to 500 square feet of canopy
• Specialty Indoor — 501 to 5,000 square feet of canopy
• Small Indoor — 5,001 to 10,000 square feet of canopy
• Medium Indoor — 10,001 to 22,000 square feet of canopy
• Large Indoor — More than 22,000 square feet of total canopy

Mixed-Light Cultivation Licenses

Mixed-light licenses are for cultivators who grow cannabis in a greenhouse, hoop-house, glasshouse, conservatory, hothouse, or similar structure. Two tiers apply based on artificial light levels: Tier 1 (up to 6 watts per square foot) and Tier 2 (6 to 25 watts per square foot).

• Specialty Cottage Mixed-Light (Tier 1 and 2) — Up to 2,500 square feet of canopy
• Specialty Mixed-Light (Tier 1 and 2) — 2,501 to 5,000 square feet of canopy
• Small Mixed-Light (Tier 1 and 2) — 5,001 to 10,000 square feet of canopy
• Medium Mixed-Light (Tier 1 and 2) — 10,001 to 22,000 square feet of canopy
• Large Mixed-Light — More than 22,000 square feet of total canopy

Nursery License

For cultivators that only grow clones, immature plants, seeds, or other types of cannabis used for propagation.

Processor License

For businesses that only trim, sift, cure, dry, grade, package, or label cannabis without engaging in actual cultivation.

Important: All cultivation and microbusiness licensees authorized to engage in cannabis cultivation are required to report total electricity use for each power source to the DCC upon license renewal. Starting January 1, 2023, eligible licensees may convert active and previously active cultivation licenses into a Large (Type 5, 5A, or 5B) or Medium cultivation license, and a licensee may hold more than one Medium cultivation license.

Manufacturing License Types

A manufacturing license is required to make cannabis products in California. The license type depends on the activities performed, the chemicals used during extraction or post-processing, and whether the operation runs in a shared-use facility.

Type 7: Volatile Solvent Extraction

Type 7 is for manufacturers that use volatile solvents chemicals that produce a flammable gas or vapor such as butane, heptane, hexane, or propane for cannabis extraction or post-extraction processing. Type 7 licensees may also use non-volatile solvents, mechanical methods, infusion, and handle packaging and labeling. This license carries the strictest facility and safety requirements due to the fire risk associated with volatile solvents.

Type 6: Non-Volatile Solvent or Mechanical Extraction

Type 6 manufacturers use non-volatile solvents such as ethanol, carbon dioxide, cooking oils, or butter or mechanical methods such as rosin presses and dry ice. Type 6 licensees can also infuse cannabis products and handle packaging and labeling.

Type N: Infusion Only

A Type N license is for businesses that make cannabis products exclusively through infusion mixing cannabis extract or plant material with other ingredients. Type N licensees can also package and label cannabis but cannot perform any extraction.

Type P: Packaging and Labeling Only

The Type P license authorizes businesses exclusively to package and label pre-manufactured cannabis products. Type P licensees do not produce or extract cannabis they work with finished product sourced from other licensed businesses.

Type S: Shared-Use Facility

Type S is for manufacturers who operate in shared-use facilities, where multiple licensees rotate on a schedule sharing space and equipment. Type S manufacturers may extract cannabis using butter, food-grade oils, water, glycerin, vegetable oil, animal fat, or mechanical methods, as well as infuse and package cannabis products. A Type 7, 6, or N licensee can register all or part of their premises as a shared-use facility.

Important (Effective January 1, 2026): Under AB 8, unless industrial hemp raw extract has a purity level greater than 99% and contains no THC or synthetic cannabinoids, it cannot be incorporated into food, food additives, beverages, or dietary supplements. Manufacturers working with hemp-derived ingredients must verify compliance before incorporating these materials into any product.

How California Cannabis Manufacturers Operate at Scale: LEVEL

LEVEL is a San Francisco–based cannabis manufacturer operating under California's manufacturing license framework to produce compressed cannabis tablets using pharmaceutical-grade equipment and proprietary cannabinoid formulations. Unlike most edibles manufacturers whose input tracking centers on THC distillate volume and unit output, LEVEL's production model is built around precise ratios of multiple cannabinoid isolates — CBG, CBDa, CBN, THCa, THCv, delta-8 THC, and delta-9 THC — blended per formulation to produce specific, predictable effects. Each product line carries its own Bill of Materials, and the ratios are the product. A deviation in formulation affects the consumer experience, which means ingredient-level tracking is not an operational preference but a product integrity requirement.

That manufacturing complexity creates a compliance and cost-tracking challenge that California's Metrc reporting layer alone is not built to solve. LEVEL runs Flourish as its central operating platform, using it to map detailed Bills of Materials for every formulation at exact input quantities per production run, track true per-unit production costs across its full product catalog, and sync manufacturing cost data directly into QuickBooks Online for margin analysis and financial reporting. For a manufacturer distributing through a third-party distribution partner statewide, knowing actual production costs at the SKU level is the difference between making informed pricing decisions and operating on approximation. LEVEL has run Flourish as its operational backbone since 2021, with manufacturing, inventory, compliance, and accounting consolidated into a single system rather than managed across separate tools and manual data transfers.

Distribution License Types

All cannabis goods in California must pass through a licensed distributor before reaching retail. Distributors transport cannabis between licensed facilities and arrange mandatory compliance testing before products can move to market. No cannabis product can be sold at retail without first passing through a licensed distributor who arranges compliance testing.

Type 11: Distributor

A Type 11 distributor can move cannabis and cannabis products between cultivation, manufacturing, or distribution premises; transport finished cannabis goods to retail locations; provide storage services to other licensees; and arrange for compliance testing of cannabis goods.

