California accepts pot business applications as state eyes $7B industry

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California on Friday accepted the first applications for legal marijuana businesses as the state prepares to kickstart a recreational pot industry that is projected to add $7 billion to its economy.

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California on Friday began accepting applications from businesses that want to operate in the state's legal marijuana industry next year, a milestone for the emerging market.

After months in development, an online system launched and will allow retailers, distributors and testing labs to seek state licenses, which are required to conduct business.

Recreational pot sales start in California on Jan. 1, joining the long-running medical cannabis industry.

"Now that applications are coming in, we can officially move one step closer to issuing California's first state licenses for commercial cannabis activity," Lori Ajax, who heads the state Bureau of Cannabis Control, said in a statement.

California is one of eight states that has legalized marijuana for recreational purposes. Pot remains illegal under federal law, and U.S. Attorney General Jeff Sessions has been critical of legalization efforts.

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By late afternoon, state officials said the online site was functioning well and visitors appeared to be mostly familiarizing themselves with it, rather than submitting full applications.

The number of completed applications was not immediately available.

"People are creating accounts and checking out the site. Some people have started an application but may be putting in some information and finishing the rest later," bureau spokesman Alex Traverso said in an email.

When issued, the temporary licenses will not be effective until Jan. 1, and businesses need local permits before applying for state licenses.

Starting on Jan. 1, California will allow state residents aged 21 or older to legally possess up to one ounce of marijuana. Residents will also be allowed to grow as many as six marijuana plants at home.

Along with valid local permits, those who apply will need to disclose owners in the businesses, their locations, provide diagrams of the establishments and produce documents that show how their cannabis businesses would operate at the sites.

The state and cities have been hustling to establish rules to govern the projected $7 billion industry that range from where plants can be grown to determining the location of pot businesses.

The Los Angeles City Council this week endorsed regulations under which residential neighborhoods would be largely off-limits to pot businesses. Buffer zones would be set up around schools, libraries and parks.

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In a state with a vast illegal pot market, it has been a long-running question how many businesses will come forward to seek licenses for the new legal market.

The state projects it will collect $1 billion in new taxes from pot sales and other activity within several years.

The Associated Press contributed to this report.

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