You Just Won Your Cannabis Business License – Now What?

Ten Steps To Building You Cannabis Business Post-License

Obtaining a cannabis license can be one of the most difficult (and rewarding) experiences in an entrepreneur’s professional life. You analyzed the market, regulations, either completed a winning application or comprehensive due diligence process, and completely and correctly submitted all required materials to the state and local municipality. And now you have the ‘golden ticket’! (Recent awardees in Delaware and Kentucky are experiencing this as you read.) 

I’m sure you’ve heard this before, but ‘failing to plan…is planning to fail’. Your goal is to be part of building the foundation and infrastructure of this new cannabis industry for your community. The road to full operational capacity requires meticulous planning, strategic execution, and a deep understanding of the industry’s unique regulatory landscape. Below, we’ll dive into the ten critical considerations to ensure a successful launch. 

 

1. Understand and Fulfill Cannabis Compliance Requirements 

• Revisit local and state regulations to ensure all compliance requirements are understood and will be met. 

• Hire or consult with a compliance officer or legal expert to assist with ongoing regulatory adherence. 

 

2. Develop Detailed Business Operational Plans 

• Create SOPs for all processes (cultivation, extraction, packaging, sales, etc.) tailored to industry standards. 

• Implement a seed-to-sale tracking system to ensure full accountability, transparency, and compliance. 

• Establish a robust security plan for your cannabis business that meets all state requirements, including facility surveillance, access control, and incident response.  

Strategy Tip For Operational Planning

You may have had to submit SOPs or a Security Plan in your application, but are they as robust and detailed as they need to be to actually operate? 

 

3. Build Out Your Facility and Prepare for Inspection 

• Work with architects and engineers experienced in cannabis facilities to ensure the space meets operational needs and regulatory standards. 

• Coordinate with pertinent contractors for timely build-out, including HVAC, lighting, irrigation, and other systems specific to cannabis production. 

• Schedule inspections to ensure the facility meets code and regulatory standards; secure final approvals before launching operations. 

Strategy Tip For Facility Inspections

This is most intense for cultivation, but there’s also POS systems, locks, cameras, and more, for manufacturers, retailers, and other phases of business. Do you need a C1D1 Explosion-proof Extraction room? 

 

4. Source, Install, and Test Equipment 

• Purchase or lease necessary equipment for cannabis cultivation, processing, packaging, and sales. 

• Install and test all equipment, ensuring functionality and regulatory compliance. 

Strategy Tip For Equipment Testing

It is common for there to be a line at opening day of a retail cannabis facility. Yes, you have a POS system and know how to use it. But does it work across four budtender stations operating simultaneously for nine hours straight?

 

5. Hire and Train Staff 

• Recruit cannabis team members for roles in cultivation, processing, compliance, security, sales, and more. 

• Develop and conduct training on SOPs, compliance, security protocols, and customer service as applicable. 

• Provide specific training on state and local compliance, including handling product, inventory management, and reporting. 

Strategy Tip For Staffing

Often overlooked is the development of culture. You can educate someone about cannabis. You can train someone in software. If your team isn’t philosophically ‘rowing in the same direction’, you’ll quickly be spinning in place. 

 

6. Establish Supply Chain and Vendor Relationships 

• Identify and establish relationships with suppliers for raw materials, packaging, and any necessary services (e.g. lab testing, transport). 

• Set up an cannabis inventory management system to track orders, storage, and supply to ensure smooth operations. 

Strategy Tip For Supply Chains

Ensuring upstream and sell-through efficiency is the best approach to cost reduction and consistent cannabis compliance. 

 

7. Finalize Marketing and Sales Strategy

• Finalize your business brand identity, packaging design, and product names that comply with state advertising laws. 

• Develop a compliant cannabis marketing plan targeting the appropriate customer base. 

• Determine retail or wholesale channels for product distribution and establish partnerships if applicable. 

Strategy Tip For Cannabis Marketing

Being able to effectively communicate your company’s values and distribute your offerings is the best way to optimize revenue. Between (6) and (7), you’re setting yourself up for your best potential profit margins. 

 

8. Complete Final Inspections and Receive Operational Approval 

• Undergo final state and local inspections to ensure business compliance before launch. 

• Conduct cannabis product testing with licensed labs to ensure quality and compliance with safety standards. 

• Obtain final sign-off from cannabis regulatory bodies, officially allowing operations to commence. 

9. Soft Business Launch and Gradual Scale-Up 

• Conduct a soft business launch to test all operational aspects (staff, inventory, technology, etc.) and make any necessary adjustments. 

• Gather initial feedback from cannabis partners and customers to refine processes, enhance the experience, and address any operational inefficiencies. 

• Once optimized, conduct a full-scale business launch with all marketing efforts in place. 

Strategy Tip For Staffing

It is common for cannabis businesses to open ‘under the radar’ (soft launch) while promoting a ‘Grand Opening’. This serves both purposes of ironing out any last operational wrinkles and garnering interest in your now operational facility.

 

10. Ongoing Compliance and Growth 

• Implement regular business audits to ensure continued regulatory compliance and operational efficiency.
• Explore additional cannabis product offerings, markets, or partnerships to scale and expand business reach within the bounds of legal limitations.
• Monitor regulatory changes and adjust operations accordingly to maintain compliance.

Strategy Tip For Ongoing Compliance

We often say, “You’re entering the ‘compliance industry’ as much as the cannabis industry. Diligence is never over here. As soon as you’re off or behind, you are at risk of getting your license revoked!

 

Tap Into Expertise To Start Strong & Stay Strong

These areas of focus will help you move from licensure to a fully operational cannabis business with a strong compliance foundation, effective operations, and scalable processes. Remember, compliance is paramount (alongside the pursuit of profitability). Prioritize regulatory adherence, invest in your team, and continuously adapt to the evolving cannabis industry. With diligent planning and execution, you can build a thriving and sustainable cannabis business. 

Feel like talking to someone who’s ‘been there and done that’ across a couple of decades? Reach out to our expert cannabis consultants today to discuss your needs and how our Startup Services may be a fit for you.