5 Tips For Creating a Winning License Application

Cultivation and retail experts provide top takeaways from the crucial application process.

2022 Cc 0060 F Fmt

2022 Cc 0060 F Fmt
Mackenzie Ditch Wilcox, middle, associate director of compliance/legal for PharmaCann, speaks during the session “Create a Winning License Application” along with Greg Huffaker and Debby Goldsberry at Cannabis Conference 2022, hosted at the Paris Las Vegas in August.
© LAS VEGAS EVENT PHOTOGRAPHY

Securing a cannabis business license is one of the most critical—and perhaps daunting—first steps in this increasingly complex and competitive industry. Over the years, Cannabis Business Times has interviewed dozens of experts from plant-touching cultivation and retail businesses both for articles and as a key part of the educational program at the annual Cannabis Conference. For the 2022 Launch and Expansion Guide, CBT has compiled five top takeaways CBT and Cannabis Conference have produced over the years.

1. Review local and state zoning and setback requirements before exploring and noting locations.

Mackenzie Ditch Wilcox, associate director of compliance/legal, PharmaCann Inc.

“The biggest hiccup I see happening with a lot of individuals is you can’t just do a standard real estate search like you would on Zillow or Redfin for a residential home, mainly because of the zoning restrictions and some of the setback rules that those search engines are not created to find. So, I always say that the first step should be to review the local and state zoning and setback requirements, as well as any other ancillary requirements. Some states require you to have parking. Some states require you to be not within ‘X’ amount of feet of a school—things like that.

“Understand those rules first and from there, if you’re going to do the search on your own, understand what areas of the town or municipality you can go to so you can start to flag those. And if you’re working with a broker, set those parameters at the onset so that you’re not spending excess time and money negotiating with landlords or sellers, and then you come to find out that you’re not allowed to operate or even apply there due to a restriction that’s beyond the standard real estate considerations. I’ve had multiple clients come to me after the fact and say, ‘We had this great property, and then there was a setback issue,’ or, ‘We didn’t realize there’s a daycare that’s in someone’s house, and that qualifies as a daycare with the state, and now we’ve spent all this money and time, and we can’t actually operate there.’”

2. Hire key team members to help with the application process.

Zachary R. Kobrin, partner, Akerman LLP

“Having the right team in place is vital. Without any emphasis on one expert over the next, a successful application, especially in a limited-license state, likely will require a spectrum of knowledgeable people in the room, including:

  • “A strong application writer to prepare your application and help craft your story. Do your research with any application writer or consultants who specialize in cannabis license applications. Just as you would with a lawyer or accountant, ask for references. Also, understand where the application writer’s strengths and weaknesses lie and where they have found success. If a writer says they have won applications in a specific market, find out when and for whom.
  • “Having a good regulatory lawyer to ensure your plans comply is imperative. Find someone who understands regulatory and administrative law and how to navigate the bureaucracy of a state or local government. It is less important to have someone in the actual state than it is to have a lawyer who has worked with the state or has knowledge of the state regulatory regime.
  • “In many markets, engaging a lobbyist or a government relations expert is fundamental. It may not be necessary to have a lobbyist to submit an application, but once you submit your application, it is smart to have someone because, depending on the market, everyone else might.
  • “Lastly, you need a quarterback. Applications are not just a group of narratives, and you will likely have many people contributing to it. There’s the writing, the legal and the real estate, just to name a few key areas. Your quarterback can be your application writer, consultant, lawyer or someone internal. It doesn’t matter who, as long as you have someone who understands the application process and can keep everyone on track with their respective roles to ensure the application is successfully completed and submitted on time.”

3. Budget for service and consulting fees and unexpected costs.

Hope Wiseman, owner, Mary & Main dispensary 

“I think one of the unexpected costs for us, and I think for a lot of people in the cannabis industry, are those business services, [such as] consulting fees, legal fees. You don’t realize how much you have to do. And if you want to do it right the first time, pay for it up front. It can be a little bit jarring because [the requirements are] different than a [non-cannabis] business getting up and running, [where] you’re not going to need as much help compliance-wise and you’re not going to need as much paperwork.

“I would save 10% to 15% of your entire budget as a contingency for those things. You’re going to do your best to make a budget that’s accurate, but that 10% to 15% I believe is a really good buffer.”

4. Submit the application ahead of deadline and have someone with expertise on hand.

Erin Alexander, former associate general counsel, regulatory & licensing, Cresco Labs

“If the application is due on Sept. 1, leave yourself three to four days to mess around with that portal to have everything ready to submit. Because I can tell you from experience, there will be unforeseen issues with digital submissions. And states, municipalities—what have you—they’re very strict about how often and when you can ask them questions. So, sometimes, it’s the night the application is due, and [if] you’re having problems with the portal, you may be in trouble because you may not be able to get an answer to the problem you’re experiencing.”

5. Protect your intellectual property.

Omar Figueroa, Attorney, Law Offices of Omar Figueroa

“Establish a trade secret protection plan. Don’t disclose your trade secrets or SOPs in your application. Identify them as trade secrets. You don’t have to describe SOPs in detail. You can also submit a redacted copy (without the trade secrets) to regulators in case they have a public record request. “Employees are free to quit and go to the competition, but you can keep them from walking away with proprietary information by making them sign nondisclosure agreements that give you legal recourse.”

Find more key tips and insights about the licensing application process on CBT’s website here.

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