As the saying goes, you don’t need a weatherman to know which way the wind blows. However, when it comes to the future of cannabis in the U.S., an experienced prognosticator can help predict the next state likely to launch a legal cannabis market or provide insight to help you win an industry license. However, passing a law is just part of the story. We’re here to help you find the facts and identify opportunities.Continue reading
As cannabis brands now number in the thousands, the importance of distinguishing your offering is growing daily. It’s vital to define yourself through creatively calculated choices that pique consumer interest. The best cannabis branding and marketing creates an indelible impression of your product in the psyche of the consumer. From a certain shade of yellow to a particular font or the words you use, there are infinite ways to mold your image. That’s good news. The challenge lies in putting it all together in a meaningful, cohesive, and effective fashion.Continue reading
Cannabis Legalization and Emerging States – New York, Texas, New Jersey, and Mississippi
Lawmakers and policy advocates have been facing tremendous obstacles related to the COVID-19 epidemic and the resulting government closures. Facing budget shortfalls in connection to these public health measures many states and municipalities are exploring their options for additional revenue sources, including establishing or expanding existing cannabis markets. This report addresses the emerging cannabis markets in Texas, Mississippi, New Jersey, and New York.
New York – An Emerging Cannabis Market
New York lawmakers were set to consider expanding access to Adult-use cannabis in the Governor’s budget bill 1617-C early on in 2020 until COVID-19 necessitated the closure of government offices and a stay at home order that effectively ended the legislative session early. However, legalization of cannabis for Adult-use in 2020 is not entirely off the table. As the state is now facing a revenue shortfall it may see lawmakers return for a special session to address budgetary shortfalls and the means to address them. As cannabis business licenses and businesses provide additional revenue for the state it is possible to see the legalization issue pop up in these discussions. 1617-C goes into great detail about the framework and requirements for establishing an Adult-use market in the state and whether it is picked up in an emergency session or in the next legislative session, the bill showcases the priorities for the framework for an adult-use market.
Assuming New York keeps most of the language of the bill that deals with cannabis, New York will be establishing the Cannabis Control Board and Compliance Council.
The following cannabis license types would be available if the legislation passes:
- Cultivation, Processor, Dispensary, Distribution (designed for existing Medical Cannabis Dispensaries)
- Cultivator Processor
- Small Business Adult-use Cooperative Adult-use Distributor
- Adult-use Retail Dispensary Microbusiness
- Delivery Nursery
- Adult-use On-site Consumption
Priorities for Processing Privileged License Applications:
- Is the applicant a social equity applicant?
- Will the applicant be able to maintain effective control against illegal diversion of cannabis?
- Will the applicant be able to comply with applicable state laws and regulations?
- Will the applicant be ready, willing, and able to properly carry on the activities for which the license is sought (including with help from the social and economic equity and incubator program)?
- The applicant possesses or has the right to use sufficient land, buildings, and equipment to properly carry on the activity the license is for or has a plan to do so if applying as a social or economic equity applicant
- The applicant qualifies as a social and economic equity applicant or sets out a plan for benefitting communities and people disproportionately impacted by enforcement of cannabis laws
- Good moral character
- Labor peace agreement (25 or more employees)
- Contribute to communities disproportionately harmed by enforcement of cannabis laws
- Environmental and energy impact of the facility Follows all other regulations drafted by the Board
- Is a registered organization with the state of New York?
An examination of the language of the proposed bill clearly outlines the importance New York is placing on social and economic equity in its cannabis market.
Texas – Growing Support to Legalize Cannabis
Texas lawmakers are seeing increasing pressure to consider cannabis legalization from groups like Texans for Responsible Marijuana Policy. Texas officials, now facing budget shortfalls, are gradually considering options for decriminalization and potential legalization. That is not to say that 2020 holds much promise for significant movement toward legalization beyond greater potential interest. Current CBD retailers still face raids from officials even with CBD being a legal product.
