FREQUENTLY ASKED QUESTIONS
STARTING A CANNABIS BUSINESS
Why should I use a consulting service to develop my application instead of doing it myself?
Developing cannabis specific content associated with an application requires years of industry experience in order to fully understand industry standards and best practices. In addition, the content is written by technical writers who understand the grading process associated with obtaining highly competitive licenses in a regulated industry. Having a technical writer draft your application may make the difference in successfully winning a license in some of the most competitive markets in the country. While there is a cost associated with hiring a consultant team to develop your application, working with the right team can be the difference between successfully obtaining licensure and a large sunk cost. Our team has over 20 years of combined experience drafting content for state applications. Our team can provide you with the technical writing aspects that will ensure you have a competitive application.
How to get a cannabis license?
Starting a cannabis business is different in each country, state and local municipality. However, almost every location that permits the operation of a cannabis business requires a cannabis business application. No two application processes are alike; each area has unique regulatory requirements and grading or scoring criteria. The best place to begin when starting a cannabis business is to research the specific regulations in the country, state, or county where you wish to operate and to visit the specific regulatory licensing body’s website for further information. Once you’ve decided the type/location of the business you will pursue in this industry, our team is here to help you each step of the way.
When are cannabis licenses made available?
Many places in the United States have different license availabilities, depending on population, location, and demand. Certain regulatory bodies may host an open market model, where you can apply for licenses on your own timeline and the market does not limit the number of commercial cannabis licenses the regulatory body issues. This license type is typically less expensive to apply for and maintain, and includes markets such as those in California, Oklahoma, Massachusetts, and Michigan.
Other regulatory bodies may have a competitive market model where a license application submission period is open to the public for an award of a limited amount of licenses on a specific timeline. Businesses can apply within this timeframe and typically, the winners are announced three to four months after this submission. These licenses are extremely competitive and have limited availability, such as those in Ohio, Missouri, and Pennsylvania. Point7 has worked on both types of applications and can lead you in the right direction, from choosing a specific market to assisting with the application.
How long does writing and completing an application take?
Writing a cannabis business application can be a daunting task. Whether you’re a new or existing operator, the application writing process can be demanding of time, taking anywhere from three weeks to three months, depending on the length and specifications of the application. Each application comes with its own set of challenges that Point7 can guide you and your team through, no matter where you stand in the application process.
How much does it cost to start a cannabis business?
Each cannabis business has its own unique set of startup requirements and can vary based on a number of factors. Some factors that have the ability to affect startup costs include the size and scope of the business model, the proposed location’s unique local market factors, the current physical state of the proposed location, and the compliance requirements from the regulatory body. Our team of financial and operational experts can help you understand how much it would cost to start your specific cannabis business model in your specific market.
How much money is needed to apply for a cannabis business license?
Most cannabis business licensing applications have some form of ‘Proof of Capitalization’ requirement that determines exactly how much money is needed to apply for a cannabis business license. Each state or local jurisdiction can determine its own minimum capital requirement, but those amounts don’t necessarily reflect the true cost to start up the business. Sometimes the application requires the applicant to determine the projected startup cost, and then show sufficient capital for the applicant’s projections. There is a common myth that you need over one million cash to apply for a cannabis business license or start a cannabis business, but our team has proven time and time again that undercapitalized teams with core competencies can still secure cannabis business licenses.
What is the typical Return on Investment (ROI) on any cannabis venture?
The typical ROI on any cannabis venture is largely dependent on the actual business performance as well as the market’s unique political, economic, social, technology, legal and environmental factors. Each of these factors can affect ROI potential in addition to the leadership team’s ability to execute a strategic plan of capturing market share and growing the customer base.
What license type has the best Return on Investment?
It is impossible to say which license type has the best Return on Investment because each state has a different licensing process and different business models created through the state’s legislation. There are noticeable trends across different business models. For example: Processor licenses typically show a higher Return on Investment; Dispensary licenses are typically dependent on market supply and demand factors so Return on Investment varies; and Cultivation licenses are typically a higher Return on Investment in states with a limited license count.
What can you do to prepare for a state license application?
If you are interested in pursuing a state license application, you should begin by familiarizing yourself with the state regulations regarding medical or adult-use cannabis. Generally, state regulations will provide definitions and guidelines regarding the state license application and what license types will be available for submission. The regulations will also define which state agency has the authority to administer and enforce the regulations. Once you are familiar with the regulations, you should familiarize yourself with the specific state agency. Frequently, the state agency will issue emergency rules that are also applicable to the state license application. It is also beneficial to speak to an attorney as he/she may have a strong understanding of your state laws and how they will interact with the new regulations and the application process. Our team has interpreted state regulations for ten states and will help guide you through understanding the specific regulations and what it means for your business.
