Distributor
A distributor license allows you to purchase, store, and transport cannabis products between licensed operators. Distributors do not manufacture products or sell to consumers. Instead, they function as the compliance checkpoint between processors and retailers.
Every product that reaches a dispensary shelf must move legally through a licensed distributor. This makes distributors essential for documentation, traceability, tax handling, and regulatory oversight across the supply chain.
What You’re Licensed to Do
A licensed distributor may:
- Receive finished cannabis products from licensed processors
- Store cannabis inventory in a secure, approved facility
- Transport products to licensed dispensaries or microbusinesses
- Verify that packaging, labeling, and testing meet state requirements
- Generate and manage manifests for all transfers
- Record all product movement in METRC
- Collect and remit applicable state excise taxes
No product moves forward in the supply chain without distributor authorization and documentation.
What You’re Prohibited From Doing
A distributor license does not allow:
- Sales directly to consumers
- Altering, manufacturing, or repackaging cannabis products
- Moving product without a compliant manifest
- Using unregistered vehicles or unapproved storage locations
- Receiving or transporting cannabis from unlicensed sources
- Combining this license with other license types unless explicitly permitted
Transport, storage, and recordkeeping violations are among the fastest ways to trigger enforcement actions, including suspension or revocation.
Transport, Storage, and Security Requirements
Distributors must maintain continuous control over cannabis products. Core requirements include:
- Locked and secure transport vehicles with documented GPS tracking
- Tamper-evident packaging during transport
- Secure, access-controlled warehouse or storage facilities
- A documented chain of custody for every transfer
- Written incident and contingency plans addressing loss, theft, or diversion
All security and transport obligations must align with OCM operational standards.
Recordkeeping, Manifests, and METRC
Distributors are responsible for complete and accurate documentation of every transfer. This includes:
- Creating a manifest for each movement showing origin, destination, driver, vehicle, and product details
- Logging all transfers and receipts in METRC
- Retaining all paper and digital records for the required period
- Ensuring manifests match physical inventory at every checkpoint
- Reconciling discrepancies immediately and documenting corrective actions
OCM treats documentation as proof of compliance. If a transfer is not recorded, it is treated as though it never occurred.
Related Pages
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