March 30 Webinar: Recording and Q&A
Thanks to everyone who joined us for our webinar “Getting Started in a New Cannabis State: 4 Steps to Take Now” on March 30, 2020.
If you missed the webinar or want to refer to some key points, you can view the recording below.
We were able to answer several questions at the end of the session, but there were a couple of questions that we didn’t have time to cover in our hour together. We address those questions below.
Question from Brandon J.:
“Location is the biggest issue I have seen because of legalities. Any tips on helping with this?”
Brandon, you couldn’t be more right about the morass of legalities. Getting through it starts with organizing your business and funding, narrowing locations, and deciphering zoning.
To successfully navigate the legal morass, you need one or likely more attorneys for various tasks that will get you set up to secure a property. If you haven’t already, you’ll want an official business entity before securing a property, for which you might want an attorney to help draft your operating agreement and other formation documents. If you’re seeking outside investment, you’ll likely want an attorney to assemble investor offers and agreements. When securing a property, you’ll want an attorney to review your real estate agreements, and likely, to help with the next tips.
Even if a state has legalized cannabis use, production, and sale, some states allow local counties and municipalities to ban cannabis establishments within their jurisdiction. Often a media outlet (or multiple in a piecemeal fashion) will release a list for your state with the counties and cities that allow and disallow cannabis business. While online articles can’t always be trusted to give the full story, they are a good starting point. To find out whether the city has in fact banned cannabis (and for which license types specifically), you’ll want to check out their local ordinances, which can usually be found online or by calling the city clerk.
My last tip in finding a location is to understand the zoning restrictions completely in the state and particularly at the local. At the state level, statutes and regulations often provide a distance barrier between certain sensitive uses, such as daycares, schools, parks, and churches. At the city level, an ordinance might limit down to the exact neighborhoods or streets cannabis businesses are allowed to or disallowed from operating on. Employing a local real estate agent can help in the search, but I would warn against putting full faith in an agent that’s not familiar with the cannabis industry. If a locality doesn’t have cannabis zoning ordinances yet, this may be an opportunity for advocacy!
While there’s no foolproof plan for dodging legal hurdles, these tips can help get you going and set you up to handle surprises with confidence. If you have more questions, please reach out or sign up for an hourly consultation here.
Question from Yajaira W.:
“If doing cultivation – what types of expertise should you recruit”
Yajaira, recruiting can be an intimidating step for any new business, especially in the emerging cannabis market. While often in newly started businesses employees will take on multiple roles at least in the beginning, there are a few roles we think are crucial to operating a successful cultivation.
Like any business, there needs to be some overall management. A Chief Operating Officer (“COO”) oversees all functions that have to do with the operations of your business, which in this case is cultivation. From managing the entire cultivation staff to the buying and selling logistics for product, the COO will oversee all departments to ensure the business is running efficiently. Ideally, this role would be filled by someone who has high-level management experience within the cannabis industry but someone with similar experience from another highly regulated industry could also be a great fit. Cannabis cultivation knowledge is a huge plus but your COO will also be helping hire the rest of your cultivation management who will embody the bulk of the operational knowledge.
The cultivation staff is the backbone of any cultivation operation. When first starting your business it is very important to hire a Director of Cultivation early in the process. This person will be in charge of your cultivation so it is crucial to include them when planning out your facility layout and cultivation methodologies. They should be able to guide you through what best equipment to use and even room sizing and facility layout. When starting a new cultivation it is very important to find someone who has previous experience planning out and operating a commercial cultivation facility from a legal market. This person would ideally have some education in horticulture or plant sciences with hands-on cannabis management experience. The Director of Cultivation should also be able to help guide you on any other key cultivation staff needed. For example, cultivation technicians that handle the day-to-day plant care, trimmers in-house for constant harvests (can be outsourced as well), and inventory managers to make sure your inventory matches what is in your tracking systems.
Other roles that are important to think about when starting a cultivation business are a Chief Compliance Officer, someone who is familiar with laws and regulations and can help create training materials to keep your business compliant, and a Director of Security to plan out and enforce the security of your facility and safety of your workers. One other thing to consider when staffing your facility is outsourcing. This will only work for some positions like accounting, bookkeeping, and HR which can be done off-site and will not necessarily require a full-time position at the beginning.
Although any and all staff is crucial when starting a new business like a cannabis cultivation, there is some specific expertise you will want to hire early on like your Chief Operating Officer and Director of Cultivation as well as other positions to consider like Chief Compliance Officer and a Director of Security. We understand that starting a business in a new market can be tough; if you have more questions, please reach out or sign up for an hourly consultation here and we will be happy to assist further with your planning!