With cannabis becoming legalized across the country, the competition for limited state licenses and local permits is getting intense. Some jurisdictions award operations and retail permits through a complicated merit-based points system–so complicated that many potential businesses owners say it’s their biggest hurdle.
The scarcity of available permits, costs to get approved, and varying methods for tabulating scores from city to city means that barriers to entry into the cannabis industry are growing. No matter if you are a small business owner or represent a large corporate operator, there is a lot of skill and luck needed to win one of these cannabis licenses. Having an experienced advisor like BeGreenLegal by your side could make all the difference.
Why is There So Much Competition for a Cannabis License?
In order to fully understand the process of how marijuana licenses are awarded, you first have to understand that every state is different in how they approach cannabis regulations. In fact, almost every city and county has slightly differing laws about how permits are distributed. While states can grant licenses to businesses, it’s local jurisdictions that provide the individual permits that are typically required to set up a retail store, manufacturing center, and even cultivation farms.
In most states, cities and counties are responsible for determining how many retail permits they will grant, a number that will always be overshadowed by the overwhelming number of applicants. Many times this number is determined based on zoning laws, which further limits the opportunity and drives up costs to compete. For instance, California doesn’t allow marijuana dispensaries within 600 feet of a school, day care or other youth-focused center. For smaller towns, that can heavily restrict where a cannabis business may be allowed.
It’s easy to understand why competition is fierce when a city or county is only issuing a small number of permits, but receives hundreds more applications from hopeful cannabis entrepreneurs. What’s hard? Determining optimal locations for your business. BeGreenLegal will help you get on the right path to understanding which regions should be on your “consider first” list.
Elements to Winning a Marijuana Business License & Retail Permit
Some consultants will have you believe it’s easy to get a cannabis license. However, it takes effort, a thoughtful application, and a well-developed business plan. There are some elements of the application process that are crucial to know if you want your submission to be seriously considered by a city or review board.
1. Understanding the Scoring Rubric
Most cannabis business license applications are scored against a rubric: a rating tool used for evaluation. It’s important to know how your application will be evaluated in order to focus on the most important elements. Imagine if applications were scored on the ability to follow directions and you used red ink instead of blue, as instructed. What if you knew that one oversight would make a difference in your application getting approved? You’d go through your application extra-carefully!
Because every jurisdiction can develop its own scoring rubric for hopeful marijuana business owners to align themselves with, it can be difficult to create the perfect application–even if you’ve seen successful ones in the past. BeGreenLegal has experience working with these rubrics and with third-party “scoring companies,” and provides our clients with valuable insights as to how to submit complete and high-scoring applications.
2. When to Lease a Property and When Not To
Leasing a property to serve as your cannabis business’s location can be an expensive option, especially in California, so it’s a good idea to spend some time thinking about how to limit your monthly payments while your team gets the approvals you need to operate. The first step should be to study your project timeline, including all approval schedules for preparing and processing applications, and try to get as many tasks done before you sign your lease. Additionally, landlords are typically interested in seeing you succeed long-term, as it costs them money to have a vacant building and find new tenants, so asking for some concessions such as a few months of free rent, or reduced rates until approvals, should be expected.
If you are applying for storefront retail or other competitive licenses where points are given for local experience, it may be advantageous to try to partner with a property owner who already has a retail facility in a green-zoned area, and this may possibly be the only way you can win. However, business partnerships are also personal relationships that can go south quickly, so it may not always be the best idea, even if it means free rent.
BeGreenLegal can help you identify leasing opportunities and pitfalls–whether you’re considering a retail cannabis business, cultivation, manufacturing, distribution or a mix of all four!
3. Specific Requirements & Preferences
When a city, county or state determines it can accept applications for cannabis licenses, the application typically highlights what the regulatory agency would like to see out of the ideal applicants approved for a marijuana business license. On the state level, sometimes this means only accepting applications from vertically-integrated multi-state operators (MSOs), while on the city level it may mean searching for an experienced operator looking to expand. No matter the requirements of the municipalities you work with, it’s important to be sure to follow the guidelines as closely as possible.
4. Utilizing all Available Resources to Obtain Licenses & Investors
You may have unrealized resources–and BeGreenLegal helps clients identify them. For example, we’ve helped clients who own commercial property or green-zoned land who didn’t know their property offered a competitive advantage in terms of a marijuana business permit approval.
Another often untapped opportunity is partnership. Do you have access to funding, but not to property? Or, do you have the ideas, drive, and wherewithal to open a viable cannabis operation, but seek investors? BeGreenLegal has the depth of knowledge that only comes from experience, and we can help you identify all possible resources.
5. Don’t Waste Money on Unneeded or Premature Services
As consultants and experts in the cannabis industry, specifically the business side of operations, we have seen far too many clients spend money on unnecessary services. Before you hire a lawyer or a CPA to begin putting together a lengthy pro forma budget you should know exactly what you need and don’t need to get approved for a marijuana business license or permit. In most cases, a much simpler version of a pro forma budget is all that is needed to get started.
While some newcomers to the industry spend money on CPA’s, others hire lawyers at the very beginning, as opposed to an experienced project manager or technical cannabis strategy firm like BeGreenLegal. It’s a common misconception that licensing is legal work, when in reality it is actually technical. Because we know how complicated marijuana regulations have become, we encourage you to take advantage of all we’ve learned over the years. Don’t waste your money, or your investors’ money, until you have all of the information available to you.
Increasing the Chances of Getting Your Cannabis License
There is always going to be an application process when it comes to obtaining a marijuana business license. As the opportunity continues to be proven lucrative, we can expect more and more corporations and billion dollar conglomerates to join the party. BeGreenLegal can help you find your direction and provide you with knowledge that would have cost tens of thousands of dollars if you had hired a specialized consultant or lawyer.
As a top cannabis consulting firm in the US, we are committed to helping aspiring entrepreneurs learn how to compete for state licenses and city permits. While becoming licensed as a cannabis business and obtaining city permits is not easy, BeGreenLegal’s approach simplifies the process and gives our clients a greater chance of success–both in securing your cannabis license and building a profitable cannabis-based company. But, you can’t take advantage of our deep level of knowledge if you don’t call us. Don’t compete with the best; become one of the best when you follow our BeGreenLegal proven strategies.