New Jersey – Looking to Legalize Adult-Use Cannabis in 2020
New Jersey lawmakers placed SCR 183, a ballot initiative to amend the state’s constitution to legalize adult-use cannabis. If passed it requires the state to establish a Cannabis Regulatory Commission and would mandate that the tax on retail sales of cannabis not exceed the state’s standard sales tax of 6.625% with municipalities being afforded the option of imposing a 1-2% sales tax. In a healthy economy, the state could potentially see tax revenue of $95 million per year according to projections from Bridge West CPAs, who also note that if the state were to follow in the footsteps of states that expanded access to adult-use before and imposed an additional 10 % excise tax the tax revenues in a healthy economy could potentially be as high as $143.6 million per year.
Mississippi – 2 Deceptively Similar Medical Marijuana Initiatives On the 2020 Ballot
Policy advocates successfully collected enough signatures to get Initiative 65 onto the ballot which would legalize medical cannabis in Mississippi. State lawmakers voted to include Initiate 65A on the ballot which would also legalize cannabis for medical use for significantly fewer qualifying conditions than Initiative 65 while affording the state greater control over the potential medical cannabis industry market the Initiative would establish. Concerns have been raised that Initiative 65A has been added to the ballot to potentially split the vote and defeat both measures by confusing voters, which it has the potential to do. If Initiative 65 passes it is likely to establish a medical cannabis market similar to its predecessors with an opportunity of social equity applicants.
Conclusion – Emerging Cannabis States and Markets in 2020 and 2021
Though 2020 has been a rough year for cannabis legalization efforts it has none-the-less shown that even states that have previously been reluctant to consider legalization are now entertaining the idea. Mississippi could signal a positive shift in the legalization movement and provide opportunities for established multi-state operators to expand if Initiative 65 is successful. New York, though somewhat of a long shot at this point, does indicate with the language of 1617-C that this progressive state is making a concerted effort toward social and economic equity at a time when the call for it has never been louder.
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Cannabis yield is about more than quantity. Plant vigor and the desired prominence of cannabinoids like THC and/or CBD also play a role. If you’re looking to maximize your cannabis yield, you’ll also want to consider the presence of certain terpenes and flavonoids that essentially distinguish an individual strain. With that in mind, a general understanding of seeds and genetics is essential for every cannabis grower. We’ve broken down some of the basics to serve as a growth medium for your eventual success.Continue reading
Any cannabis operation — whether you’re cultivating extracting, infusing, packaging, or dispensing — has dozens of moving parts. A thorough planning process ensures a more efficient operation that can maximize your cannabis yield in terms of plants and profit. Professional planning to make the best use of your space can help guarantee that your cannabis operation runs efficiently. We’ve got a few tips to help your business bring in the best return per square foot.Continue reading
How to Invest in the New and Rapidly Expanding Marijuana Market
To date, more than half of the United States has some form of legalized cannabis program, which has led to a boom in marijuana entrepreneurship. Thanks to the trends in marijuana legalization, there is now a whole new industry for investors and entrepreneurs to explore business and investment opportunities.
And with hemp recently legalized on a federal level with the passing of the Agriculture Improvement Act or 2018 Farm Bill, industrial hemp joins medical marijuana and recreational marijuana as a new sector worth looking into for business ideas or investments. In this guide, we will discuss how you can invest in the new and rapidly expanding marijuana market.
Become a Marijuana Entrepreneur
Starting your own cannabis business is ideal for entrepreneurs who prefer to be on the front lines of the industry. If your state has both legalized recreational and medical programs, you have more opportunities to explore. There’s also the industrial hemp sector, which is predicted to become a multi-billion industry.
There are a few primary kinds of marijuana companies – marijuana growers, cannabis retail stores, extraction labs and manufacturers, and ancillary product and service providers. Marijuana growers are also referred to as cultivation or grow facilities. Cannabis retail stores or dispensaries are ideal for the entrepreneur who enjoys interaction with the consumers. Ancillary product and service providers are businesses that provide relevant cannabis services, such as marketing agencies, security companies, payment processors, and so on. This is ideal for the entrepreneur that prefers not to “touch” the plant.
Because the legal cannabis industry is fairly new and highly regulated, becoming a business owner will come with its challenges. Most states with marijuana programs, whether medical, recreational, or both, will have a limited number of business licenses to award. Therefore, the application process was designed to be rigorous and highly competitive. Licensing is merit-based, and securing a coveted application will require the expertise of cannabis advisors and industry experts.
