Is a Type S License the Answer to all Your Problems?
Let’s be honest, to acquire a cannabis manufacturing license in Los Angeles will set you back several hundred thousand dollars. This doesn’t include tenant improvements, the property you’ll need, lease payments (while the property is being improved), and other unexpected operating expenses. More likely, you will need in excess of a million dollars to get started. But what if? What if there was a solution, where, for just a few thousand dollars, your genius, never-been-done before, so crazy-it might work-idea could get to market? What if you had a chance to significantly reduce your odds of ruining your first batch, or ten batches for that matter (because you have never manufactured anything before)? Behold, the Type S Cannabis License.
First, what the Type S license does not give you: It does not give you the right to physically manufacture your own distillates or other products or any other cannabis derivative. Rather, it permits you to package, label, and infuse certain products at a licensed cannabis manufacturing business that has registered as a Type S facility.
For example, a licensed and registered Type S manufacturer will agree to produce your product to your specifications while providing you space to package and label your product. Typically, a manufacturer will request that you purchase their own oil; however, this is not a legal requirement. Once your product has been produced, labeled, and packaged, you will be free to transfer it to your own distributor or through a distribution license your manufacturer may already hold.
There must be some downsides right? Yes. First, the City of Los Angeles has not definitively stated how they intend to process Type S licenses. Second, it is very difficult to find facilities willing to work with license holders who only need small batches of 20,000 or less products. Moreover, profit margins may be drastically reduced by out-sourcing the entire chain of production to a third party. Finally, at best, you will likely break even with your first batch of products.
Despite some concerns, for those looking to execute a concept or test their chops in the marijuana industry, a Type S license is an affordable low risk option. If you believe you have a great concept, contact the professionals at Cannabis Licensing Services to be matched with a registered Type S facility near you!