I own and operate a ​mobile delivery service​ in ​Sacramento, Ca​.

I am constantly
asked what it cost me to get the delivery service started in the new legal market. I will discuss
the permit costs, challenges and hidden costs you can expect to run into. I was lucky enough to
have owned a dispensary in 2017 before Prop 64 laws were in place. In 2017 I ran a mobile
delivery service in ​Chico​, Ca. I literally paid a lawyer $5,000.00 to draw up paperwork for a
nonprofit, fictitious name statement, file for a seller's permit and do the meeting/minutes of the
corporation. Other than that, I paid Weedmaps to post my menu and I bought a domain name
(​www.organiccareofcalifornia.com​). Maybe $6,000 Tops to start the company not counting
product. Legal market, not as fast, cheap or easy. It’s a very complicated process to get
awarded legal Prop. 64 license. I thought I was going to simply stay in ​Chico​ and get an
inexpensive permit there and then branch out. Instead ​Chico​ banned all commercial and
medical sales in the city. Worst, the county had no plans to legalize either. So, December 31st,
2017 we had to close our nonprofit medical delivery service in ​Chico​ to not risk prosecution as
an illegal club.

Sacramento had just passed laws and started to accept applications in early
2018. In Sacramento they also put a limit of 50 delivery service permits for the whole Power Inn
Alliance green zone (Green zone - Geographic location allowed to do cannabis related
businesses. ​Cannabis businesses​ can ONLY be inside of that area.), which made the license
rare and valuable. In order to apply for a license, I first had to find a building with a CUP
(Conditional Use Permit), Which is a permit given to the building itself that allows it to do a
specific type of cannabis business.

I specifically wanted to find a place approved for a ​delivery service​ CUP or a

building approved for a different CUP that I could reapply and change to a delivery service. Or
find a building that meets all the criteria for a CUP. Meaning it's not within 600ft of a school or
daycare, Not within 1,000 ft of a residence and multiple other things. So usually you must pay a
consultant or lawyer to make sure everything is in order and correct before you start paying rent.
I suggest never just thinking something is ok, always check and don't waste your money.
$5,000-$10,000 just to write the CUP. Then you must pay for the CUP application itself. You
must pay rent the whole time you write the paperwork, apply and while you wait for the permit.
Rent is usually $2.00-$3.50 a sq ft in the cannabis market. Each month you wait, and it took
over 8 months for me to get mine. 8 * ($3,000 a month) = $24,000 spent waiting. After
Sacramento looks at your CUP you have a public hearing you also must go to, where anyone
that works within a 1,000 ft gets to say if they agree or have a problem with your business being
there. Finally if you pass you now have to apply for a BOP (Business Operating Permit) which
costs $10-20,000 to write up and cost me $27,000 to apply based on my sq footage, license
type, and being in Sacramento, since all counties are different prices. There is also a stat e
permit which you must reapply each year.

State permit fee is based off the amount of gross income you think you're
going to make. If you make $750- 1 million its $7,500, 1 to 2 million is $22,500 a year and you
pay it before you make a single sale. Also, if you don't make the amount you thought you were
going to, you don't get any money back at all. The whole process usually takes 8 months to a
year or longer to get from paying rent to being awarded a state permit. That’s over $75,000 and
doesn't even count other things needed to legally operate.

The POS system that has to be metric compliant ($1-2,000 starting &
$400-$700 per month), Camera System (Starting $20,000 & $500-$1,000 per month), Insurance
(Property, General Liability, Bond, Product insurance, Through put insurance, car insurance &
workers comp.) Which all must be paid for before even applying and paid continuously during
the application process. I also had to change the interior of the building to meet BCC
specifications which was well over $40,000 the first time. I spent $250,000 the second time I
had to meet regulations by building a whole garage to enclose my drivers. After that wasn't a
requirement the whole first year I was operating. I am very happy I am legal, and I love my job,
but I am also in debt and work more than I ever have. It is a blessing to be a part of the legal
movement, but I never would have thought I could tell you that I spent over $500,000.00 making
my company legal. If I planned everything perfectly and when I open another delivery center, I
think I could get the costs to lower to around $150,000 to $200,000 to get the state permit
awarded to me. Yet, that’s also what I thought about the Sacramento permit LMAO! These costs
are specific to my size operation and being in Sacramento County. My building is very small,
and Sacramento is very cheap and fast with applications compared to other cities and counties
so far. It may be way more expensive and please don't risk your future on these numbers. Talk
to a consultant, lawyer or e mail me and I'll try and help. The costs also don't include
Weedmaps, marketing, CPA, cars, website, products, safes, or anything else. Basically, just the
cost of the building meeting the requirements for a permit and the permit itself. (A fucking piece
of paper! Lol But it lets you sell WEED!)

Costs​:
?Look Up Structures and make sure they fit CUP $1,000.00
conditions

?Rent Building to be able to start CUP application Per Month $2,500-$4,000

?Rent 8 to 12 months if not more ?$32-$50,000

?Writing CUP Application $5,000-$10,000

?Applying for CUP $3,000-$10,000

?Writing BOP Application $5-$10,000

?Applying for BOP $27,000-more

?Writing State permit application $5-10,000

?Applying for state permit: Based on income $7-25,000

projections

?Insurance (Car, General, product, workers comp, $15-$20,000

etc.)?

?Camera and Security Requirements? $20-$45,000

?Pos System (Metric Compliant)? ?$2-$3,000?

? ??($125,000-$250,000) If not
more!?

Written By:

Chaz Cornellier

founder, operator and C.E.O. ​Organic Care of California