Invest in Cannabis Companies Listed on the Stock Exchange
Not all states have a marijuana program, leaving many hopeful investors wondering how they can take advantage of the explosive cannabis marketplace. The good news is that business ownership isn’t the only channel for you to participate in what is predicted to be a highly lucrative industry. Beyond business ownership, you can still profit from cannabis by investing in marijuana stocks.
Between 2014 and 2018, the cannabis industry has more than tripled in worldwide sales – making it a $10.9 billion industry by 2018. Experts predict that the global cannabis market will reach over $66 billion by 2025. With forecasts like these, it’s no wonder the marijuana industry is attracting more and more investors.
Investing in the stock market exchange is an excellent way for you to enter the marijuana scene as a beginner. It’s also the ideal place to start if you have plans to put up your own cannabis business in the future. A good place to start is to put your money into marijuana businesses listed on the stock exchange. The following are the types of cannabis businesses that you could potentially invest in:
- Agriculture technologies
- Ancillary products and services
- Biotech companies
- Consulting services
- Consumption devices
- Cultivation and retail
- Cannabis products and extractions
- Holding companies
- Industrial hemp
- Organic farms
Before you invest in anything, do your research and understand the potential risks. Be thorough in your analysis of the opportunities available to you. This will help you narrow down your list.
Tips on Investing in Marijuana Stocks
Some may say that marijuana stocks or pot stocks are some of the most volatile. However, they are not any more unpredictable than any investment in the stock market. Therefore, approach investing in marijuana stocks with the same principles you would for any kind of stock. It requires the same diligence to research the company and identify whether its poised for growth. Pay attention to trends, monitor the news for relevant changes in the industry, and understand all the factors that may impact the company’s future profitability. Here are essential steps to take before buying cannabis stocks:
Understand the different types of cannabis products – There are two primary types of marijuana products – medical marijuana and recreational marijuana. Generally, there are more business opportunities in the recreational cannabis or adult-use marijuana sector. Medical marijuana typically only applies to patients with qualifying conditions; therefore, use and purchase is only allowable by prescription.
You should also understand the difference between cannabidiol (CBD), tetrahydrocannabinol (THC), and industrial hemp. CBD is only legal on a federal level if it was derived from hemp and has THC levels of no more than 0.03%. The psychoactive THC remains illegal. The federal government has recently legalized hemp, which is said to have over 25,000 industrial and commercial applications.
Evaluate the company’s potential – Look at the strength of the company’s management team. What is their growth strategy and competitive position?
When analyzing a marijuana company, learn more about their value proposition to see if the company can demonstrate what differentiates them from the competition. While many cannabis businesses are still in their early stages and may not yet be profitable, it will help to check if they already are. You can do this by following the company news. A strong balance sheet is also a good indicator of near future profitability.
Understand the risks – Because the legal cannabis market is still in its infancy, and rules and regulations are ever-changing, it’s crucial to understand the legal and political risks of investing in pot stocks. The marijuana industry dynamics shift rapidly because the marketplace is still learning and evolving. This is where it pays off to monitor cannabis laws, industry news, market trends, top marijuana stocks, and investing strategies.
Cannabis business ownership isn’t the only option for you to invest in the cannabis industry; you can also become a stock investor and buy pot stocks from the marijuana companies listed on the stock exchange. But before you start investing, it’s important for you to learn as much as you can about the cannabis industry, the different business types, and marijuana products. To lower the risks of investing in cannabis stocks, evaluate the company’s potential for growth and profitability.
