Cannabis License Application Horror Stories
What Could Go Wrong? How Applications Turn Bad
To paraphrase Arrested Development’s Lucille Bluth, “It’s one application, Michael, how much could it cost?” As it turns out, quite a lot!
Throughout Canna Advisors’ decades of cannabis licensing experience in over 38 different states, we have seen our fair share of application horror stories and mismanaged cannabis business plans. All of which showcase to us the essential need for consultants with cannabis industry knowledge to better guide prospective applicants through the ever-changing (and often, intentionally confusing) license application process. And the costs of not staying on top of state applications can be detrimental, even devastating, to an applicant’s license pursuit.
No Availability for Your Chosen Cannabis License Type
Say you are passionate about having an extensive outdoor cannabis grow operation. You have done everything to prepare for this, including reaching out to the right vendors, getting security overlays, and running financial modeling, only for the state to announce, the license type you want will not be offered.
This has happened on numerous occasions. A state agency will say one thing, make promises earlier on in the process for laying the groundwork for licenses to be issued, only for the fateful day to come (or near) and the licenses to be issued have been changed, delayed, or not even made available, with no expectations set for when the licenses will be offered. Within this nightmare scenario, it’s vital to have a consultant to rely on who can guide you on best practices, strategies, and practical steps to take on pursuing an alternative license or waiting and seeing what would be in the prospective applicant’s best interest.
Documentation Requirements Can Be Deceiving
A word of advice which we have found to be universally true in any cannabis license pursuit—err on the side of needing more than less. Sometimes, states will offer an exhaustive checklist of everything that is required for the application, including all of the supplemental materials needed such as operating plans, community impact plans, or background checks and leases for a property. Other times, states will withhold that information until days before the application window is set to open. And in some rarer instances, states will say one document is recommended but not required, only to, in the application window itself, reveal that said document is, in fact, required. Worse still, sometimes states will only upload updated forms which need to be submitted to the application mere hours before the application window opens.
Document Overload Can Creep Into Applications
These documents can sometimes be simple, one-page forms that any individual can fill out with relative ease on their own, yet others require notarization, attorney redactions, and even plans which can near 100-pages in length. Here, there is the practical balance of an individual’s time and that of a consultant’s knowledge and experience with supplemental documents. While many can write an entire energy and environmental plan, for instance, not everyone can devote the time and energy to doing so. Nor scour through 300-plus pages of state regulations. This is where a consultant can serve as a resource and boil these down to what is essential to know, what is recommended, and what does a prospective applicant have to do as soon as possible.
Pre-Payment Fees Can Add Up
One thing is always a certainty, regardless of what state you are hoping to operate in—the state will want some money. We have yet to find a state that doesn’t want to cash in on the cannabis business once a market opens, but if you find one, you will need to let us know! States, however, do vary on how much it will ultimately seek to collect from not only applicants but also licensed cannabis-business owners. Some states will offer reduced fees for applicants who qualify as social equity applicants (but not always), while others will waive or defer fees for others such as individuals with past cannabis convictions, veterans, or distressed farmers (but again, not always). And this is just for the application fees, which are usually non-refundable while the state will later tack on more fees for the license itself, which itself can vary based on license type. An example of this can be seen across New York’s cannabis program where a retail dispensary licensing fee is $7,000 while one with a consumption facility rises to $10,000, and then we have cultivators which can see licensing fees reach over $100,000.
Cannabis License Fee Ambiguity Is Common
States will not often make it clear when or even where these fees are due and to whom, or how they can be accepted. The worst scenario, which we have seen countless times, is a prospective applicant filling out their application, then having to either pay an astronomical fee at the end of the application or pay one later to even have their application be considered. Of course, this knowledge can be better attained through a consultant’s diligence in where and how to pay the necessary fees to the state.
How to Avoid A License Application Horror Story
All of this is just scratching the surface of what we have seen in states over the years. To summarize, it is why a cannabis consultant can be so valuable in helping to navigate often troubled waters because the last thing you as a prospective applicant want to experience is hidden surprises or unknowingly submitting an application which may be immediately disqualified due to a simple mistake.
Contact Canna Advisors to cover your bases and avoid your own application horror story.