How to Win a Merit-Based Cannabis Business License

How to Win a Merit-Based Cannabis Business License

An increasing number of states have been opening application programs for cannabis business licenses, though this process differs between states. In Illinois and Missouri, license programs are run statewide, but in states like California, New Jersey, and New York, licensing periods are determined by municipalities. Oftentimes, applications are only accepted during a short window of time and are graded on either a merit-based or pass/fail basis. If the applicant fails to make the deadline due to discrepancies in their application, there is no promise they will get another chance. 

Despite challenges, there are steps prospective cannabis business owners can take to help ensure the success of their cannabis business application. The cannabis business licensing process can be complex, and to understand the breadth of this undertaking, business owners must expand on their knowledge base. Although there are no guarantees an application will be accepted, there are best practices that can streamline a cannabis business application to approval.

Building a Team to Win a Cannabis Business License

When building a winning team, a strategic cannabis business licensing consultancy can be the safest pathway to an approved license. These consultancies are tailored to the cannabis industry and are staffed with experienced individuals that ensure that the applicant has prepared the most concise and accurate cannabis business license application possible. In addition, a dedicated firm can mitigate risk of failing by assisting the applicant from the beginning until the end. This includes assessing who is part of the applicant’s team and how their participation could impact the application as a whole. 

In many cases, stakeholder status, age, criminal background, race, or ethnicity can make or break the application’s approval. In addition, a cannabis consultancy can ask critical questions to help the applicant succeed. These questions may include: 

  • How many licenses the applicant aims to obtain
  • Which jurisdiction would work best for the applicant’s business model
  • The strengths and weaknesses of the owner’s resumes/backgrounds
  • The applicant’s brand narrative
  • The sustainability and community impact of the proposed business

Eventually, the experienced cannabis consultants will review all relevant information and format the application to meet the state’s precise requirements. Then, when all parties agree on the final documents, the applicant will submit it to the governing regulatory authorities.

In addition to hiring professional cannabis consultants, it is important to source experts in other areas of the cannabis industry. A cannabis consultancy can help build a strong cannabis business application team which may include the following internal staff members or third-party consultants:

Lawyers and Legal Professionals

A strong legal team is essential when creating a qualifying application. Lawyers are paid to read all fine print from contracts and state regulations. The business relationship between all parties involved must be clear to minimize the chance of conflicts of interest. Cannabis business licenses, like any other business prospect, must meet state and industry standards. In addition to the federal restrictions, regulations can be dramatically different state-by-state. This presents a risk to those who might be expanding into multi-state operators.

Financial Advisor

An industry-specialized financial advisor is just as crucial. Application success depends on how clear the economic situation is presented. Applicants must demonstrate that their business goals are compatible with their financial resources. This process could include providing years of compliant financial documents for an existing cannabis business, and it is typical to require bank statements that outline any funding of business activities. Tax records showing good standing for the qualifying business and all entities involved is also a notable mandate. New businesses must be able to demonstrate profitability and responsibility, and also their ability to weather economic challenges. 

Architecture and Design

Cannabis operations must meet particular standards as it applies to the layout of their operational facilities. They must also meet the safety guidelines of governing officials, such as the local fire marshall and the state’s department of health. Prospective cannabis business owners must also account for essential business components such as video camera surveillance, limited access areas, and equipment to reduce smell and odors. By using a licensed architect with experience in the cannabis industry, applicants can ensure their architect is familiar with state-specific and local level cannabis building regulations.

Security Team

A significant portion of cannabis regulatory guides and budgets are expected to be related to security. Although the specifics can vary from state to state, applicants are often tasked with maintaining secure premises, preventing diversion, and protecting the transport of cannabis products. A successful security plan also includes information about the security systems to be used at the facility, including video surveillance, alarms, and access control.


In many cases, submitting an application requires a proposal for the real estate location. In addition to formatting the facility for operations, cannabis businesses must comply with cannabis-specific and zoning regulations. Understanding demographics, traffic patterns, locations of prohibited areas, and consumer behavior will assist in the prospective cannabis company’s efficacy.

Experienced Cannabis Professionals

To cement success, applicants must have an understanding of the life cycle of a cannabis business. If the proposed core team doesn’t have experience in the cannabis industry, it could present a real detriment to progress. Applicants will need to partner with those who are experienced with cultivating, producing, and dispensary operations to build an advisory team. Be sure to include ancillary services such as branding and marketing teams who know what works and doesn’t in these highly regulated markets. It will show the application scorers the proactive steps taken to ensure stable operations.

Designing a Cannabis Business Floor Plan for Licensing

As outlined previously, the first step in creating a successful and secure cannabis floor plan is to design, choose, and secure a commercial real estate location. This is important because it will prime applicants to take into consideration any potential logistical mishaps early. 

Secondly, applicants must consider the rooms, fixtures, and components needed to comply with all pertinent regulations and support their operations. Each area of the business floor plan serves a function of operations and requires differing design elements, influenced by varied levels of access and required security.

It is also essential to avoid errors that can be common in constructing the floor plans. One common mistake is not taking into account proper storage facilities. In addition, one should ensure that their cash vaults are placed in a location that is not susceptible to theft. This applies just as much to sensitive areas like those intended for the handling or storing of cannabis, currency, or sensitive information. This is where security professionals play a pivotal role.

Submitting an Application that Stands Out from Competitors

The application pool for cannabis applications is highly competitive. Applicants may be going against well-established entities, some of which are multi-state operators supported by big money. Luckily there are vital steps that can help ensure that the application makes a lasting impression.

Be Prepared With Precise and Measurable Detail

Often, there is only a limited period of time to write and submit a successful application. An essential step is building a diverse, multidisciplinary team with strong financial partners. During the application, applicants should emphasize the educational role the company will play. Prospective cannabis business owners should never assume they can’t win because they’re a small company. Instead, develop a comprehensive understanding of what it will take to make it to the finish line. 

Know the Law and the Governing Regulatory Authority

Laws are more stringent for cannabis businesses, and applicants should be prepared to comply with these complexities. It is imperative that cannabis businesses establish functional relationships with local and state officials, including law enforcement. If applicants are knowledgeable of the area’s cannabis voting record, they can strategically plan next steps, including prioritizing community education and engagement.

Understand the Local Community and Create a Positive Impact

Cannabis business owners should reside where they intend to operate and they should ensure that community outreach is prioritized. Applicants should become familiar with a state’s licensing structure and carefully evaluate how to make a positive change in the area where the business is to be located.

How Can Point Seven Group Help?

The team of cannabis consultants and professionals at Point Seven Group have worked extensively in the U.S. and international cannabis markets and are familiar with the unique challenges of the cannabis industry. Follow us on social media to stay up to date with more cannabis industry updates!

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