1. What activity qualifies as “manufacturing”

The Department of Cannabis Control (DCC) defines cannabis manufacturing as making cannabis products (e.g., infused foods, vape cartridges, lotions, concentrates, etc.).

Activities include:

• Extraction of cannabinoids/terpenes from cannabis plant material.

• Post-processing of extracts (refinement, solvent removal, etc.).

• Infusion of extract or plant material with other ingredients (edibles, topicals, etc.).

• Packaging and labeling of the finished cannabis goods.

So if you are producing infused edibles, concentrates, vape cartridges, etc., you will need a manufacturing license (or have arrangements with a licensed manufacturer).

2. License types for manufacturing

The California Code of Regulations and DCC classify different manufacturing license types.

Key types include:

• Type 7 (“volatile solvent manufacturing”): permits extractions using volatile solvents (flammable/flamming gas/vapor)—butane, hexane, propane etc. Can also do non-volatile and mechanical extractions, infusion, packaging/labeling.

• Type 6 (“non-volatile solvent or mechanical extraction manufacturing”): permits use of non-volatile solvents (ethanol, CO₂, cooking oil, butter) or mechanical extraction (rosin press, dry ice), plus infusion, packaging/labeling.

• Type N (“infusion manufacturing”): permits infusion operations (using extracts or plant material) + packaging/labeling, but not full extraction with solvents necessarily.

• Type P (“packaging/labeling only”): for businesses that only package or repackage or label cannabis products.

• Type S (“shared-use facility manufacturing”): facility where multiple small manufacturers share space/equipment; allows certain extraction/infusion/packaging operations under shared-use rules.

For example, if a you are only doing infusion (say edibles) and packaging/labeling, but not extracting with volatile solvents, you might choose Type N. If you want full extraction including volatile solvents, you need Type 7.

3. Regulatory / compliance requirements

When manufacturing cannabis products in California there are several major requirement categories to keep in mind:

a) State + Local licensing

• A business must secure a state license from the DCC (or other relevant state agency) and must comply with the city/county zoning and permitting rules. The state license alone is not sufficient if the locality prohibits or limits manufacturing.

• The licensing type must match the activities you intend to conduct. If you do multiple activities you may need multiple licenses.

• Licenses are not transferable (in the sense that you can’t simply buy a license and move it without approval) in many cases.

b) Good Manufacturing Practices (GMP) & food-safety style rules

Manufacturers must follow good manufacturing practices: sanitation, written procedures, documentation, contamination control, personal hygiene, etc.
For manufacturing that uses solvents or produces edible/topical products, food-safety, allergen controls, packaging/labeling rules become especially important (for example allergen control program checklist).

c) Extraction equipment & volatile solvents regulations

If you’re using volatile solvents (Type 7), there are extra rules: closed-loop extraction systems, certification, maintaining safe operation, volatile solvent definition.

d) Packaging & Labeling

Manufactured cannabis products must be packaged to prevent contamination and must meet child-resistant packaging requirements, tamper-evidence, resealable, etc.
Labels must include certain required information and the universal cannabis symbol.

e) Where business operations are allowed

Even if you secure a state license, your manufacturing facility must be in a location zoned/authorized by the local city or county. Some localities allow manufacturing; others restrict or ban it.

4. Fees & Tiers

Manufacturing license fees in California are tiered based on annual gross revenue and license type. For example:

• For Type 7, 6, N, P: the application fee is $1,000. Then license fees scale: Tier I (≤$100k revenue) is $2,000; higher tiers go up to $75,000 for $10M+ revenue.

• For Type S: smaller application fee ($500) and license fee starts at $2,000 for Tier I.

So when evaluating a manufacturing business model, you need to budget for sizable licensing fees, and factor in the revenue tier your facility anticipates.

5. Strategic Considerations

• Match the equipment to the license-type: If you intend to do volatile solvent extraction (butane, hexane, propane), you must secure a Type 7 license, which means your facility must comply with the more stringent safety/certification rules for closed-loop systems etc. If you are using non-volatile or mechanical methods (rosin press, CO₂, ethanol), then Type 6 may suffice. This affects equipment choices, capital cost, safety systems, ventilation, certifications.

• Facility zoning and local approvals: Even if you can secure the right state license, the local city/county may have zoning or land-use restrictions for manufacturing (especially volatile extraction). Choosing a site that is properly zoned and permitted is critical. Many manufacturing operations are delayed or blocked due to local land-use.

• Shared-use facilities: For smaller players, the Type S (shared-use) license option may offer lower cost entry (shared equipment/facility).

• Operational compliance burden: Many manufacturing operations underestimate the ongoing compliance cost: GMP documentation, sanitization, QA checks, packaging/labeling, extraction safety, record-keeping.

• Revenue tier vs license fee: For a new manufacturing business, estimating your revenue and picking the correct tier is important early on. Underestimating may incur higher fees later; overestimating may be risky if the business does not achieve that revenue.

• Integration with other services: Manufacturing often is tied to distribution, packaging, utilization of extracts from cultivation, etc. If you are looking to vertically integrate, you must evaluate whether a manufacturing license is sufficient or whether you also need other licenses (distribution, cultivation) or to partner with license-holders.

• Equipment for extraction/infusion: For Type 7 (volatile solvents) the extraction equipment needs to be certified as closed-loop and meet safety codes. You will need appropriate ventilation, HVAC, explosion-proof equipment, compliance with fire code and local building code. This is higher cost, higher risk. For non-volatile or mechanical methods, equipment demands may be lower but still need reliable design and documentation.

• Packaging and labeling requirements: Since the license also covers packaging/labeling, you may need equipment and systems for tamper-evidence, resealability, child-resistant packaging.

• Supply chain traceability: Only licensed extractors/manufacturers can supply downstream products; manufacturers cannot simply bring in unlicensed extract or plant material and manufacture without ensuring everything is licensed.

• Market conditions and risk: The regulatory and economic environment is challenging (as recent industry commentary notes).

6. Next-step check-list for a manufacturing license

• Confirm the type of manufacturing activity (extraction? infusion? just packaging/labeling?) → select correct license type (Type 7, 6, N, P, S).

• Choose a site that is zoned and approved locally for cannabis manufacturing. Confirm local city/county permits.

• Apply for state license via the DCC – complete application, pay fees, provide site-plan, extraction equipment details, etc.

• Design facility to meet GMP/food-safety standards: sanitary equipment, documentation systems, QA product quality plan.

• If using solvents, select certified/approved closed-loop systems, ensure ventilation/fire code compliance, submit extraction method info.

• Choose packaging/labeling equipment/system that meets child-resistant, tamper-evidence, resealable requirements.

• Ensure supply chain traceability: licensed extract or input material from cultivators, licensed manufacturing premises, documentation.

• Estimate revenue tier for license fee calculation and plan accordingly.

• Set up operational systems: Quality control, allergen control (if edibles), record-keeping, labeling compliance.

• Develop business plan for manufacturing: capacity, output, cost of compliance, equipment (which you provide), overhead.

• Ensure you have workforce trained in GMP/extraction/packaging, safety protocols.

• Monitor compliance and renewal: license renewals, updates if the operation changes (e.g., adding extraction or new product lines).