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In cities and states where cannabis is legal in some form, governments are introducing social equity programs to address the lack of diversity in the cannabis industry. Local and state lawmakers are weaving social equity programs into legislation, thereby enabling minorities and those impacted by the war on drugs to pursue cannabis business opportunities. For decades, advocates for cannabis social equity and justice have pushed to create equal access and fairness in the cannabis industry. As with most social change, results take time. Below are some of the measures states have taken to grow cannabis social equity programs, and a few ways in which they still fall short.Continue reading
States tend to take two steps forward and one step back to arrive at cannabis legislation that can win broad approval. However, lawmakers in Arizona, Florida, New York, Pennsylvania, and Vermont listened as voters have been voicing their increasing support for recreational marijuana legalization. As new states pave the road to recreational marijuana legalization, you need to be ready to put your pedal to the metal when the race to apply begins. We have some advice to help you start mapping out a route now to secure a license when the light turns green.Continue reading
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The How-To Guide to Cannabis Licensing
The increasing number of states passing legislation for the legalization of marijuana and the removal of hemp from the Controlled Substances Act has led to heightened interest in participating in the cannabis industry.
As the cannabis marketplace evolves, stigma surrounding the plant fades, and consumer demand continues to rise. There has never been a better time to participate in what is predicted to be a multi-billion marketplace. However, because marijuana legalization varies from state to state, you will need to familiarize yourself with your state’s specific cannabis program and its rules and regulations. State laws establish who may cultivate or sell cannabis without prosecution under federal law.
Before you get started, you will need to determine the type of licensing, permitting, and documents your marijuana business requires. The different types of cannabis businesses will have their own set of requirements and application processes. In this guide, we will discuss the types of medical marijuana business licenses, how to apply for a cannabis license, and the benefits of working with cannabis consultants to get a license. We will also discuss the business opportunities in the industrial hemp space.
Types of Marijuana Business Licenses
There are various types of marijuana businesses and therefore, different license types. Before you begin the cannabis application process, you need to determine the type of cannabis business you are planning to launch. If your state has both a recreational and medical marijuana program, you have more opportunities to explore. Investing in the recreational cannabis space means access to a broader audience and not having to deal with the paperwork and regulations associated with medical cannabis.
However, if your state does not have a recreational or adult-use marijuana program, an investment in medical marijuana also comes with its benefits. As a medical marijuana business, you would be providing patients with qualifying conditions access to cannabis products that will improve their quality of life.
While you may want to start a cannabis business that deals in both medical and recreational marijuana, you may also have to refine your decision by choosing the specific type of business. Keep in mind that the terms for marijuana businesses are different from state to state. For example, a growing facility may be called a cultivation center in a different state, while a dispensary will be referred to as a retail store by another state. The following are the most common types of cannabis business licenses:
Dispensary – Consumers are most familiar with marijuana dispensaries because they are the brick and mortar establishments or retail stores where they can physically purchase marijuana products. A cannabis dispensary or retail marijuana business is ideal for the entrepreneur who enjoys facing the consumers. Keep in mind that most states have strict regulations for dispensaries, such as locations that must be more than 500-1000 feet from schools, churches, etc.
Cultivation – There are outdoor and indoor growing facilities, also known as cultivation centers. However, outdoor growing facilities are only established in states where the climate and state restrictions allow for outdoor marijuana production. Whether indoors or outdoors, growing facilities are usually required to be located away from schools, parks, libraries, or any other establishments that cater to minors.
Because most state laws typically require that cultivation operations or cannabis production facilities be in remote locations, you can enjoy benefits like security and potential for future expansions. Cannabis production facilities require a significant investment because space, infrastructure, equipment, and soil costs can add up. The growing facility will also need proper ventilation, climate control, irrigation control systems, and the right lighting.
Extraction – Currently, the majority of marijuana sales are concentrates and cannabis extracts. With this kind of demand, starting an extraction operation is a good way to enter the cannabis industry.
Using special extraction systems and skilled extraction technicians, extraction labs take the marijuana plant and apply industrial solvents, heat, and pressure to the plant to extract pure compounds. You will also need to decide which of the many extraction and refinement methods your extraction lab will focus on; this will determine your equipment, labor, laboratory, and licensing requirements.
Processing and Manufacturing – Processors and manufacturers are licensed to purchase marijuana to process it and manufacture it into marijuana products like oils, tinctures, ointments, edibles, and so on.
Distributor – Marijuana distributors are licensed to transport cannabis products from a marijuana establishment to another marijuana establishment. For example, a distributor may transport marijuana from a cultivation facility to a dispensary.