Type 13: Transport-Only Distributor

The Type 13 license authorizes moving cannabis and cannabis products between cultivation, manufacturing, or distribution premises only transport-only distributors cannot deliver goods directly to retail. Reduced fees are available for cultivators or manufacturers who want to transport only the goods they themselves produce.

Retail License Types

A retail license is required to sell cannabis goods to the public in California.

Type 9: Non-Storefront Retailer (Delivery Only)

A Type 9 non-storefront retailer sells cannabis goods to customers exclusively through delivery. There is no physical retail location accessible to consumers. Delivery operators must still maintain licensed premises and comply with all DCC tracking and record-keeping requirements, including creating a delivery inventory ledger in CCTT-Metrc before each delivery trip departs.

Type 10: Storefront Retailer

A Type 10 storefront retailer operates a physical dispensary location where cannabis goods are sold directly to consumers. Storefront retailers may also offer delivery. All retailers must collect and remit the California cannabis excise tax currently 15% of gross receipts from retail sales, in effect through June 30, 2028. Medical cannabis sales to qualified patients with a valid Medical Marijuana Identification Card (MMIC) are exempt from state sales tax but are still subject to the 15% excise tax. Retailers must maintain documentation for every exempt medical transaction to withstand an audit.

Important: The vendor compensation program that previously allowed eligible equity retailers to retain 20% of cannabis excise tax due on their retail sales expired on December 31, 2025 and is no longer available as of January 1, 2026. Retailers who relied on that program must now account for the full excise tax liability.

How California Cannabis Retailers Operate at Scale: Mountain Medicine

Mountain Medicine is a tribally owned cannabis dispensary operating under the sovereignty of the Mooretown Rancheria Maidu Indians on tribal land in Butte County, California. The operation is vertically integrated the tribe runs cultivation and manufacturing alongside the retail storefront and serves both medical and adult-use customers across a full product catalog spanning flower, pre-rolls, vapes, concentrates, edibles, and wellness products. The combination of tribal sovereignty, vertical integration, and deliberate sourcing from licensed Native American growers and manufacturers drives retail volume that places Mountain Medicine among the largest tribally owned cannabis retailers in the country.

At that transaction volume, fragmentation across multiple technology systems becomes an operational liability. Before consolidating onto a single platform, the dispensary was managing separate systems for point of sale, online ordering, inventory tracking, and customer engagement each with its own data silo, its own training requirements, and no automatic reconciliation between in-store and online sales. Mountain Medicine runs Flourish as its central retail platform, connecting walk-in and online orders through a single inventory and fulfillment workflow so that an order placed through the AIQ-powered ecommerce storefront moves through the same backend as an in-store transaction. The AIQ integration through Flourish's open API also connects customer loyalty and purchase history data in real time, enabling the repeat-visit programs that high-volume retail depends on. Beyond retail, Flourish manages inventory and compliance tracking across the tribe's cultivation and manufacturing operations, keeping the full vertical supply chain in one connected system rather than distributed across platforms that don't communicate with each other.

Type 12: Microbusiness License

The microbusiness license allows a single business to conduct at least three of the following activities at one location:

• Cultivation (outdoor, mixed-light, indoor, and/or nursery) — up to 10,000 total square feet
• Manufacturing using non-volatile solvents, mechanical extraction, or infusion
• Distribution or distribution transport-only
• Retail — storefront or non-storefront

The cultivation component of a microbusiness is capped at 10,000 total square feet. Operators whose cultivation needs exceed that threshold must pursue separate cultivation licenses.

Testing Laboratory License

A testing laboratory license authorizes businesses to test cannabis and cannabis products for safety, quality, and potency before they can be sold at retail. All cannabis goods must pass compliance testing through a licensed lab before reaching retail labs test for pesticide residues, heavy metals, microbial contaminants, residual solvents, and cannabinoid potency among other parameters. Testing labs are independent by design and cannot hold any other type of cannabis license.

Event Organizer License

An event organizer license allows businesses to hold temporary events where cannabis will be sold on the premises by licensed retailers or microbusinesses. As of 2026, temporary cannabis event licenses can run up to 30 days significantly longer than previously permitted. Cannabis sales at events are subject to the same excise tax and sales tax requirements that apply to retail storefronts.

Key Compliance Rules Every California Cannabis Operator Must Know

Provisional Licenses Expired January 1, 2026

As of January 1, 2026, all provisional DCC licenses are no longer valid, with a limited exception for locally verified equity retailers actively pursuing annual licensure. Any operator still relying on a provisional license is operating illegally. Annual licensure requires completing all environmental review requirements, demonstrating local permit compliance, and satisfying all DCC application conditions.

CCTT-Metrc Is Mandatory for All Licensees

All California cannabis licensees must use the California Cannabis Track-and-Trace (CCTT) system powered by Metrc to record and track all cannabis inventory from seed to sale. Every plant, package, and product must be assigned a unique identifier (UID). Discrepancies between physical inventory and CCTT-Metrc records are among the most common DCC enforcement citations. Metrc is a reporting tool and is not a substitute for a full inventory management or point-of-sale system.

Cannabis Waste Must Be Rendered Unusable Before Disposal

Before cannabis waste leaves a licensed facility, it must be rendered unusable and unrecognizable. Licensees must develop a cannabis waste management plan and track waste through CCTT until it is properly disposed of by a permitted waste agency or self-hauled to a licensed facility.

Labor Peace Agreements Are a License Condition

State law requires many commercial cannabis licensees to enter into and abide by a labor peace agreement as a condition of maintaining a valid DCC license. Failure to execute or maintain this agreement puts the license at risk of suspension.