Compliance & Regulations, Front Page

Cannabis License Application Basics: How to Prepare Before Applying

November 13, 2018 / By 3C Team

The process of preparing and submitting a cannabis license application is usually quite daunting. It can also be incredibly competitive, to put it mildly. The copious amount of detailed documentation that the licensing body demands within an application, combined with deadlines and dates that always seem to jump around can create a high-stress situation where time becomes your enemy. Being prepared and staying agile is critical to put keep your project on the right path to be awarded a coveted cannabis business license. Applicants must be prepared to hit the ground running when, and sometimes even before their state, city, or country announces the framework and dates for cannabis application submittal. The following information will help guide your pre-application work.

 

Determine the Who, What, Why, Where and How of Your Cannabis Business

Become very clear on exactly what your proposed business will do. Will you cultivate, manufacture, distribute, and/or sell cannabis directly to consumers? Perhaps you are in the business of laboratory testing or extraction, or maybe industrial hemp is your dream business. When you begin to articulate your proposed business, you will start to define boundaries, limits, and industry-specific definitions for your business that become crucial information during the application process.

Strategically start building your team. Your business cannot be carried on the shoulders of one person, no matter how knowledgeable or dynamic. Building a strong management team that is comprised of well-rounded professionals with complementary skill sets is a key step that must be started early on in the process. The government officials that review your cannabis license application are looking for groups of people who, when working together, can successfully operate every facet of the proposed business. For example, an applicant seeking a cultivation license cannot rely solely on a team of expert cultivators; the application must also demonstrate that the business has an array of professionals with a breadth of experience operating within a regulated industry.

Cannabis application licensing bodies seek to know practically everything about the people involved in your operation. Having this information prepared and ready to go will save valuable time during the application window. What you do not disclose in the application, licensing bodies will discover on their own. Make sure there are no surprises about your team that will come to light during the application process and throw your business into panic mode, possibly scrambling to replace a key member. Do a background check on all owners and partners, no matter how small. It is better to find red flags within your own team than to have the regulating body find them. Gather tax returns from all owners, write personal and business bios for all owners, and make sure everyone is ready for a high level of scrutiny. Applications will invariably ask for this information and it is crucial that you already have as much pertinent information as possible. It does not hurt to note any philanthropic work or donations made by any parties involved in the process.

Determine, as specifically as you can, where you intend to operate your business. Government agencies issuing licenses want specifics on your cannabis application. If your business can pinpoint exactly where it is planning to operate and give details about the location that demonstrate compatibility with your operation, you will have an advantage over applicants that only refer to their location in vague, uncertain terms. In fact, some licensing bodies, when there is a tie in the scoring process, will give preference to the applicant who has a location already secured in the properly zoned area. In some states, business licenses are attached to a specific piece of real estate making securing compliant property beforehand not just preferred, but essential.

 

Hire Expert Guidance

Hiring an experienced cannabis consultant well before a license application period opens has two distinct advantages. First, experienced cannabis consultants have navigated the licensing process numerous times and know how to provide your business with the edge it needs to be considered for licensure. Second, experienced cannabis consultants will ensure that you are not leaving out any of the essential information and can also provide guidance related to industry best practices for all aspects of business planning in addition to the application process. Get a good lawyer that you feel comfortable with because you will be working with them consistently throughout the entire process.

 

Deep Dive into Applicable Regulations

Keep in mind that even if you are working with a consultant, it is the team you build into a business that is ultimately responsible for the success or failure of the application submittal for a cannabis business license. As such, you need to become educated on all municipal, state, and federal (if not in the U.S.) cannabis regulations that will potentially affect the operations of your business. Regulations are plentiful and detailed and researching regulations and designing your business in the pre-application phase to comply with them is critical. The officials who read your cannabis business application are looking to grant licenses to businesses that have demonstrated that they are aware of, and will meticulously comply with, all of the articulated rules. While consultants will know what to look for and how to meet or exceed the applicable regulations, ignorance of regulations is an application killer. In short, know the rules that you are expected to operate within so you can demonstrate in your application that choosing your business is the best choice.

In addition to familiarizing yourself with applicable regulations, get to know your local regulators. It is beneficial to get out into the community of your proposed operation, to know the people on the ground, and find out who the regulatory players are. Authentically involving your business and ownership as team players within the larger community will demonstrate a healthy foundation for a future relationship.

 

Business, Facility, and Investment Planning

Knowledge of the community will help you understand how your business will best operate within it. That will have to be clearly articulated in your application, so it is best to always be crafting your vision for your business. Write an inspirational mission statement and articulate your vision. Focus on the unique circumstances that surround your proposed business and the local community. Your goal, after all, is to operate cooperatively and successfully within a larger context. A successful applicant must demonstrate knowledge of what that context is rather than preparing boilerplate statements disconnected from the community. Along with this same vein, you could develop a social equity and diversity plan which demonstrates how your business will provide jobs to underserved members of the community. Write your executive summary through this same community-focused lens, and you will be well on your way to a strong application. An experienced cannabis consultant can usually assist you in writing strong business documents.

As mentioned earlier, determining your proposed location well in advance of applying for a license is critical for success. Researching and acquiring real estate that is properly zoned and cannabis compliant can be deceptively time-consuming. Acquiring real estate only to find that regulations do not allow for your particular operation is a waste of both time and money. Hire an architect to develop blueprints or drawings of all proposed structures. Applications sometimes require these types of drawings and this process can sometimes take more time to produce than the length of the application window.

Finally, make a good investment in your business and hire attorneys and accountants who you get along with and that have strong reputations. Your competition is undoubtedly receiving guidance and advice from professionals, so thinking you can get by without a team of professionals is a huge mistake. Put in the time early on to create multiple pitch decks for internal use and for investment opportunities and work to secure adequate capital from owners and/or investors. Strong applications require evidence that businesses are adequately funded and ready to hit the ground running.

Crafting a winning license application is a tough process that requires thoughtful planning and articulation with a strong team to execute each step along the process. As soon as a business is conceived, applicants must detail what the business will do, who will lead it, where it can legally operate, how it will operate in compliance with all applicable laws and who will fund development. Staying up-to-date with the latest regulations and application requirements is critical to creating an application that demonstrates that the business can meet or exceed all requirements. Hiring an experienced consultant ensures that all application details are accounted for and industry-wide best practices are incorporated in each aspect of business planning. 3C has navigated the application process hundreds of times across the country in 30 U.S states and territories, and in 13 countries across the world. We know what it takes to give businesses the edge they need to not only stand out in the application process, but to lead the industry in profitability, compliance, and safety.

Considering applying for licensure? Contact 3C today to learn more about how we can guide you through the process.

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