Vertically Integrated Cannabis Business – Vertical integration in the cannabis industry refers to a cannabis company that controls more than one stage of the cannabis supply chain. Achieving vertical integration means consolidating the cannabis production processes by not only growing and processing the product but also distributing it to other businesses or individual consumers.
The Industrial Hemp Program
Hemp has been removed from the Controlled Substances Act, making it legal on a federal level under the 2018 Farm Bill or Agriculture Improvement Act of 2018. Industrial hemp is used for over 25,000 industrial and commercial products, which makes it a cash crop with the potential to be a highly lucrative industry. However, hemp, like marijuana, is regulated by states, and farmers, researchers, and entrepreneurs will still need a license to operate.
How to Get a License to Grow Hemp
The Agricultural Marketing Service of the U.S. Department of Agriculture (USDA) has set up the national hemp growing program. While you can apply for a federal license at the USDA, they won’t be available in the states that ban the commercial growing of hemp. As of the time this article was written, South Dakota, Mississippi, Idaho, and New Hampshire are states with these laws.
The USDA will be accepting license applications year-round, with licenses valid for one calendar year. The USDA has also established a rule that all hemp plants will be tested at a Drug Enforcement Administration-registered laboratory to ensure their THC levels remain within legal limits.
Basic Requirements for a Cannabis License Application
While marijuana legalization and industrial hemp laws vary from state to state, those that have cannabis programs typically have an application process that involves some common factors that application “judges” will require. The following are the more common requirements for cannabis business application:
Business Plan – Marijuana program regulators will need to determine your readiness to operate a legal cannabis business. Therefore, your business plan should be a document that demonstrates your ability to run a productive and profitable marijuana business that follows relevant regulations.
A cannabis business plan follows the outline of traditional business plans. They will have sections like the executive summary, industry overview, market analysis, competitive analysis, sales and marketing plan, ownership structure, operating plan, and financials.
For a cannabis business, your business plan should also include any information that supports your marijuana business idea, such as cannabis market studies and descriptions of your products. This is why it’s crucial to study state-specific cannabis regulations.
Standard Operating Procedures (SOPs) – The application reviewers and analysts will need to determine your ability to maintain a safe and secure facility. You’ll need to create clear and actionable SOPs that outline your processes, explain why they are performed, and who is expected to execute the processes. The goal is to prove that you can stay on top of the constantly shifting rules and regulations of the cannabis industry.
Your SOPs should also detail your procedures for health and safety issues, equipment and supplies, and emergencies. Each procedure should be mapped out in detail. Pay attention to any language or wording that may cause miscommunication, which may lead to accidents or legal action.
Financial Plan and Proof of Funding – The application process itself can be costly, with some states requiring thousands of dollars in application and license fees. Therefore, you need to demonstrate that you have strong financials to not only proceed with the application process but to also build and launch your intended cannabis business.
The costs of launching and operating a fully licensed marijuana business requires strong financials and a legal source of funding. Beyond the hefty application fee and renewal fee that range between $5,000 – $10,000, there are the real estate costs, ongoing costs to operate, and staffing. You also need to factor in business equipment, security and surveillance systems, marketing, and capital requirements.
Cannabis Real Estate – Know your local regulations before investing in real estate. Before applying for a license, you will need to have secured cannabis-friendly property that meets all the requirements of your type of cannabis business. For example, your dispensary should be in a location that complies with the state’s zoning restrictions, which likely involve operating at a specified distance from a school.
Keep in mind that not all properties are considered “cannabis friendly.” While your state may approve your location, there’s the reality that your landlord may not approve. If you intend to rent a space, be upfront with the building owner about the nature of your business. This will help avoid problems in the future. Higher Yields has an in-house cannabis real estate team that can help you find the perfect property.
Background Checks – You will need to provide proof that you don’t have any felony convictions. Whether you are applying as the owner, or you are an investor, licenses are typically not granted to those with a criminal past.
For example, applicants for the USDA Hemp program need to provide an FBI criminal history report. You cannot receive a hemp production license if you have been convicted of a controlled substance-related felony in the last 10 years.
Why Work with Cannabis Consultants to Help Get Your Cannabis Business License?
