How to open a cannabis business in any state in 2023?

How to open a cannabis business in any state

How to open a cannabis business in any stateIntroduction:

The United States has come a long way since the prohibition era of cannabis. It’s a sign of the times that you can walk into a dispensary and buy legal cannabis in almost any state. Maryland and Missouri joined the roster during the 2022 midterm elections becoming the 20th and 21st states to legalize recreational cannabis.

Although, a record high (68%) believe marijuana should be federally legal, not every state has embraced legalization. Nor is every state created equal when it comes to opening a cannabis business. Some states have strict rules while other states are more lenient. No matter where you open your business the path to licensure is paved with complex challenges. Here are some tips to help you prepare and open a cannabis business in any state.

How to Prepare to Open a Cannabis Business in Any State

Every state that has legalized medical and/or recreational cannabis creates its own set of rules and regulations for how marijuana businesses are licensed and how they are to conduct business. Your first task will be to become familiar with what regulating body will license and set the operating standards for your type of cannabis business. States can also involve multiple agencies depending on the cannabis activity of your business so make sure you know which regulating body is for your license type. And make sure to keep informed of important deadlines and updates related to licensing and compliance matters. Below is a list of how you can begin to prepare to start your cannabis business in any state.


Need help opening a cannabis business in the United States?

Learn about the rules and regulations necessary to operate a cannabis business in the state you intend to operate in and figure out which cannabis business license type is best for you.

  1. Form a business entity. Corporations and LLCs are the two types most commonly formed by cannabis applicants. Consult with industry professionals to help determine which entity type is best for your business, prepare your business documents, and understand tax obligations and compliance requirements for your entity.
  2. Find a compliant location for your cannabis business. You must find a property for your cannabis business that meets all the state and local zoning requirements.
  3. Build your team. From licensing to operations, beginning your cannabis business is a lengthy process requiring the collaboration of many professionals. Start building your team with knowledgeable and experienced professionals familiar with the complex laws governing cannabis businesses.
  4. Raise Capital. Although start-up costs for a cannabis business can be significant, careful planning and the right team can make it a huge success.
  5. Write and submit your Missouri cannabis business application. Depending on the type of license, applicants may need to write and submit the following documentation:
  • Business Plan and Financials
  • Corporate Structuring
  • Safety and Security Plan
  • Location Information
  • Waste Disposal Procedures
  • Transportation and Distribution Plans
  • Employee, Staffing, and Training Manuals
  • Regulatory and Compliance Plans
  • Quality Assurance and Control Plans
  • Corporation Registration and FEIN filing

Other Factors to Consider When Opening a Cannabis Business:

There are several other considerations to take into account when determining where to open your cannabis business. Make sure you fully understand the application and compliance requirements as part of your due diligence process. Below is our recommendation of other factors to consider when deciding where to open your cannabis business.

  1. Licensing Process: You will want to make note of whether licenses are obtained by a competitive process or a standardized process. By nature, competitive applications are competitive. You will want to assess if your business fulfills the requirements and strategize how you can stand out from the competition to obtain a license. You will also want to consider how many licenses are available and if there is a cap in place on the number of licenses the jurisdiction will issue. You will also want to look into whether you will need any additional licenses or permits before you can begin operating such as a Conditional Use Permit.
  2. Owner Requirements: Some states have a residency requirement for how long owners have lived in the state where you are applying. Criminal histories of owners with disqualifying offenses to hold a license also vary by state. States may also require applicants to show a specified amount of capital to adequately support the operating costs of their license type. Check the regulations and applications thoroughly to ensure all business owners fulfill the requirements.
  3. Fees: Make sure you know what the application and licensing fees are as well as any other regulatory costs such as inspection fees that are required. Starting a cannabis business requires substantial capital and some regulatory costs can be upwards of tens of thousands. Make sure you understand your financial obligations.
  4. Taxes: The cannabis industry is typically subject to higher tax rates than other businesses and has more restrictions to taking deductions for ordinary business expenses under 280E. Make sure you understand your financial obligations and tax structure.
  5. Compliance Standards: What other compliance or reporting standards are required for your business? Are there charitable contributions or employment requirements you are required to uphold? Keep your license in good standing by understanding all operating compliance requirements.

What States Have the Most Opportunity:

The legalization of medical and/or recreational cannabis use is expanding across the United States. Emerging markets in the northeast such as New Jersey, New York, and Maryland have expanded opportunities. Look into opening markets that have recently passed laws for medical and/or recreational cannabis and utilize the tips in this guide to help you narrow down what state is best suited to open your cannabis business.

The process of opening a cannabis business varies from state to state. We hope this article has given you a better idea of what to consider when opening a cannabis business in any state and where to begin your search.

How we can help?

At Cannabis License Experts, we provide you with the guidance to plan your cannabis business, acquire funding, navigate the legal requirements, and acquire the appropriate cannabis license for your operations. As the cannabis industry develops in the United States, more and more licensed producers/cultivators will be needed to meet the demands of consumers.

Cannabis License Experts offers support from day one of starting your cannabis business, including strategic planning, floor plan preparation, site audits, SOPs, Preventive Control Plans (PCPs), and more.

Our Edibles Compliance division can provide you with a solid plan for your edibles business to help get your products on store shelves.

Contact us today to discover how we can license and legalize your cannabis business to meet federal or provincial regulations.


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