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How to Submit a Strong Cannabis Business Permit Application in California

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May 01, 2018

As we’ve seen over the past few months, California cities and municipalities are offering a limited number of business licenses to new cannabis companies. San Bernardino is offering 17 total licenses; Colfax has four retail permits up for grabs; San Francisco has a waiting list until 2019, and those are only the most recent announcements. Competition is fierce and barriers to enter California’s cannabis industry are high. That’s not to mention the high application fees you’ll pay for no reason if your license application is rejected.

What are some things you can do to make your application stand out? Our experts have worked with dozens of successful cannabis licensees, and they’ve seen what can make or break an applicant. Here are their top tips for submitting a strong cannabis business application in California.

Read the instructions.

Sounds simple, but every application is different: each municipality has their own twist on what it takes to open a business in their city limits. And, with so many potential businesses vying for a small number of permits, you must follow instructions to the letter. Don’t give the review committee an easy excuse to reject your application just for missing some information or failing to meet one of the requirements!

Do your due diligence.

Our expert’s number one piece of advice is to go above and beyond when it comes to the details. Essentially, you should be thorough in creating your application that if (when!) it is approved, you can pull the trigger and open within a few weeks. This means calling security companies, interior designers, partners, POS vendors, real estate agents, and anyone else who you will need to vet and sign contracts with to get started. Get financial quotes from each of these vendors, and make sure you’re clear about what your start-up costs are.

Keep in mind that all these other businesses are what will make your business successful in the long-term. Don’t panic and start signing up partners you will ultimately struggle to work with. This is not only an important part of your application but an important part of your inevitable success. Get quotes!

Be financially realistic.

Once you’ve received quotes from partners and third-party vendors, you’ll have a better picture of what it will take for you to actually open your cannabis business. For some, this can be a wake-up call; maybe you need a little more liquid capital than you originally thought. For others, this just verifies that you’re ready to go. Some cities offer bonus points when CPA attests to your financial viability. Submit your financial documents with a seal of approval from a registered accountant to show the city you mean business (literally).

Follow security guidelines.

Make yourself a viable contender in the eyes of whatever city you’re applying for by following security guidelines. Hire a professional to get your on-site security set up: panic buttons, motion sensors, door alarms, vaults, etc. Keep in mind that you are dealing with quite literally with cash and drugs: protect your business and prevent theft. The city doesn’t want to have to spend extra resources investigating any incidents at your business, and they want to see that you take safety seriously.

Compliance also falls under this area of preparation – and applicants frequently get tripped up on compliance issues. The city wants to see if you are going to run an above ground operation. Are you going to pay your taxes, or are you going to run a black market? Show plans for things like inventory control, inventory audits, and commitment to state policies. It’s not enough to make promises: show an action plan including a full inventory sweep every 14 days, for example. Show where on your floor plan you will position cameras, along with the cost per camera and vetted vendor priced out in your business plan.

Have a unique business idea.

In short: branding! Green Growth CPA experts caution against falling into the “dumb hippie bakeshop” stereotype – unless, of course, that’s a carefully thought through user experience you’re going for. Put a little work into describing what the inside of your dispensary will look like, what the user experience will be, and what your logo and signage will be. What makes you look professional? What sets you apart from every other cannabis store?

Show your role in the community.

As we’ve pointed out in the past, many cannabis business applications have a so-called community section – an opportunity for you to share how you will play a role in supporting the local community. California is well aware that cannabis businesses can expect to rake in the cash: and they want to see how you’re going to add value back to society. Our experts suggest that you select specific causes or community functions with local significance. For example, donating 1-2% of your sales to a local animal shelter is better than saying you’ll send some cash to PETA eventually.

Give yourself enough time.

Our experts recommend giving yourself a full three to four weeks of dedicated time to craft and submit a solid application. That means spending each day drafting contracts, making calls, interviewing potential employees, locating real estate, creating financial projections, and setting up security measures, among other things the application might ask for. Unfortunately, some cities don’t give you the luxury of time: some applications only give you a two-week window. In that case, it helps to consult with an expert to prioritize where you can shine on an application.

Has your city announced the opening of their permit application process? Get in touch with Green Growth CPAs to find out more!

Filed Under: California, Licenses