Tier 2 Manufacturer

Definition

A Tier 2 manufacturer is a cannabis business license class that authorizes the production of cannabis products through non-extraction methods — typically infusion, blending, formulation, and packaging — using cannabis concentrates or distillate produced by separately licensed extractors Strong evidence^[1].

The term is primarily used in California's Department of Cannabis Control framework, where analogous licenses are Type 6 (non-volatile extraction) and Type N (infusion and blending only) Strong evidence^[1]. Tier 2 licensees are explicitly prohibited from performing extraction using volatile solvents such as butane, propane, ethanol above specified thresholds, or supercritical CO₂ Strong evidence^[2].

Other regulated states (Colorado, Washington, Massachusetts, New York) have their own distinct license taxonomies and naming conventions. The term 'Tier 2' is sometimes used informally in industry conversation to refer to downstream manufacturers generally, but it does not represent a universal federal or interstate standard Weak / limited.

Permitted activities

A Tier 2 manufacturer is typically authorized to:

• Infuse cannabis oil, distillate, or isolate into edibles, beverages, tinctures, capsules, topicals, and transdermal products
• Blend or formulate finished products from purchased concentrates
• Fill vape cartridges with pre-made distillate or cannabis oil
• Package and label products for retail compliance
• Repackage bulk extract into consumer-sized units
• Store purchased cannabis material under secure, compliant conditions

Each activity must remain within the licensed facility's physical footprint and comply with state track-and-trace requirements (e.g., California's METRC system) Strong evidence^[1].

Prohibited activities

Tier 2 manufacturers are explicitly prohibited from:

• Extraction using volatile solvents (butane, propane, hexane, pentane, naphtha, ethanol at certain concentrations) or supercritical CO₂ in most jurisdictions Strong evidence^[2]
• Cultivation or production of raw cannabis flower or biomass
• Distillation or chemical conversion of cannabinoids
• Possession of volatile extraction equipment or closed-loop systems
• Production of live rosin or other solventless extracts (where specific regulations restrict solventless processing to licensed extractors)

Violation of these restrictions can result in license suspension or revocation Strong evidence^[1].

What it is not

Tier 2 is not a quality or potency ranking. Products from a Tier 2 manufacturer are not inherently higher or lower in quality, cannabinoid content, or purity than those from a vertically integrated operator or a Tier 1 extractor No data. It is purely a regulatory scope classification.

Tier 2 also does not map uniformly across states. California, Colorado, Washington, Massachusetts, and New York each maintain separate license taxonomies. A conversation partner in another state using the term 'Tier 2' may be referring to a functionally different license type Weak / limited.

Finally, the term does not appear on consumer-facing product packaging. What does appear is the manufacturer's license number and type code, which a consumer can cross-reference with their state regulator's online license lookup tool to identify whether that company performed extraction or sourced concentrates Strong evidence^[1].

Where the term is used

You will encounter 'Tier 2 manufacturer' in:

• State cannabis regulatory authority websites and public license registries
• B2B supply contracts between concentrate producers and finished-goods brands
• Compliance and facility documentation
• Industry job postings for production, quality assurance, and packaging roles
• Regulatory guidance documents and draft rulemaking

For consumers verifying product origin, the manufacturer license number printed on packaging — combined with your state regulator's public license search tool — will typically disclose whether that company extracted the oil themselves or sourced it from a separately licensed extractor Strong evidence^[1].

Sources

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