Getting a marijuana vendor license

How to be a Marijuana Vendor – Getting a Marijuana Vendor License

December 12, 2019 0 Comment

How to be a Marijuana Vendor – Applying and obtaining local and state marijuana vendor license is perhaps the first and the most crucial part of getting started. 

The process of filing application towards the license is a tad bit complex and requires a comprehensive plan with the application, that will highlight the complete operational procedures, building plans, security designs, job descriptions, operations manuals, financial projections, marketing plans and time tables of the prospective marijuana business setup.

Steps to apply for cannabis retail license

  1. Check your state procedures: – Familiarizing with the state procedures, where you wish to start your marijuana business, is highly important. Most of the applicable cannabis retail license application requirements will be easily found online.
  2. Identify your business loopholes: – Post researching the state’s procedures, go through your dispensary plan to identify any problem areas, if any. This is helpful because these loopholes (like age, residency requirements of owners/partners or criminal convictions of any of your team members etc.) are likely to get your application rejected, so you better make corrections.
  3. Complete paper work: – Although time consuming, but every bit worth it. Complete your paper work in detail, providing adequate supporting documents (depending upon your state’s requirements) and submit them to the appropriate authority for review.
  4. Consult state licensing board/agency: –Once the review process is done, you will be required to meet the state licensing authority, in person for consultation. It’s important that all key personnel make the visit as important biometrics like fingerprinting requirements might be demanded. This is also the time to pay licensing fees, if any.
  5. Complete local licensing requirements: –Approval of state licensing authority is important before getting a clearance from the local government. In fact, California requires local approval at the time of state-level application itself. For this, it’s important that your application and documents are complete, in full compliance with the cannabis requirements of the municipality/county, where you plan to operate from.
  6. Sorting financial issues, including taxes: – Sometimes, some last moment financial costs or paying up of certain taxes are required for full licensing approval.

Legal Licensing Requirements

Since operating legally mandates the procurement of a business license, permit, registration and other important requirements, it’s crucial to understand the basic legal licensing requirements before you plan to start your cannabis business.

Whether home based or online, both kinds of marijuana businesses will require the same level of compliance and need to fulfill the basic legal licensing requirements, at par with traditional physical commercial store. Let’s understand the licensing requirements in detail.

  • Business formation: -Either incorporating one’s business or forming an LLC is important with the state, in order to protect the one’s personal assets from any potential debts or liabilities, that may arise from business.
  • Tax ID number: -Also known as EIN or federal tax identification number, this number will be helpful to identify one’s business for anything related to taxes.
  • General Business License: – This is the legal permit that will allow you to lawfully operate in a city or county. However, it should not be confused with the marijuana vendor license, which only allows one to start/operate a marijuana business legally in a state.
  • DBA Filing: –The name that is there in the incorporation papers will not be the same that you will use while conducting your business. Hence, you need to choose a name, your DBA (doing business as) for conducting your marijuana business.
  • Sales Tax Permit: –In case, you are a retailer of physical or digital products or services, both online and offline and are responsible for collecting both state and local taxes, then you need this 
  • particular kind of license. 
  • Permits: –Different kinds of marijuana businesses would need different kind of permits. For instance, if a cannabis business is into preparing food edibles, then it will require a permit from the health department for the same. Sometimes, businesses may also require permits for signage, zoning and land use as well.

Licensing parameters for different marijuana business categories

Like mentioned before, licensing requirements will not just vary from state to state, but will also depend upon the kind of stage of marijuana business you are. The rules will differ, depending upon your marijuana business, which could be cultivation, selling, manufacturing or investing. Let’s understand the requirements for each category.

  • Cultivation: -Cannabis cultivation is a tedious process and licensing here will depend upon factors like the heavily regulated operation, the substantial investment gone into the operation, a detailed site plan and practical horticultural knowledge about cultivation.
  • Edibles: –Some states require that you manufacture and maintain the edible marijuana product in a commercial kitchen. You may need to produce the cannabis butters and oils, that go into your product, on site as well.
  • Retail: –Some states require the retailors to provide adequate product and building security in place. Limitations on the product being sold to an individual along with pricing restrictions can also be imposed by certain states.
  • Investors: – Investors need to adhere to stringent regulatory and statutory provisions, which again vary with each state. 

Hence, type of licensing and business documentation will depend on the sort of business operation and your state. It’s important to learn what licensing permits your will need if you are growing a marijuana to those, who are handling the retail part of it. 

State’s Regulations for Marijuana Business Licensing

The following state’s licensing programs show different state-specific approaches to marijuana business regulation.

