Cannabis Licensing Application Prep: 3 Foundational Elements
Three Foundations to Assemble Early in the Licensing Application Process
There are three key foundations to a cannabis business licensing application that are essential to prepare BEFORE your state drops a Request for Applications (RFA). We tell our clients that it is never too early to start your pre-license positioning, because an early start is the #1 way to increase your chances of winning a cannabis business license in a competitive market.
Early prep in these three areas will increase your likelihood of success, make the licensing application process run more smoothly, and ensure a timely, comprehensive submission.
Cannabis Licensing Application Foundations
- Business Plan with Corresponding Financial Model
- Property / Real Estate
- Team / Essential Roles
1. Business Plan & Financial Model
You must demonstrate to regulators that you will have a well-thought-out and well-capitalized business that can handle the uncertainty and tight regulations that are commonplace in new cannabis markets. Initial cannabis business consulting and industry education allow you to articulate your vision, assemble the right people and property, and map out an operations plan to meet your objectives.
Financial modeling allows you and your investors to understand the possible profitability of your business and view the financial implications of various business decisions made throughout the project. It is important to use realistic numbers and anticipate delays in order to budget for success. You won’t know how much capital to raise until you have a solid, realistic financial model done by someone who is experienced in dealing with cannabis business finances.
Real Estate with local zoning approval is one of the most important considerations for a cannabis operation. Securing a compliant property should be one of the first things you do after you’ve decided to apply for a license. You must understand what your local and state jurisdictions require and then acquire a property that meets those regulations. This step alone could take several months.
Working with the right people — a knowledgeable realtor and a local general contractor — will save you a lot of time and effort. Be sure to check your state’s cannabis statutes and regulations, any ordinances your locality has passed, and your local zoning code, as any of these may contain restrictions that you need to consider when selecting your property.
Many states or localities require that cannabis businesses be located a certain distance from specific locations, such as schools, places of religious worship, or childcare centers. Further, localities often require cannabis businesses to be in areas with specific zoning classifications. Your business plan and financial model will determine what type and size location you need, and what you should spend on buying or leasing property.
Demonstrating a strong, positive relationship with your host community is essential to obtaining a medical or adult-use (recreational) cannabis license. Application evaluators want to license businesses that are supported by their host community and have shown that they will be good neighbors. You should build relationships with as many people in your chosen community as possible and be transparent about your future business. Getting involved in your community during the pre-application phase can make your cannabis license application stand out from the crowd.
3. Team / Essential Roles
Having the right expertise on your team is a critical factor to success. Shaping a diverse, experienced team that also fulfills any special requirements that might be in the future licensing application, like a Medical Director or a Director of Security, is crucial for your application. Many states have extremely specific experience requirements that may make it tough to find qualified staff. Getting an early start on your staffing search will make it considerably easier to identify and recruit the best advisors, managers, and employees for your business.
More and more states are recognizing the importance of local ownership and diversity in the cannabis industry. Many states award extra points to applicants with substantial ownership by residents of their state, or for the inclusion of women and minorities in ownership and staffing. To maximize your chances of receiving a license, you should aggressively seek out qualified people from a variety of backgrounds to include in your business, particularly in ownership or management capacities.
Cannabis Licensing Application Guidance
Applying for and procuring a state cannabis license is not only a complex process, but a high-stakes endeavor. You might only have one chance at submitting an application, so success is your only option. Canna Advisors will partner with you to complete a marijuana business license application for your state’s particular regulations. Your submission will be crafted by an experienced staff who can help showcase your comprehensive skill set, your best ideas, and a thoughtful, consistent narrative to make your application compelling and unique.
We have an unparalleled track record of winning competitive licenses for clients. Contact us today to get started with your cannabis business licensing application.
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