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States Prepare for Marijuana Business Application Processes

by Sarah Cawthon May 14, 2020

Marijuana markets across the country remain a patchwork of regulations with some states adopting limited markets that are driven by deadlines for marijuana business application submissions, and others boast open markets with no deadlines meaning they will accept applications on a state level indefinitely.

In open markets, states allow local governments to determine when applications will be accepted in their jurisdictions. They also regulate and limit the number and types of licenses permitted within their borders, if they decide to permit any at all. A local government might then make applicants compete for a limited number of permits and this scarcity can severely impact who is able to contend.

Limited markets control when applications are announced on a state level, and only keep the application process open for a limited time, typically 30-60 days.

Open market states likely to announce application processes:

The economic fallout from the COVID-19 pandemic might create more marijuana business opportunities in California as local municipalities seek fiscal stimulation. In California, the world’s largest legal cannabis market, nearly two-thirds of the municipalities have banned marijuana businesses from setting up shop. To put that number in perspective, only 24 of the 58 counties and 161 of the 482 municipalities have elected to permit commercial cannabis activity in any capacity. However, these jurisdictions that previously banned marijuana businesses might soon change their position and welcome new business opportunities and tax revenue.

Massachusetts’ Cannabis Control Commission will release delivery license applications on May 28, 2020. Applications will be available to existing licensed cannabis microbusinesses that are interested in delivering their own products and third-party transport companies. However, for the first two years of the recreational delivery initiative, only participants in the state’s equity program may apply. Deliveries will not be able to begin until adult-use sales restart. The eighteen Medical Marijuana Treatment Centers in the state are already able to offer delivery.

As a reminder, Massachusetts is also always accepting applications for recreational cultivators, manufacturers, and retailers on a state level as well.

Limited market states likely to announce application processes:  

Rhode Island
Rhode Island regulators are expected to announce the licensing application period for six new medical cannabis dispensaries this year. Currently, Rhode Island only has three operating dispensaries, or compassion centers, in the state.

There will be one dispensary for each of the six geographic zones in Rhode Island and the new licenses will be assigned using a lottery system. An applicant who applies for a compassion center license may submit only one application per zone.

Virginia recently approved Senate Bill 976, which amended the state’s current licensing structure for medical cannabis businesses by creating a new license. Until recently, the state’s program had only one, vertically-integrated license known as a pharmaceutical processor license, which permitted the cultivation, processing and dispensing of medical cannabidiol to registered patients.

The new law creates a cannabis dispensing license and separates the operations so that a processor is only permitted to cultivate and process cannabidiol, while a dispensing facility may dispense the products to registered patients. Five dispensing facilities will be allowed in each health service area established by the Board of Health. However, in order to obtain a dispensing facility license, the business must be owned, at least in part, by an existing pharmaceutical processor.

Georgia’s medical marijuana board recently hired its first executive director, Andrew Turnage, who will be responsible for starting the medical program that will distribute cannabis oil. Patients in the state have been allowed to use cannabis oil since 2015, but have had no legal way to obtain it.

The newly formed commission is responsible for drafting the rules and regulations as well as for licensing medical cannabis producers to cultivate and process the cannabis oil. With a new executive director, it is anticipated that the commission will begin drafting rules and regulations to make applications for producer licenses available soon.

Arizona’s recreational marijuana ballot initiative, Smart & Safe Arizona, would allow people 21 and older to possess, consume, cultivate and purchase cannabis from licensed retailers. It also proposes that tax revenue from legal sales would be invested in communities disproportionately impacted by prohibition.

Advocates have gathered more than 300,000 signatures from voters ahead of the July 2 deadline, well surpassing the 237,645 required to place the initiative on the November ballot.  The signatures now need to be verified by the state.

The initiative would reserve most recreational licenses for existing medical marijuana operators, but would also provide 26 social equity licenses.

New Jersey
New Jersey voters will see a referendum for marijuana legalization on the state’s 2020 ballot.

The constitutional amendment, that would take effect on January 21, 2021, would legalize marijuana for adults 21 years and older and states that marijuana will be subject to the standard state sales tax as well as an additional 2% local tax issued at the discretion of local municipalities. The Cannabis Regulatory Commission will be responsible for licensing businesses regulating the cultivation, processing and sale of marijuana in the state.

South Dakota
Two separate adult-use and medical cannabis initiatives have qualified for the November ballot in South Dakota.

The medical marijuana measure, if approved, would allow patients suffering from debilitating medical conditions to purchase and possess up to three ounces of marijuana from a licensed retailer. They would also be able to grow at least three plants if authorized by their doctor.

The recreational marijuana measure, if approved, would allow adults 21 and older to possess up to one ounce of marijuana and cultivate up to three cannabis plants. The state Department of Revenue would issue licenses for manufacturers, testing facilities and retailers.

Members of the Oglala Sioux Tribe already voted to legalize medical and recreational marijuana on their reservation earlier this year.

Interested In Applying for Marijuana Business Opportunities?DT Starter Package bundle copy-1

With the above states preparing applications processes for marijuana business opportunities, it would make sense to begin crafting your plans in preparation. To begin preparing for marijuana business opportunities, our Marijuana Business Starter Package includes everything you need to get started.

The package includes an informational overview of state specific marijuana laws and program, our Marijuana Business Application Guide & ChecklistMarijuana Business Plan Template and our Marijuana Dispensary and Cultivation Financial Plan Template.