What makes the cannabis business license so rigorous and time-consuming is the dozens of pages and sections that you will need to fill out. However, completing all the sections of the application form isn’t the only challenge. Some states only have a limited number of licenses to award. The state licensing authority may use a scoring methodology that ranks applications and awards licenses to those that perform the highest. This means that meeting the minimum requirements is typically not enough for you to win a coveted license; you need to ensure your application stands out.
Cannabis consulting services provide you with everything you need to accomplish your cannabis application. Here’s what you can expect when you leverage the skills of an experienced team of cannabis application writers:
Meet Deadlines – Some marijuana license applications are massive documents composed of dozens or hundreds of sections. Completing and submitting an application is something that cannot possibly be done overnight. On average, you will need at least 4-6 weeks to complete the application.
Cannabis consultants help you avoid common mistakes that many make when tackling the complex cannabis license application process. Because cannabis licensing consultants have vast experience in winning marijuana business licenses, they know to never underestimate the time it takes to finish the application.
From the moment you ask for their help, they will create a timeline that plans out every aspect of the application. Meeting deadlines is one of the most impressive qualities of expert cannabis application writers. The ability to complete applications in a timely manner comes from years of experience and detailed knowledge of state cannabis laws and regulations.
Competitive Content Thanks to Specialized Skills – Cannabis business applications are massive compilations of documents that require the expertise of all aspects of a cannabis business, from the business plan and SOPs to facility design and financials. Therefore, the best way to approach cannabis licensing is to leverage the expertise of consultants who make it their mission to ensure you’re awarded a license.
Cannabis consulting companies have a team of marijuana experts that specialize in different fields of the cannabis industry, including tax accounting, compliance, real estate, facility design, and so on. Because they have in-depth knowledge of each state’s licensing system and approval process, they have the skill to complete each section of your application properly. This minimizes the risk of getting your application rejected over a technicality.
Expert Writing and Research Skills – Some applications have word limits for each section. This is where the services of an expert cannabis technical writer bring the most value. They will use clear, concise language that will demonstrate in-depth cannabis expertise and your business’s potential to have a positive economic impact.
Qualified technical writers are not only skilled writers but also thorough researchers and diligent proofreaders. As experienced cannabis application writers that are knowledgeable in your state’s marijuana business rules and regulations, they will be careful to write in a manner that meets the expectations of your city or state. And as meticulous proofreaders, they will double- and even triple-check each section for inconsistencies, grammar and punctuation errors, and to ensure nothing is missed.
Demonstrate Profitability and Compliance – The goal of any good cannabis application writer is to prove that you will be a productive and profitable marijuana business operator. They will answer the tough questions surrounding your business in areas like security, storage, taxes, accounting, compliance, insurance, marketing, legal protections, and so on.
Cannabis application writers will also ensure that the content is free of any biases. Many people who attempt to accomplish the application on their own may not realize that answers that are too passionate may hurt their chances of being awarded a license. While it’s done with good intentions, the panel reviewing the applications don’t want biased opinions or humor; they want your application to demonstrate your technical understanding of the processes and operations of running a cannabis business. More than anything, they want to determine your business’s potential for profitability while remaining compliant to state marijuana policies and regulations.
Competitive Edge – If your state is still in the process of legalizing recreational marijuana or still refining its medical marijuana program, a cannabis consultant can help you get a headstart on the competition. A pre-license assessment can help you identify your gaps, weaknesses, and areas where you can improve to ensure you’re ready when your state opens the application window for business licensing.
Each state will have its own rules, policies, regulations, and restrictions when it comes to the cannabis licensing process. Lack of understanding of state-specific laws, licensing information, and the complexities of the marijuana business application process can lead people to underestimate the required timelines and resources.
It’s beneficial to seek the expertise of professional consultants who have a comprehensive understanding of the industry. Many don’t realize that business license applications may be dismissed due to a technicality, such as an incomplete section or missing documents. Because the application process itself can be time-consuming and expensive, it would be a shame to lose what may be your only shot at winning a license because you attempted to do it on your own. Therefore, working with a cannabis consultant when applying for a marijuana license should be approached as an investment.