Can I Still Apply for a Cannabis License with Prior Convictions?

Can I Still Apply for a Cannabis License with Prior Convictions?

SHORT ANSWER: Yes, you (Applicant) can apply for licenses under MAUCRSA subject to the review of the Department.

Just like any job or license application, MAUCRSA requires applicants to disclose all information required by the regulations, which include prior convictions, judgments, etc.

What should I do to before I apply for a license?

Under MAUCRA, an applicant shall not be denied a state license if the denial is based solely on any of the following:

A conviction or act that is substantially related to the qualifications, functions, or duties of the business or profession for which the application is made for which the applicant or licensee has obtained a certificate of rehabilitation,

A conviction that was subsequently [Expunged] dismissed pursuant to Section 1203.4, 1203.4a, or 1203.41 of the Penal Code or any other provision allowing for dismissal of a conviction.

LONG ANSWER: The new Medicinal & Adult Use Cannabis Regulation & Safety Act “MAUCRSA” repealed the residency requirement. Now, applicants for licenses under MAUCRSA are subject to revised and recasted application requirements, and the persons subject to these requirements were also be revised.

First, it is important to know how to qualify as an “Applicant” in order to even apply for a State license?

Applicant” is defined as an “Owner” applying for a state license. Business and Professions Code Section 26001(c).

Owner” is defined as a “Person”.  “Person” includes any individual, firm, partnership, joint venture, association, corporation, limited liability company, estate, trust, business trust, receiver, syndicate, or any other group or combination acting as a unit, and the plural as well as the singular.

“An owner” shall mean any of the following:

(1) Any person that has an aggregate ownership interest, other than a security interest, lien, or encumbrance, in a commercial cannabis business of 20 percent or more;

(2) The chief executive officer of a commercial cannabis business;

(3) If a non-profit entity, each member of the Board of Directors;

(4) Any individual that will be participating in the direction, control, or management of the licensed commercial cannabis business.

An owner who is an individual participating in the direction, control, or management of the commercial cannabis business includes any of the following:

(A) Each partner of a commercial cannabis business that is organized as a partnership;

(B) Each member of a limited liability company for a commercial cannabis business that is organized as a limited liability company.

(C) Each officer or director of a commercial cannabis business that is organized as a corporation.

(b) Persons that hold an ownership interest of less than 20 percent in a commercial cannabis business are considered to be financial interest holders for purposes of subsection (d) section 26051.5 of the Business and Professions Code and shall be disclosed on the application for licensure. Such individuals are not required to submit an owner application under Section 40130. A financial interest means an investment into a commercial cannabis business, a loan provided to a commercial cannabis business.

The following persons are not considered to be owners or financial interest holders:

(1) A bank or financial institution whose interest constitutes a loan;

(2) Persons whose only ownership interest in the commercial cannabis business is through an interest in a diversified mutual fund, blind trust, or similar instrument.

(3) Persons whose only financial interest is a security interest, lien, or encumbrance on property that will be used by the commercial cannabis business; and

(4) Individuals who hold a share of stock that is less than 5 percent of the total shares in a publicly traded company.

Applications disclosing a prior conviction.

Any application disclosing a prior conviction will be reviewed by the Department and you may submit any evidence of rehabilitation for consideration by the Department with the application.

A statement of rehabilitation shall be written by the owner and contain all the evidence that the owner would like the Department to consider that demonstrates the owner’s fitness for licensure. Supporting evidence may be attached to the statement of rehabilitation and may include, but is not limited to, dated letters of reference from employers, instructors, or counselors that contain valid contact information for the individual providing the reference.

Criteria for Evidence of Rehabilitation.

When evaluating whether a license should be issued or denied when an owner has been convicted of a criminal offense or committed a violation of law that is substantially related to the qualifications, functions, or duties of the business for which the application is made, the Department shall consider the following criteria in its evaluation of evidence of rehabilitation:

(1) The nature and severity of the act or offense, including the actual or potential harm to the public.

(2) The owner’s criminal record as a whole.

(3) Evidence of any act committed subsequent to the act or offense under consideration that could be considered grounds for denial, suspension, or revocation of a manufacturing license.

(4) The time elapsed since commission of the act or offense listed in Section 40162, or in section 26057, subdivision (b)(4) of the Business and Professions Code.

(5) The extent to which the owner has complied with any terms of parole, probation, restitution, or any other sanctions lawfully imposed against the applicant or licensee.

(6) If applicable, evidence of expungement proceedings under Penal Code section 1203.4 or a similar law in another state.

(7) If applicable, a certificate of rehabilitation obtained under Penal Code section 4852.01 or a similar law in another state.

(8) Other evidence of rehabilitation submitted by the owner.

For more detailed information, please click on one or more of the links below to view the entire regulation and summary (.pdf format).

What are the Types of Manufacturing Licenses are Available?

What are the Types of Cultivation Licenses are Available?

What Types of Testing, Retailer, Distributor Licenses are Available?



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