The cultivation of a successful cannabis operation starts with a single crucial step: winning a license. However, even that first step involves a long process that requires time, effort, and expertise. This cannabis licensing guide will help ensure your business is a strong candidate for licensing.
If you’re hoping to win a license, the time to start preparing was yesterday. After all, advanced planning isn’t a luxury, it’s a strategy. Beginning as soon as possible gives you time to secure real estate, lobby local officials, and become compliant. Starting ahead of schedule is one of the smartest strategies for winning a license.
Along with proper preparation, effort, and a head start, our cannabis licensing guide will help your budding business nail the application and get licensed in no time.
Location, Location, Location
In any industry, real estate plays a huge role in business success. In the cannabis industry, that role is even larger. The majority of states require applicants to have commercial real estate locked into place, and a lack thereof usually results in the applicant’s disqualification.
Whether your business opts to buy or rent a space, our cannabis licensing guide suggests considering two primary elements. First, make sure your site is in a Green Zone — that is, a place where cannabis operations are allowed. Green Zones will allow you to narrow your search and stay compliant with local zoning regulations.
Then, evaluate the return on investment (ROI) of potential locations. This analysis of local competition, product demand, and other factors will reveal the most lucrative locations for your business.
Controlling Your Capital
On the financial side of the industry, most states want to see short-term operating plans and long-term financial sustainability. To achieve such sustainability, we suggest engaging with investors without compromising company equity.
Cannabis investors infuse your operation with the capital necessary to grow. Solidifying your investors early and continuing to engage with them builds a relationship that yields financial security. However, companies should avoid giving away too much equity in the process.
Especially in states with low start-up costs, operators may be tempted to award investors large shares of equity. Giving away too much up front can leave your business vulnerable if you need to pay employees in equity or fundraise again later.
Striking a balance between raising liquid capital and maintaining equity is crucial for successfully navigating the cannabis licensing process.
Assembling an Expert Team
A cannabis operation is only as strong as the team behind it. Putting together a core team of experts will, throughout the process of cannabis licensing, guide your business to future success.
Strategically selecting your core team based on business acumen gives your operation a competent and diverse foundation. Additionally, varying degrees and types of experience among your team looks good on applications. In particular, most states like to see teams with experience in ancillary cannabis businesses.
Operators & Management Staff
Outside of the core team, experienced cannabis operators and management staff bring more value to the table. Experts who understand the ins and outs of the industry and have multi-state experience can fill expertise gaps on the team.
Furthermore, your choice of operators and management staff may benefit your future goals. For example, some businesses choose to begin solely as dispensaries and eventually grow into cultivation as well. In these cases, operators with vertical integration experience in both areas look very attractive on applications.
Security & Legal Compliance
If there’s anything that can easily sink your business, it’s a lack of proper security and compliance. For this reason, our cannabis licensing guide, along with countless other blog articles, emphasizes the importance of such measures.
Anyone can write a security plan, and there are plenty of cookie-cutter templates available. However, these avenues don’t set you apart from the competition. A comprehensive, thoughtful, and robust security plan demonstrates that you understand the risks in the industry as well as how to effectively mitigate them.
That being said, don’t promise more than you can provide. If your plan is too ambitious or too expensive to implement, then the state will likely deny your application. Because of this, businesses should aim to design a plan that balances necessary security with financial viability.
Additionally, staying compliant with local and state regulations is crucial for remaining in business. In states that require METRC, the process can be confusing at first but is ultimately very effective.
If your state doesn’t require METRC, be sure to vet and test your inventory system thoroughly to avoid any costly errors. Also, look for a system that can easily be integrated with METRC should your state someday require compliance.
Navigating the dynamic landscape of local and state regulations can be exhausting and time-consuming. Here at Higher Yields Cannabis Consulting, we’re lucky to have Director of Compliance, Marissa Cortes, helping our clients stay on top of regulations.
Cannabis Licensing: Guide Your Business to Success
The cannabis industry is a difficult industry to start in, but advanced preparation can set you up for success. By following the strategies we’ve set out in our cannabis licensing guide, your operation will be well on the way to winning a license.
Are you looking to maximize your opportunity to win a license? Book a consultation and work with our crack team of seasoned professionals!