Several states legalized adult-use cannabis during their 2021 legislative sessions, and while many industry hopefuls are eager to enter these new markets, most have not yet adopted regulations for cannabis business licenses.
So, what’s an entrepreneur to do?
According to Jay Czarkowski, co-founder of cannabis business consulting firm Canna Advisors, those looking to secure licenses in Connecticut, New Mexico, New York, Virginia and beyond can make plans now, while the rulemaking process is under way, to serve them well later, when the actual application becomes available.
“There are things one can do to stay ahead of the curve no matter where you’re at,” Czarkowski tells Cannabis Business Times and Cannabis Dispensary.
Here, he shares four ways entrepreneurs can prepare for the cannabis licensing process.
1. Secure real estate.
Czarkowski says it’s never too early to start thinking about a business’s location, especially in more conservative states, where municipalities could ultimately ban cannabis businesses from operating within their jurisdictions.
“There are always these folks that wait until the very, very end—way too late—to try to secure real estate, and that’s what sinks them at the eleventh hour,” Czarkowski says. “They just don’t have that piece covered, and you need that.”
2. Build community relationships.
Once a business secures its location, Czarkowski says the team should develop local relationships to earn the community’s trust. This includes the local planning board, zoning commission, city council and law enforcement.
“You’ve got to start somewhere, so pick up the phone or go down in person and reach out to local officials,” he says.
3. Recruit your team.
While most companies likely won’t start hiring employees until they have a license in hand, Czarkowski says startups should recruit partners with specific areas of expertise to help launch the business.
“Putting the team together now is good because when it comes time to apply, it’s one less thing to worry about and you already have those employees on board to help with the heavy lifting of the application itself,” Czarkowski says.
Make sure everyone on the team can pass a background check, he adds, and ensure they can be attentive to detail, which can help in completing the license application.
“A very simple strategy to a winning application is answering the question,” Czarkowski says. “A lot of times, people who are grading these applications are not experts by any means, but they know what the regulations are, and they want to look at application material that jives with the regulations. As simple as that sounds, it’s tedious and a lot of work, and not everybody does it.”
4. Get your finances in order.
“If you can have a solid business plan with solid financials to go out and show potential investors, now’s the time to put that together,” Czarkowski says.
Canna Advisors does cannabis-specific financial modeling for its clients that is tailored to each state’s specific rules and regulations, and Czarkowski says this provides applicants an advantage in the licensing process.
“The state’s not going to award a license to a group that they don’t believe has the ability to execute, … so having your finances in order and having the ability to have capital behind you is critical,” he says.