Cannabis retail sales are growing steadily across the country, and that means there is plenty of room in the marketplace for new players. The National Cannabis Policy Roundtable, a DC cannabis policy research and advocacy organization, expects retail sales of cannabis nationwide to exceed $26 billion by 2025 – even if no new states legalize medical or adult-use cannabis. Your first step towards joining the growing cannabis retail industry is to apply for a license. That process will be easier and more successful if you line up your key elements before putting pen to paper – owners’ qualification, approved location, and a good floor plan.
Most states will require you to obtain approval from the city or county in which your business will be located, in addition to an approval from a state licensing agency. You must do your homework before you start your license applications. Local and state laws and regulations vary, so you need to know what is expected before you put pen to paper. How you describe your cannabis business in your applications will heavily influence when, and if, you receive approval. This matters for a new business, because denials or delays resulting from incomplete applications can be costly. In the case of competitive licensing scenarios, in which only a certain number of businesses will be approved, an incomplete or ineffective application may be a fatal error.
The first regulatory hurdles that you must overcome are related to ownership and location. You should consider these issues carefully in advance of organizing your business and selecting a location. Rules about who can or cannot operate a cannabis business can derail your application. You may also have an insurmountable problem if the address on your application is not approved for a cannabis business under local and state law. Be especially careful about signing a commercial lease or buying property before you are certain that the property is appropriate, as discussed below. Getting out of these contracts can be an expensive proposition, unless the lease or offer to purchase is conditional on the approval of your application.
Your first priority should be to make sure that you are qualified under the law to operate a cannabis business. Read the local and state regulations carefully before investing too much time and money in the project. Applicants may have problems if they have certain prior criminal convictions, own other types of businesses, or have other types of disqualifications. For example, California applicants for state retail cannabis licenses cannot also own a licensed cannabis testing laboratory. Check to ensure that everyone listed as an owner on your application meets all of the criteria before proceeding with submission. Consult a cannabis compliance expert or an attorney if there is any question about it.
The second priority is to make sure your proposed business location is suitable under local and state law. Most local jurisdictions that permit cannabis businesses have zoning and land-use regulations that dictate where they can be located. Ordinary local zoning laws applicable to all businesses will also apply in jurisdictions that do not require a specific local license for cannabis. Find out the zoning designation of your proposed location. – e.g. retail, commercial, light manufacturing, residential, etc. The designations vary between jurisdictions. You can usually locate this information from the local Planning Department webpage, or call the city/county if an internet search doesn’t clarify it. Once you know your zone, check to be sure it is permitted for cannabis retail under the local zoning laws. In some jurisdictions certain retail or commercial zones may be off limits to cannabis retailers. Be sure to read all of the local regulations. Do not necessarily take a real estate agent’s word at face value. Cannabis zoning laws can be very specific and differ from ordinary zoning rules. Do your own due diligence.
Next, determine if your location violates rules related to proximity to sensitive uses, other cannabis businesses, or any other specified use. For example, local and state laws and regulations often prohibit cannabis businesses from being located within a given distance of sensitive uses. Each jurisdiction defines what a sensitive use is differently. Typically, sensitive uses will include schools, places of worship, parks, day care centers, and residential properties. You may also encounter rules on how close cannabis businesses can be to one another. In the City of Los Angeles, for example, a cannabis business cannot be located less than 600 feet from another cannabis business, even if the business is located in a zone approved for cannabis businesses. Be sure to check for restrictions under both state and local law.
After the ownership and location issues are resolved, you will almost certainly need floor plans and neighborhood context maps. The rules for the content and format of these are often specific to the jurisdiction. Businesses in California are required to show the location of individually-numbered security cameras, secure storage areas, cannabis waste receptacles, and much more on their floor plans. A city or county may be interested in seeing elements related to local building and safety codes (e.g. the sprinkler riser room, dedicated parking, etc.). I suggest applicants start by making a comprehensive list of all of the elements required on maps and floor plans. Check them off as you create and finalize the plans. Incomplete maps and plans are a common reason for applications to be delayed, returned, or rejected.
Have a retail dispensary expert help you lay out your retail space so the flow of cars, people and inventory will be smooth. Once your dispensary floor plan advisor has created a draft layout, an architect should formalize it in AutoCAD. Regulations may require that these plans be drawn to scale and include dimensions. Both can be a challenge for a layperson. Professional plans will help you avoid pitfalls like incorrect proportions, wrong measurements, and omitted elements that may be required. In general, professional floor plans will also be neat and easy to read, thus speeding the licensing agency’s work. If your business plan includes remodeling or new construction, you are going to have to invest in professional plans to get your building, electrical, mechanical and plumbing permits (MEP). These can often be used to create the floor plan for your application. Be careful that the floor plan submitted with your application does not contain superfluous information not requested on the license applications. This can obscure the required elements and slow approval.
Applications often call for vicinity maps showing the location of the building, parcel, and adjacent uses. You may also hire an architect or draftsman to prepare this map to the specifications in the regulations. However, in some cases you can use readily available tools to create these maps yourself. Websites like Google Maps can create vicinity maps using the standard or satellite view. Download the map image, including the scale bar and compass indicator, as a PDF file or other format of your choosing. If you take a screenshot, crop the image to exclude anything that is not part of the map. The downloaded file can be annotated with lines indicating property lines and labels indicating the use of other buildings and areas. If you choose to make your own vicinity map, use the same method to evaluate its contents as suggested for the floor plan. If you are unclear about the process or quality of a homemade map, consider using a professional.
When you have your ownership criteria confirmed, location vetted, and maps in hand; you are ready to start the process of completing your cannabis dispensary application/s.
Contact Us Today for Help Getting Started with your Dispensary Application, Floor Plan and Planning
Don Duncan is the expert’s expert when it comes to dispensary licensing, compliance and operations. He is a pioneer in the California cannabis industry, having operated the first formal dispensary in the state, Berkeley Patients Group, in 1998 and gone on to operate the Los Angeles Patients Group and consult on many subsequent California cannabis retail projects. Read more about Don here.