Interest in winning a cannabis license increases as legalization rapidly spreads to new states. Winning and maintaining a license requires significant time, capital, and education. Without sufficient education about cannabis licensure, potential licensees risk burning time and capital in an unsuccessful attempt to win a license.
Excelsior College has assembled cannabis industry experts to share their tips on how to win and maintain a license. These insiders have experience with licensing and regulatory compliance. Find five of their tips below:
Community Connections Are Vital
“Have actual connections to the community you want to do business in. It is good from a moral standpoint, but it is also good for your business for you to have roots and connection to the area you are serving.” – Katie Reiter, Veteran Cannabis Licensing Consultant
Successful cannabis licensure requires the development of support from the community, elected officials, and regulators who need to know your business will be a good neighbor. Your licensure application must demonstrate deep community ties.
Conduct community outreach if your business is new to an area. Meet your neighbors at civic meetings and learn about their concerns. Sponsor a no-obligation community gathering to foster goodwill. Once genuine connections are established, educate neighbors on your plan to apply for a cannabis license. Explain why you will be a good steward of the community if you win a license.
You should also connect with elected officials and regulators at the local and state levels. These relationships provide insight into the elements of a winning application. If a regulator is concerned about an issue like on-site security, verify that your application communicates an effective security plan. Relationships with government officials provide an opportunity to address their apprehension in your application.
Build an Expert, Diverse Support Team
“Be flexible, stay informed on the regulations, have a strong team and expert advisors to help you stay on track to achieve your goals. It’s a constantly shifting legal landscape.” – Danniel Swatosh, Co-Founder & CMO, Humble Bloom
Build a robust team of advisors before starting the application process. These advisors need experience applying for licensure in highly regulated industries. Cannabis experience is important; however, it is not a paramount requirement. Strive to hire top talent, even if it comes from outside of the cannabis industry.
Regulators want to know you have a team of advisors in these disciplines: finance, legal, design, construction, cultivation, manufacturing, retail and security. You may also need specialized advisors. Help regulators understand how your robust team will be able to reliably fund your business and successfully implement your business plan.
You should also hire for diversity and report it in your application. Regulators want to know if your team includes women, people of color, people with disabilities, and veterans. Hiring for diversity is not only a good business practice, it can also help you win a cannabis license.
Be Prepared for the Application Process
“Really understand the application and what the application is asking for. Don’t just pull up another state’s application because they are all different.” – Kris Krane, Co-Founder & Senior Advisor, 4Front Ventures
Needless to say, experience winning a cannabis license is helpful when applying for a new license. However, a winning application in one state does not guarantee success in another. Legal states have different application rules and you should understand them before applying in a new state.
Several states approved vertical integration of licensure. Vertically integrated licensure requires winning and maintaining licenses throughout the entire cannabis supply chain. Conversely, other states approved horizontal integration of licensure and specifically prohibited possession of every license in the supply chain.
States also have varying lengths for application submission periods. You should know the timeline for submitting an application.
Your Business Plan’s Budget Must Bend
“Be overly capitalized if you can. Expenses come from places you wouldn’t imagine” – Naomi Granger, CPA, MBA – Founder, National Association of Cannabis Accounting and Tax Professionals
Applying for licensure is expensive. Licensure fees can cost hundreds of thousands of dollars. Some states require capital on hand during the application process.
As a standard practice, you need a business plan. How will you fund real estate, salaries, supplies, security, and other costs? Some states require financial projections in the licensure application. You need a solid business plan before applying for licensure.
Your business plan should include a budget for licensure consultants. You will need sufficient capital to pay these consultants for the duration of the application process. Without a proper budget, you could spend all of your capital before the application is finished.
Regulatory Compliance Is a Maintenance Game
“Don’t just promise to comply, show evidence to prove that you can comply” – Katie Reiter, Veteran Cannabis Licensing Consultant
Your licensure application will require the submission of standard operating procedures (SOPs) for maintaining regulatory compliance. Regulators need to know how you will maintain compliance after winning a license. Without a strong plan, you risk losing your license after winning it.
A regulatory compliance team writes your SOPs and trains staff on how to follow them. This team will also liaise with regulators during compliance inspections. You should build a strong compliance team before applying for licensure.
Do You Want to Learn More?
Excelsior College’s Cannabis Industrial Advisory Committee (IAC) includes leading cannabis industry experts who have experience winning cannabis licenses and maintaining regulatory compliance. IAC members developed cannabis control curriculum for Excelsior College, which offers a 9-credit Graduate Certificate in Cannabis Control for professionals interested in moving up or entering the field.
Click here to learn more about Excelsior College’s cannabis control certificate program.