Cannabis Business Licensing
Most industries require various licenses, permits, and registrations to do business. In the cannabis industry, those requirements are intensified because it’s such a heavily regulated industry. In the cannabis industry, licensing is particularly complex because compliance requirements vary from state to state and are fluid depending on your business’s category and the city or county you’re operating and selling in.
When obtaining a cannabis license, you really only have two main options, apply and get awarded a license or purchase a license on the secondary marketplace, 420 Licensing can assist you navigate the licensing requirements in your area. View cannabis licenses for sale.
420 Licensing, Your Cannabis Business Licensing Experts
In order to operate lawfully, you must meet all the cannabis business license requirements, and 420 Licensing is here to help.
It’s extremely important to pay close attention to local regulations. But, unless you’re an attorney, a lot of the requirements are hidden in legalese and can be hard to discern. That’s where we come in. We have the experience and expertise needed to ensure your application is meets or exceeds the localities requirements and get your cannabis business license approved the first time. Our expert team is made up of attorneys, consultants, investors, and industry insiders who have the knowledge and experience to help our clients succeed with their cannabis businesses. We help with the following:
- Zoning analyses to check properties before taking the next step;
- Business plans tailored to each client’s unique needs;
- Regulatory compliance;
- Attendance at all agency meetings required in the jurisdiction;
- Custom operating plans based on your local and state requirements; and
- Coordinating and processing the licensing application.
Working with an expert can come in handy when you’re dealing with some of the more complicated laws surrounding opening a cannabis business. For example, did you know that even though running a cannabis business may be legal in your state, you might run into roadblocks at the city level? California’s Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA) is the perfect example of this as it provides local jurisdictions with the right to control what activities are allowed in their individual jurisdiction. So some cities in California require a local cannabis license, while others may ban your business altogether.
What You Need for Licensure and How We Can Help
When applying for your cannabis business license, you will need the following items that our team of experts can help you prepare:
- Business plan —A well-constructed business plan is essential and is commonly required for a cannabis license. Regulators are looking to see whether or not you’ve made concrete plans for how you’re planning to operate and grow to ensure your plan aligns with all relevant regulations.
- Standard operating procedures (SOPs) —Standard operating procedures make up the daily activities of your business. In your cannabis license application, it’s crucial to let regulators know you’re planning to handle all processes in a way that lines up with the cannabis regulations in your area.
- Strong financials — This is another very important requirement. It takes a pretty penny to get a fully licensed cannabusiness off the ground. This is why many applicants seek out investors to help pay with application fees, the property purchase and any build-outs, employee costs, marketing, etc. Licensing agencies want to ensure you have sufficient funding to get your business up and running. If they don’t see this, your application likely won’t get approved. Our expert team of marijuana business consultants has experience helping cannabis companies develop strong financial plans.
- Background checks — Most states require a background check during the licensing process because regulatory agencies don’t want legal marijuana to fund criminal activity. You only get one shot at a background check, so working with an expert marijuana consultant to identify and address any potential red flags is a worthwhile investment.
Frequently Asked Questions
What Are the Basic Legal Requirements for Business Licensing?
Whether you’re opening up a cannabis business or a grocery store, the same basic legal requirements must be met but will vary by industry and location, including:
- Business formation — Incorporating your company or creating an LLC with the state is essential because it protects your personal assets from any debt or liabilities you incur due to your business.
- Tax ID number —Your federal tax identification number or employer identification number (EIN) is what the Internal Revenue Service (IRS) uses to identify your business for anything tax-related.
- Sales tax permit — All retailers (whether they deal in physical or digital goods, online, or offline) who collect state and local sales tax must have this permit.
- Other permits or approvals — As you’ll soon find out, there are a lot of permits associated with opening a business. Permits include food preparation, signage, zoning, and land use. Other additional permits and approvals can vary greatly from one jurisdiction to another, which adds another layer of complexity to the licensing process.
What Are the Requirements for Cannabis Business Licensure?
Cannabis business license requirements also vary from state to state and even between cities. For instance, some states hold an open application period during which they provide many licenses, while others are more restrictive and have an extremely low, single-digit limit on cannabis business licenses. Restrictions also apply to residency and background — people with criminal records might not be eligible.
Which Department Handles Cannabis Licensing?
Depending on what state you’re operating in, you might need to file your paperwork with your state’s secretary of state’s office, while others work with local licensing agencies.
Take Nevada as an example, where the Department of Taxation is in charge of licensing and regulating recreational and medicinal marijuana statewide. But, in California, cannabis owners have options on who to apply for licensing with, including:
- Bureau of Cannabis Control — This is one of the main agencies that regulate commercial cannabis licenses for both medical and recreational use in the Golden State. The licensing it’s responsible for is limited to certain businesses, like retailers, testing labs, distributors, and temporary cannabis events.
- CalCannabis Cultivation Licensing — This agency handles licensing for businesses that cultivate medicinal and recreational cannabis in CA. It’s also involved in managing the state’s track-and-trace system, which records the movement as cannabis products move through the distribution chain.
- Manufactured Cannabis Safety Branch — This subsidiary of the California Department of Public Health (CDPH) is responsible for regulating the cannabis manufacturing business, including anyone who makes and sells cannabis-infused edibles for medicinal and recreational use.
As we mentioned, your cannabis license requirements will also vary based on your business category, whether you’re a cultivator, manufacturer, investor, or seller. Take a look at the following examples illustrating how licensing differs based on the category of business:
- Cultivation — Cultivation requires a significant initial investment and rigorous requirements for licensing, including a vigorous site plan review.
- Retail — Some states require retailers to provide adequate product as well as building security. Others may limit the amount of product that you can sell to one person, as well as put pricing restrictions in place. In Nevada, cannabis business owners must have at least $250,000 in unencumbered liquid assets that can be converted within 30 days after being asked to do so.
- Edibles — Some states require people who manufacture edibles to cook and maintain their product in a commercial kitchen, including their cannabis butters and oils.
- Investors — People who want to invest in the cannabis industry also might have specific regulatory and statutory regulations to follow. In Colorado, for example, people face detailed requirements before they can legally invest in a cannabis business.
420 Licensing Can Help
It’s no secret that starting a business in this highly regulated and competitive industry is quite a challenge that requires a lot of planning, knowledge, and preparation to grasp and abide by all the legal requirements. But, by doing your due diligence and partnering with a knowledgeable and reputable cannabis business licensing company, like 420 Licensing, your path to licensure will be a lot smoother. Our company will also assist you through the lifetime of your business operations to ensure you are constantly staying up to code and in compliance with laws and regulations in this ever-evolving field. 420 Licensing is here to help you navigate the cannabis licensing requirements in your area to put you on the fast track to getting approved and opening up shop. Contact us today, and let’s get started making your cannabis dreams a reality!