Preparing and submitting a license application for a new cannabis business can be an extremely long, daunting and complicated process. The process is also extremely competitive and as a result, it is crucial to have a compelling application that sets you apart from the other businesses vying for a limited number of licenses. The importance of being fully prepared cannot be stressed enough. If you wait to get organized until application deadlines are announced, it will be too late.
As legalization continues to move through the nation, many states are in the process of implementing regulated cannabis programs, including New Mexico, New York, New Jersey, Virginia, South Dakota and most recently Connecticut. If you are interested in opening a cannabis business in any of these newly regulated states, it is vital that you and your team are highly organized throughout the pre-licensing phase. The following tips will help ensure you are fully prepared for every step of the cannabis licensing process.
1. Clearly Establish the Details of Your Cannabis Business
The first thing you will need to do is clearly identify what your proposed business will do. This includes:
Who will be part of your team?
You will need to establish the specific roles and responsibilities for each included stakeholder.
What type of business you are opening?
Are you getting into the cultivation, processing, wholesale or retail distribution, transportation, social consumption or any combination of these license types?
Where your business will be located?
Real estate is among the most important aspects of the application process for cannabis licensing. The more specific you can be, the better. In some states, licensing bodies may give preference to applicants who have already secured their physical location and can demonstrate that it is properly zoned for your specific cannabis business.
How will you fund your business?
You will need to provide information about your investors and demonstrate that you have the funds, or proof of capital, to successfully launch and operate your new cannabis venture sustainably without interruption.
2. Build a Strong Team
Running a cannabis business will require a dynamic and experienced team as there is far too much for any one person to manage on their own. You will need to have a team of well-rounded professionals with complementary skill sets in place well before the start of the application process. Government officials reviewing license applications will want to see evidence that your team has the background necessary to successfully manage and operate every aspect of your business.
Make sure your team includes the following professionals:
- Lawyers with extensive experience working in the cannabis industry
- Accountants who have worked with clients in the cannabis industry
- Individuals with strong government relations background
- For cultivation operations – A cannabis cultivator or horticulturist who fully understands large scale cultivation and all other agricultural aspects of the business
- For recreational dispensary operations – Retail professionals who understand the key aspects of POS systems, inventory control, customer service etc.
- For medical dispensary operations – A Medical Director and/or Board of Advisors
- Individuals from other highly regulated industries – Liquor, Gaming, Manufacturing etc.
You will also need to be able to demonstrate a track record of business success, either as part of a cannabis operation in other markets or a business venture in other, possibly comparable industries. The state licensing board will want to see that you have a strong track record of compliance with governmental regulations and the ability to get a complex business up and running.
It is also highly encouraged that you perform comprehensive, internal background checks on all of your team members prior to the application process. In addition to the required criminal background checks, members of your state’s licensing board will likely review the moral character of every stakeholder in the business, for which even small red flags in a person’s background can potentially derail your application. It is much better to be aware of any potential issues before you apply for a license and if necessary, you may need to consider replacing any team members who will not hold up to the high levels of scrutiny associated with this process.
3. Become Familiar with Your State’s Licensing Requirements
The cannabis business licensing process varies from state to state and even town to town. It is important that you understand both the state and the municipal regulations associated with obtaining a cannabis license. New cannabis businesses often need local licensing prior to receiving state licensing for adult use markets. When you create your application, you will need to ensure that you are complying with all applicable rules and regulations.
In addition, you will need to become familiar with your state’s licensing structure. Some states issue vertically integrated licenses that grant you the ability to cultivate, process and sell cannabis under one license. Other states, however, may require you to obtain separate licenses for each of the aspects of the industry that you plan to operate in. Therefore, you will need to know specifically which license applications apply to your business. Determining this early on will allow you more time to properly prepare your application.
4. Establish Relationships with State and Local Government Officials
It is beneficial to attend meetings with local and state government officials that focus on details associated with the new cannabis regulations. This will help you better understand what your state is looking for when they review license applications and possibly allowing you to tailor your application to align with state and local requirements.
As you attend these meetings, you will start cultivating personal relationships and establishing a dialogue with the government officials who are running your state’s cannabis industry, providing you an opportunity to explain to them exactly what your business will bring to the community. These connections can play a big role in your ability to secure an application.
5. Get Involved with the Local Community
Community outreach is an absolute vital part of the application process. The officials reviewing your cannabis license application will want to see that you are truly committed to engaging with your community and not simply looking to benefit financially. Furthermore, your community involvement efforts should always be organic and sincere. And most importantly, you should maintain a strong focus on ways you can educate the people in your neighborhood about cannabis and the many ways that your business will benefit the entire community.
The best ways to understand the unique idiosyncrasies of the community is to simply get involved. This will help you establish plans that enrich the area beyond simply providing cannabis products. Giving back to the community in ways that are unrelated to your business will often help make the individuals in your area more welcoming as you begin to establish your operation.
6. Hire an Expert Cannabis Industry Consultant
As the cannabis licensing process has become extremely complex in recent years, it remains crucial that your team has a robust understanding of the technical elements associated with applying for a cannabis license. Experienced cannabis industry consultants have handled this process numerous times in different states and can provide the framework for how to best approach this very competitive process. Industry consultants are also going to be very familiar with the unique regulations associated with your city and state and can ensure that you properly address and include these as part of your application.
In addition to positioning your application for success, cannabis industry consultants can help you build out the specific details of each aspect of your operations. This will ensure you establish a strong foundation for a business that can sustain long term success.
American Cannabis Company Can Give You the Edge You Need When Creating Your Cannabis License Application
American Cannabis Company has nearly a decade of experience helping businesses navigate the competitive cannabis licensing process. Whether you are trying to open a business in a state that just legalized or a state with a previously established cannabis market, we will prepare you and your entire team for success.
We will work closely with you to understand your specific goals and identify the growth opportunities available for your chosen niche. All of our recommendations are customized based on your state’s specific guidelines and regulations, ensuring your license application aligns with all necessary requirements.
Working with our team of cannabis industry professionals will give you peace of mind that you are setting the proper foundation for long term success.
Contact us today to schedule a consultation.