A state license application is, in essence, a compliance document which outlines exactly how the applicant intends to maintain successful operation within the parameters of state regulatory and compliance requirements.
There are essentially three major components to any state license application, which regulators and licensing bodies consider when judging the merits of applications:
- What service the company wants to provide, and at what financial level/scale?
- How will the company meet compliance standards and uphold state laws and regulations, and what is the business model for successful compliant operation?
- What social equity or public service does the company provide above and beyond successful and compliant operations?
Type and Scale of Service
A clear place to start with any license application is the question of what service or products the applicant wants to provide. It’s a basic step, but a critical one with separate licenses for retail, wholesale, manufacturing, cultivation, delivery, and distribution, and with each license costing upwards of $20,000 a piece (depending on what state you are in), a clear idea of which niche in the industry the client wishes to fill should be present in the beginning.
Next comes the question of financing, as companies with greater access to start-up capital are more likely to be able to secure multiple licenses, creating a seamless synergy within their business and allowing them to seize a larger market share in the beginning of operations. What scale of operation does the applicant intend to produce at?
An application should try to make as clear a case as possible for how an applicant will meet regulatory demands. This means seed-to-sale tracking, security measures, even fire abatement and building code all have to be dealt with, and an applicant should be financially prepared to follow through on these requirements in order to maintain seamless operations without regulatory hang-ups or delays.
Compliance Standards and Business Model
Probably the most complicated question is, how does the applicant intend to run their business? As a compliance document, these are the nuts and bolts of the application itself.
A compliance model tracks closely to a client’s business model, requiring the client to answer a range of questions about how they intend to provide their service in accordance with the law. Additionally, each service type carries a host of unique compliance-related concerns.
If it is a delivery service, what tracking software, what vehicles, what location, how are they taking orders, and how are they tracking compliance and securing product? How close to schools and churches can they be, where are they allowed to operate within their region?
If it is a cultivation site, what grow medium are they using, what nutrients, fertigation, irrigation, lighting, CO2 supplier, etc? What are the regular needs of the business and how do they intend to maintain regular operations to meet demand and execute their business model?
This all enters into the application, and an example of this might be waste management. For instance, rockwool (a propagation medium) is toxic and non-recyclable. How will it be disposed of? On the other hand, organic soil and nutrients have the risk of pest and product contamination, how does the applicant intend to mitigate these risks to the consumer and pass testing to ensure their product is saleable and compliant? The answers to these questions would determine an application’s environmental impact reports.
Drafting an application is a conversation with the client/applicant based upon what their own background and expertise in the industry may be and the application writer as an expert on the state legal code and compliance requirements. The job of a application writer is to ask these questions and press the client to create as detailed a business plan as possible (complete with security, error reporting, compliance plans, and safety practices) and incorporate that into the application, in order to create a clear and compliant picture of the client company’s mode of operation.
The most important aspect of any application document is compliance with state code and regulations. How is the applicant going to ensure, and re-ensure that the company is complying with the letter of the law? How is the applicant going to maintain a record of compliance to protect their business from regulatory scrutiny and costly interruptions to operations? Most of these records of compliance are generated via software and data solutions such as Biotrack and METRC, but also via well written Standard Operating Procedures that can be issued to all employees, complete with training records, and managerial oversight to ensure that this process is ingrained within the company culture as part of the plan for operation outlined within the application.
The X-Factor: Social Equity
Almost as important as the question of financing, is social equity and community stewardship. Candidates with a stronger social equity claim, or who provide a greater benefit to their communities, can oftentimes win licenses over applicants with better financing and more carefully written applications. For example, one our client’s application was scored at around 86 of 100 points. The client won their business license application over multiple high dollar applicants because it promised to convert a failed produce farm into a cannabis cultivation space thereby creating new jobs for displaced farmworkers. They delivered on this promise and are currently the number one dispensary in their state of operation.
The CannaBeSecure Application Writing Team
The CBS application writing team is comprised of highly educated individuals that are cannabis regulatory compliance and industry experts. Our team has written hundreds of successful state applications for cultivation, dispensary, consumption lounge, process manufacturing, delivery, distribution, and wholesale applicants. Our success rate is 91.8%. Contact us to setup a state application consultation call.
The more carefully thought out the business plan, the more clear the social contribution and the path to regulatory compliance an applicant can produce; the more likely it is that they will win the application. Ideally the work of the application writer is to help develop all of these things with the applicant, identifying where they are strongest and reinforcing their knowledge in areas where they may not have realized they were lacking.
A great cultivation team could have the best product on the market, and failure to meet compliance standards will make or break even the best operators. Having a realistic picture of how the business will run and profit is not only essential to the success of the company, but is perhaps one of the most important aspects of winning a license application.
It all starts with a great license application.
A skilled application writer will work with the client to look for opportunities to meet their operational needs, while making a positive net benefit for the community. Sometimes even relatively small operations with a clear social contribution can quickly expand and become industry leaders.
A good application writer is essentially a business consultant who helps to develop a clear picture of what these regulatory needs will look like, and how to ensure continuous compliant operations.