Best Practices

Big Mistakes To Avoid In California Cannabis Retail Licensing Applications

These tips may save you a lot of headache down the line

The Bureau of Cannabis Control in the State of California is the body that will be the ultimate “nay” or “yay” on your cannabis retail store licensing application.

Will your application be strong enough to stand out to get that stamp of approval?

 

A Snapshot into Licensing in California

Currently, there are 815 licensed cannabis retailers in the state of California, and this number is growing. At present, medicinal retailers (54%) outnumber adult use or recreational retailers (46%). It’s safe to say we can we can expect this number to level out, or see the number of recreational retailers outnumber medicinal retailers.

Nonetheless, the Bureau of Cannabis Control doesn’t hand out cannabis retail licenses like candy. It takes a lot of discretion, due diligence, and most of all trust, for the Bureau to hand over a retail license.

Considering applying for a cannabis retail license in the State of California? Make sure your application is flawless. Here are a few big mistakes to avoid when putting together your application in one of the 530+ jurisdictions in the State of California:

 

Procrastinating

Putting together a cannabis retail license is no easy feat and could take months to complete. From ordering tax documents to completing financial statements, to ensuring you have your blueprints/floor plans, the devil truly is in the details.

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Starting early will ensure that you have all your ducks in a row, your content is polished and attention-grabbing, and your demonstrating conscientiousness in your business procedures.

 

Doing too Much within One License

With a saturation of cannabis retailers in California, some cannabis retailers will do anything they can to stand out amongst the crowd.

Cannabis retail licenses are restricted to medical, recreational, medical-delivery, and recreational-delivery (as well as temporary retail licenses for events). These distinctions are described as a storefront retailer and a non-storefront retailer.

The state is not at the point yet where it is accepting applications that will allow a retailer to sell both recreational and adult use cannabis or hold both storefront and non-storefront licenses. Don’t be naïve and present too much in your plan outside the confines of a license.

If your cannabis business is interested in operating more than one activity, a separate license is to be applied for (i.e. cultivation, manufacturing), which will represent a vertical integration of licenses and business streams.

 

Not Minding the Company You Keep

Although your staff may have pristine clean background checks, doesn’t mean that everyone you associate with outside your cannabis retail store will.

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Be mindful of the vendors you are using and signing official agreements with. For instance, when describing your plans for seed-to-sale traceability or POS, you may not be able to take your vendor’s word for their experience, accuracy, and uptime in your state.

Be sure you do your due diligence in checking out all the vendors you’ll be looking for so that their red flags don’t become your red flags.

 

Fudging Details

Simply put, if there is an attempt to fudge details or bend the truth on a cannabis retail application, it will be found out. Those who are trained to review license applications will do their due diligence and fact check to ensure that all questionable parts on an application actually check out.

For instance, you will be asked what your expected profits will be to determine your licensing fee.

Naturally, everyone wants to save money, but if you’re only paying $4000 (for a business up to half million in revenue) but you’re actually making greater than 1.5 million, you will be caught for trying to skimp on licensing fees.

 

Not Completing All Components

No one in the history of completing licensing documents ever said it was an enjoyable exercise. It is actually quite tedious and time-consuming.

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The State of California wants to be able to see that you’ve crossed your T’s and dotted your I’s in terms of everything on the form. From diagrams of the premises to proof of location in terms of restrictions, to financial information, to inventory procedures, to safety and security, and a lot more, the Bureau of Cannabis Control wants to know it all.

Don’t get yourself in a situation where your application has been held up or rejected due to incomplete status – no matter how tedious the process, completing all components is completely necessary. Don’t think they won’t notice if a teeny tiny section has been left incomplete – they will!

 

Improper Use of Language

Language is everything in your cannabis application. If the language used in your application isn’t professional in tone and carefully chosen, your application could get tossed out.

The days of recreational cannabis are about helping to bring a level of sophistication to the industry, rather than detract from it by perpetuating old stigmas. Just as medical cannabis retail stores work towards helping people achieve their desired medicinal, recreational stores should keep the same level of professionalism with discussing adult-use cannabis.

Don’t allow words like “weed” or “stoner” to creep into your language, as these words devalue and diminish the potential for cannabis retail, and the privilege of legal cannabis.

 

Not Revealing All the Players

A retail license will require that all the players and individuals who will be involved in the retail endeavor. This includes not only all information about the owners, but also those who have a financial interest, meaning those who have made an investment into a cannabis business, have provided a loan to a cannabis business, or any other equity in a cannabis business that is not qualified as an owner.

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All owners, whether operational or silent and all investors and lenders, must show up on the application.

Background checks will be run on individuals applying for licenses, meaning that it’s always best to disclose any criminal activity that could show up on a background check before it is completed.

 

Do Your Due Diligence

When it comes down to it, you will get out of your cannabis retail license application what you put into it. Remember that the Bureau of Cannabis Control sees hundreds of applications come through, and it’s easy for them to blend into a sea of green.

Show that you truly are invested in the success of your cannabis company from the application process on, and that will certainly help determine your success.

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