What does a California cannabis distributor actually do in the supply chain?

In California, cannabis distributors can handle quality assurance and testing coordination, packaging and labeling checks, tax collection and remittance, transportation between licensees, and storage. Some also provide sales and marketing support, while others operate strictly as distribution as a service. The exact mix depends on the distributor license type and the service model.

How does quarantine and lab testing work at a Type 11 distribution facility?

When products are ready for testing, they must be held in a separate quarantine area until results come back from a licensed testing lab. A lab agent typically visits the distribution site and pulls random samples from each batch for compliance testing. Only batches that pass can move forward to sale, and the distributor also helps ensure packaging and labeling are correct before it goes to retail.

How can Distru help a distributor manage QA, quarantine, and compliance tasks?

Distru ERP helps track inventory status like quarantine versus available, and it supports seed to sale visibility so teams can see where each batch is in the workflow. It also supports compliance automation and production tracking so you can tie test outcomes and packaging steps back to the right lots and batches. DistruLabels can help generate compliant Metrc labels when relabeling is needed.

Who collects cultivation tax and excise tax in California cannabis distribution?

Distributors collect cultivation tax from cultivators or manufacturers, and the timing can vary depending on whether product is consigned or sold before payout. Distributors also collect excise tax from retailers, delivery operators, or microbusinesses and remit those taxes. Excise tax is typically calculated as a percentage of the invoice total, so clean invoicing and reconciliation matter.

Can Distru help with wholesale invoicing and excise tax calculations for distributors?

Distru ERP supports wholesale sales management and invoicing so distributors can keep invoice totals accurate and consistent for excise tax calculations. It also helps tie invoices back to specific inventory lots for traceability and cleaner reconciliation. If you use DistruCommerce, retailers can place orders from a live menu which reduces manual entry errors that can affect tax reporting.

What is the difference between Type 11 and Type 13 distributors for transportation in California?

Distributors are the only license type that can transport cannabis between licensees, but the scope depends on the license. Type 11 distributors are the only ones who can deliver to a retailer and they can subcontract deliveries to another Type 11 distributor. Type 13 distributors can transport between licenses as well and may transport immature plants to a dispensary, depending on current state rules.

Cannabis Distributor Roles in California

Distributors can play a variety of roles. The following is a brief break down of the different distribution models; NOTE: This is NOT legal advice; for accurate depictions of regulations, please consult the regulatory documents published by the state of California and / or consult your attorney.

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Quality Assurance

Once retail or commercially-ready products are ready to be tested by a Type 11-distributor, they must be held in quarantine in a separate location from rest of the inventory, while awaiting testing from a licensed testing facility.
An agent of the testing lab will come onsite the distribution facility and pull random samples from each ready-batch to take for testing. Batches with passing test results may be sold.
A distributor must ensure proper packaging and labeling (and potentially re-labeling) before sale to retail, delivery or micro-businesses.
Distributors may purchase tests and charge a mark-up or require their producer client to purchase tests from labs directly.

Tax Collection and Remittance

Distributors collect the Cultivation Tax (from cultivators or manufacturers) but do not have to collect right when material exchanges hands. It might be that distributors will take material on consignment, sell it, and then pay off the producer less their fees and cultivation tax owed.
Distributors are responsible for collecting the excise Tax (from retail, delivery or micro-businesses) and remit those taxes. Excise tax is calculated as a % of invoice total.

Transportation

Distributors are the only license types that can transport between licensees
Type-11 distributors are the only ones who can deliver to a retailer and may sub-contract out to another Type-11 distributor.
Type-13 distributors may transport between licenses or transport immature plants to a dispensary
Distributors may end up handling a lot of cash as many sales are COD (cash on delivery)
Distributors can charge for transportation by either charging a fixed fee, a fee per mileage, and/or a % of the invoice amount

Storage

Distributors may provide storage-only services or have it as part of their overall offering of testing, storing and transportation
Distributors can charge producers for storage by the space the inventory occupies

Sales & Marketing

Type 11-Distributors may engage in sales and marketing on behalf of Producers, including purchasing and reselling from other licensees
Not every Distributor buys and resells; many may strictly provide distribution-as-a-service and charge a fee accordingly

As you can see, distributors can play a variety of roles and are central to the cannabis supply chain. To learn more about taxation, please visit CDTFA's website.

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