Adult-Use Licensing Framework

What This Covers

• How adult-use license applications are submitted and reviewed
• Required application disclosures and updates
• Fees, license duration, and renewal requirements
• Selection criteria and public interest considerations
• Ownership, control, and premises change approvals

License Application (Section 61)

This section authorizes OCM to create the adult-use license application and define required information.

Key rules:

• Anyone may apply for an adult-use license
• Applications must be submitted in writing with the required fee
• One license is required per premises location
• Prior cannabis convictions may not be the sole basis for denial

What this means for operators:

• Licensing is site-specific
• Cannabis-related records do not automatically disqualify an applicant

Required Application Information (Section 62)

Applications must include complete and accurate disclosures.

Required information includes:

• Ownership and business structure
• Financial disclosures
• All True Parties of Interest
• Fingerprints and background checks
• Premises details
• Any additional information required by OCM

Additional requirements:

• Applications must be signed under penalty of perjury
• Required fees must be paid at submission
• Applicants must file a supplemental update at least 30 days before major changes, including funding, ownership, or premises

OCM may:

• Waive certain information categories for groups of applicants (not individuals)
• Restrict ownership changes for up to two years after operations begin

Fees (Section 63)

OCM is authorized to establish licensing fees.

Fees may include:

• Non-refundable application fees
• License fees, renewed every two years
• Scaled fees based on canopy size, production scale, or revenue

Additional fee rules:

• Registered Organizations entering adult-use are subject to higher fees
• Social and Economic Equity applicants may qualify for reduced or waived fees

Selection Criteria (Section 64)

OCM evaluates applications using multiple statutory factors.

Eligibility and operational readiness:

• Ability to meet license requirements
• Capacity to operate compliantly
• Ability to prevent diversion

Social and Economic Equity:

• SEE eligibility and priority status

Premises and property:

• Whether the applicant has secured or can secure the site
• Adequacy of space, equipment, and layout
• Impact on traffic, noise, and public safety

Community and labor considerations:

• Compliance with labor laws
• Existence of a Labor Peace Agreement
• Commitment to community impact

Public interest factors:

• Existing license density in the area
• Applicant’s compliance history
• Environmental sustainability
• Whether issuing the license benefits the community

Registered Organizations:

• OCM evaluates whether medical access is maintained
• All statutory and regulatory obligations must be met

If OCM intends to deny a license, written reasons must be provided.

License Limits and Duration (Section 65)

This section sets baseline limits that apply to all adult-use licenses.

Key requirements:

• No license may be issued to anyone under 21
• Employees under 18 are prohibited
• Employees aged 18–20 may not interact with customers
• No sales to persons under 21 or visibly intoxicated individuals
• No sales that knowingly exceed legal possession limits

OCM authority:

• OCM may cap production or sales volumes by license type

License duration:

• All adult-use licenses are valid for two years

License Renewal (Section 66)

To renew a license, a licensee must:

• Submit a renewal application
• Pay the renewal fee
• Confirm whether premises have changed
• Provide demographic data on workforce diversity
• Maintain a Labor Peace Agreement
• Demonstrate progress on social responsibility or impact plans

OCM must provide renewal forms at least 90 days before license expiration.

Ownership and Business Structure Changes (Section 67)

Each license identifies:

• Licensee name
• Premises address
• Authorized activities
• Unique license number

OCM approval is required before:

• Moving to a new location
• Adding or removing facilities
• Changing ownership
• Changing control
• Changing business structure

If changes are made without prior approval, the license is void.

Substantial Corporate Change

A substantial corporate change includes:

• More than 51% change in ownership, officers, directors, managing members, or partners
• Transfer of 51% or more of ownership interests
• Any individual reaching 51% ownership for the first time

OCM may later adopt rules allowing limited changes without prior approval, but the statute requires approval for most major changes.

What Operators Usually Miss

• Licenses are tied to a specific premises
• Ownership changes often require approval before closing
• Supplemental updates during application are mandatory
• Fees are non-refundable

When This Comes Up

• Preparing an initial application
• Adding investors or changing ownership
• Moving or expanding a premises
• License renewal cycles

What Happens If You Ignore This

• Application denial or voiding
• License revocation
• Forced unwinding of ownership changes
• Delays in renewal or expansion

Go To MRTA Article 4 Section Pages

• Adult- Use License Types (Sections 68 - 75, 77)‍
• Municipal Notification Requirements (Section 76)‍
• SOPs and Operations (Sections 78–86)‍
• Equity, Data, and Reporting (Sections 87–89)‍
• MRTA Article 4 Main Section Page

Source Material

• MRTA Article 4, Sections 61–67