Launching a successful cannabis business requires equipping yourself with an understanding of the rules, regulations and opportunities behind the cannabis industry, both locally and nationally.
If you’re reading this, chances are you’re doing your part to research how to successfully prepare to apply for a cannabis license. These days there’s only around a dozen states that aren’t medical and around thirty that aren’t recreational. Now is a lucrative time to step into the industry. The application process can be lengthy, and being disorganized can cause unnecessary stress and possible rejection of the application.
Clay Brier, a partner at Green Belt Strategies, knows exactly how rigorous cannabis license applications are. “An application is similar to taking a test,” explains Clay. “There will be generic questions as well as essay questions. They should be answered as straight forward as possible, and in detail when necessary.” This is a test you probably won’t pass without studying for. The stakes are high, and you may only have one chance to apply. Before you get started, follow these tips to ensure your application process goes as smoothly as possible.
Knowing The Rules
It’s important not to rush into the industry without knowing your state’s rules and regulations, particularly when it comes to delivery and transport, as they will vary from state to state, but usually share several common denominators. Making assumptions is a no-no, and can lead to costly, possibly irreversible mistakes. Being involved as much as possible with local and state government will help you align with those granting or affecting the licenses.
Be sure the laws in your intended location allow the product or service you intend to provide, then make a checklist of the city, county, and state approvals you’ll need. Get familiar with the requirements for each business license application you need to submit, and get together all that you can in advance prior to applying. Be prepared to pay a fee or multiple fees along the way in the application process, which can range anywhere from a few thousand to something much more substantial. Willingness to comply is the first thing regulators need and want to see.
Forming a Strong Plan
First time applicants need a strong business plan, team, financial model, and story. Moreover, you must state the resources that you have available, why you’re interested in applying for a cannabis license, what brought you to the industry, what your previous industry work entailed and your business goals. Are you looking to open a large business with potential to expand, or a small niche boutique? How will you manage your project? Have you done any market research in your area? Knowing the demand for cannabis in your chosen region will determine how big your facility should be, how much product you can produce, and if this is in fact appropriate. Make sure you already have an idea what percent of the population your business will cover and appeal to, as well as how you plan to meet demand and maintain your business.
Selecting A Diverse & Multidisciplinary Team
Building a strong team of diverse, multidisciplinary people, that includes strong financial partners, will greatly improve your chances of application approval. Dedicated individuals ready to commit, especially financially, will assure regulators that you’re ready to go “all in” and be successful. After all, this might be your only application.
In particular, you’ll need:
- A cultivator (for a cultivation facility)
- A medical director
- Legal expertise
- A record of business success
- An accountant
- Industry Experts
Be thorough in disclosing information about your team of choice. Align yourself with a trustworthy set of individuals, as background checks are a must, and everyone on your team must be prepared for a high level of scrutiny.
Preparing For Curve Balls
Many parts of an application are straightforward “yes” or “no” questions, based on compliance and regulations. You’ll answer questions such as: “Will your bathrooms be compliant to regulations?” and “Will you have security?” However, with other questions, applicants must express in as much detail as possible on how they plan on being successful. While some of these questions may seem obvious, others are designed to challenge your plan and hold it under a microscope. Be prepared to address the following hot topic issues:
Licenses are typically limited per state, and are handed out in rounds during a certain period of time. If you’re a member of a disadvantaged group, a victim of the drug war, or economically disadvantaged, you may be entitled to first choice on the license you’re applying for. Social Equity promotes fairness and justice for all, so if you’re in need of an advantage don’t be afraid to express it. Some states, such as New York, look to award up to half of their licenses to Social Equity applicants. Familiarize yourself with the Social Equity programs in your state to see if this applies to you.
More often than not, the regulators in your state will want to know how you plan on interacting with the community. How will you be giving back? Are you hiring veterans or the disabled? Job creation is often an important aspect to a community. Having a diverse workforce and organizations that you plan on donating to or supporting, will set you apart from other applicants, and give your application an advantage over others that may not include something of this nature.
When it comes to Community Impact, you’ll need to balance strategy and empathy. Attending legislative sessions and community meetings will give you an idea of the demographics in your area and what’s important to them, which will give you a better handle on how to serve your community as a whole. For example, in Oakland, California, new dispensaries won over the community by providing security not just for their business, but for the entire neighborhood.
Conducting surveys, volunteering, visiting locally owned businesses to introduce yourself, and attending town/city hall meetings are all great ways to engage and attract potential supporters and customers; without customers, you don’t have a business. By studying your community and addressing their specific needs or concerns, you can prove to regulators that you understand their priorities and care about your impact.
Regulators will need detailed information on how your business will affect the environment around it. How will you be disposing of waste? How much power and water will your business need? Some states require replacement of water used to balance the environmental load, so be sure to familiarize yourself with the environmental laws that could apply to you. You’ll need to provide all the details of how your business will impact the environment, as well as what you plan to do about it, to prove to regulators that you care and think ahead.
Distinguishing yourself from the herd is important as applications become more competitive. “We are most interested in the ‘why’ of it all” says Cameron Bravmann, Principal of Green Belt Strategies. “Your application needs to shine above the rest and highlighting your story is the most compelling way to do so.” Green Belt Strategies believes your narrative is the backbone of your application. Why do you want to enter the cannabis industry, and how do you plan to set yourself apart from competitors? Consider highlighting how cannabis has impacted your life, the lives of your loved ones, or how you wish to give back to the community with cannabis.
Staying Ahead of The Timeline
In order to successfully manage the application process, it’s important to understand your timeline. Be aware of when and where applications are due, ascertain how much thought each section will take, and prioritize tasks on a schedule that allows adequate time to complete everything before the due date. Which components of the application depend on completion of other parts? Are you able to hire or assign people from your team to complete certain tasks? Staying ahead of regulation “drop dates” will allow you to get an early start on your application framework, which can help move things forward faster. Give yourself extra time for application review and remain flexible to changes along the way. You may be facing regulatory or internal personnel changes that could impact the application process.
Work With Green Belt Strategies
Applications can be stressful, fees aren’t always refundable, and if you don’t know what you’re doing you risk losing both your application and chance to apply for a cannabis license ever again in that State. If you’re feeling overwhelmed and looking to streamline your application process, consider working with Green Belt Strategies.
During the 30-90 days your application can take, GBS helps you organize and strategize in order to highlight your personal mission, goals, and to differentiate you from the competition. Never go into the application process blind! Education and knowledge is essential, which is why hiring professionals to help you achieve your dreams is your best bet.