AlaskaApplication for Marijuana Establishment License online, along with other documents is required for both medical and recreational marijuana cultivation, product manufacturing, testing facilities, retail stores and handler permits.
ArizonaMedical marijuana program demands dispensary registration certificate applications for cultivation facility/ dispensary.
ArkansasArkansas Medical Marijuana Commission, responsible for state’s medical marijuana program takes applications for dispensaries and cultivation facilities licenses.
CaliforniaSeller with state and local license is allowed to sell both medical and recreational marijuana. There are three licensing authorities, Bureau of cannabis Control, Manufactured Cannabis Safety Branch and CalCannabis Cultivation Licensing, who are responsible for issuing different kinds of licenses.
ColoradoMedical marijuana business license and retail marijuana business license for medical and recreational marijuana businesses. 
ConnecticutState’s Medical Marijuana program, run by Connecticut Department of consumer protection, issues licenses to producers and dispensary facilities.
DelawarePublic Health Division runs the Medical Marijuana Program, issues limited number of licenses to medical marijuana distribution centers, also known as compassion centers.
FloridaThe Office of Medical Marijuana, writes and implements the licensing businesses to dispense, process and cultivate medical marijuana.
HawaiiThe Medical Cannabis Program, by Hawaii Department of Health, issues dispensary licenses statewide. However, it is not issuing anymore.
IllinoisDepartment of Financial and Professional Regulation is responsible for dispensary licenses, while, Illinois Department of Agriculture is for regulating up to 22 cultivation centers.
LouisianaLegal framework allows medical patients to avail medical marijuana with a valid doctor’s recommendation. Limited specially licensed pharmacies will be approved for marijuana distribution.
MaineThe Division of Public Health, issues dispensary licenses, but under its Medical Marijuana Program, it has just 8 licensed dispensaries.
MarylandMaryland Medical Cannabis Commission is responsible for developing policies, procedures and regulations around medical marijuana. 
MassachusettsThe state’s Department of Health, runs Medical Use of Marijuana Program, which issues RMD certificate of registration for running a registered marijuana dispensary.
MichiganThe Bureau of Medical Marijuana Regulation, with Medical Marijuana Program and Facility Licensing Division oversees medical marijuana licensing.
MinnesotaLicenses for marijuana businesses are no longer available. The 8 licensed dispensaries are called “Cannabis Patient Centers”.
MontanaLicenses to providers, testing labs and dispensaries are issued by Montana Department of Public Health and Human Services, which runs the Medical Marijuana Program.
NevadaThe Nevada Department of Taxation controls licensing and regulation of cannabis businesses. Till 2018, only existing medical marijuana establishments were allowed to have retail establishment license.
New HampshireThe New Hampshire of Health and Human Services is in charge of Therapeutic Cannabis Program and has 4 Alternative Treatment Centers. However, it is not issuing any more licenses off late.
New JerseyThe state licenses businesses, terming them as Alternative treatment centers, for the production and distribution of medical marijuana. The New Jersey Department of Health is responsible for issuing the same.
New MexicoA licensed non-profit producer is only legally allowed to produce, distribute and dispense medical marijuana, as per the New Mexico Department of Health. However, the department is not taking any new applications.
New YorkOnly registered organizations are authorized to manufacture and dispense medical marijuana. New York’s Department of Health, however is not taking any new applications for the same.
North DakotaThe Division of Medical Marijuana runs compassion centers or licensed dispensaries and manufacturing facilities.
OhioOnly a limited number of growers, dispensaries and other businesses are licensed for medical marijuana. The state may issue some more depending upon the state’s demand.
OregonThe state requires separate licenses and registration for growers and dispensary operators. The Oregon Liquor Control Commission License accepts applications for recreational marijuana licenses.
Rhode IslandThe Rhode Island Department of Business Regulation oversees the licensing of dispensaries and cultivators. The state has only 3 licensed compassion centers.
VermontThe Department of Public Safety is authorized for marijuana registry and for issuing dispensary registration certificates. 
WashingtonThe Washington State Liquor and Cannabis Board is responsible for marijuana licensing, which mandates a facility to produce, process or retail marijuana.
Washington D.C.The D.C. Department of Health has a Medical Marijuana Program, which permits marijuana businesses in the state. The state, despite legally accepting recreational marijuana, has no retail outlets to selling the same. Also, no applications are being accepted for medical marijuana facilities as well.

Employee license for marijuana business

Even employees, working closely with marijuana business setups are supposed to legal license permits as well. For instance, in Nevada, employees have to avail registered card agent, which is provided after proper background check of the employee before being issued by the state.

It’s important for every kind of marijuana business set up, to comply with the local and state authorities. Hence, understanding the process of applying for license is crucial and worth investing your time in. The above parameters and information, regarding your state, might come in handy, while you gear up for license application.

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