Are there things I could be doing to increase my chances of winning?
Once you are familiar with the current regulations you should assess whether you can meet the requirements outlined in those regulations. For example, do the regulations have a social equity component? If so, should you incorporate it into your application? Do you have enough initial capital to open a facility or will you fundraise? Being prepared to answer questions such as these may increase your chances of winning a license. Most states want applicants to show that they will be able to open and operate a facility within one year from receiving a license. Our team has answered these types of questions for various state applications. Let us guide you through the meticulous details of the application.
How much do your services cost?
Our services vary depending on how much assistance you need in the application process. If you have a strong understanding of the regulations and requirements to open a business, you may only want to purchase our templates, which provide relevant regulations and generic responses to the application. These are very affordable and customizable to your business. Individual templates range from $1,250-$7,000.
If you need more help to develop your application and/or need advice on creating documents, such as a business plan, our general consulting services may be more beneficial to you. Under this purchase option, Point7 will draft customized narratives for each application question based on information you give us. This option can cost from $25,000 upward depending on the services you require. Whether your needs are simply to help streamline the process, or whether you need a full roadmap to complete the application, we have the service that will fit your needs.
What are typically the pieces required to compete for a state business license?
While requirements differ from state to state and from city to city, you can generally expect the following to be required in almost every application process:
Proof of Funding
Business Formation Documentation
Lease or Property Ownership Documentation
Qualification of Owners
Community Benefits / Community Engagement Plan
Safety and Security Plan
Floor Plan and Site Plan
Staffing Plan / Organization Chart
What is the biggest mistake made in cannabis business licensing applications?
Misunderstanding the timeline and the minimum requirements needed to build a successful application is often the biggest mistake made in the application process. Some application processes are released with only a 30 day application period. That being said, you should be preparing well in advance of the application period, as 30 days is not enough time to build a team, acquire real estate, and put together a “winning” application. While every process is different, most teams should allocate at least 90 days for pre-licensing tasks associated with the application process. Our team will create a timeline to ensure you stay on track and don’t miss a deadline, or submit an incomplete application.
POINT7 APPLICATION TEMPLATES AND NARRATIVES
What makes Point7 qualified to consult on and develop my application?
Point7’s team of consultants form a strong foundation of expertise in cannabis business operations, business management, finance, creative design, marketing and branding. Our team has over 30 years of regulated cannabis business experience and a successful track record in application consulting, writing and development. We have won both state and local cannabis business licenses for our clients in the following states: Arkansas, California, Colorado, Michigan, Missouri, Ohio, Oregon, Pennsylvania and Maryland.
Who would benefit from the template option?
This option is specifically designed for professional teams with the ability to build upon proven base content.
Are Template Exhibits fully compliant to applications, regulations and Department FAQs?
Template Exhibits are specifically written to align with the specific state agency that regulates the application process. Template Exhibits will be updated as the Department releases answers to FAQs.
How will I know what to customize and will I have an opportunity to ask questions after I receive my documents?
Each template arrives with an accompanying guidebook indicating where further customization is recommended. Our fulfillment team will be available for calls to field any questions regarding template use.
Will templates be at maximum specified page limits?
Each template is composed of narrative content as well as customizable text to allow for specific content to be added by your team. Due to the nature of customization, Template Exhibit page counts will vary.
When will I receive my templates and in what format will they arrive?
A template release date will be determined shortly after the application is released. Templates will be released in advance of the submission deadline, allowing your team ample time to customize and fine-tune each template to your unique strategy. Documents arrive in Microsoft Word format.
Do I need to buy the full application bundle or am I able to choose specific narratives?
You are able to choose which narratives you need from both California and Michigan! Customization and review packages are also available.
GENERAL CANNABIS QUESTIONS
Where is cannabis legal in the United States?
Cannabis is still federally illegal in the United States. Many states have come to pass medical or adult-use legislation with varying degrees of regulation and oversight. Each state is operating on its own timeline, the legality status can change seemingly overnight if you are not tracking the movement of bills, propositions, and legislation. Our team is dedicated to keeping you informed with our United States Cannabis Market Research.
Where is cannabis legal in the world?
Cannabis is still illegal in most of the world, with only a few countries regulating and taxing the sale of the plant. Worldwide medical and recreational cannabis legislation is progressing at a rapid rate as more and more countries see the inherent value in the plant and perceive the misguided banning of the substance. Curious about cannabis legislation in specific international markets? Check out our International Cannabis Market Research.