3 Steps To Becoming A Licensed Cannabis Manufacturer

3 Steps To Becoming A Licensed Cannabis Manufacturer

Business is booming in the cannabis industry, and there is a potential to make a hefty profit as the industry continues to grow. Over half of the United States has legalized cannabis medically or recreationally, but the process can seem daunting at times, with laws and regulations at the state and local levels adding to an already complex industry that’s still trying to figure itself out.

With the potential for solid profits and more businesses entering the market in order to meet consumer demand, why aren’t there more licensed manufacturers?

Most of the issues relating to this topic originate from the stringent licensing process and the related obstacles due to state and local municipalities. To make everything work, it’s important for interested parties to do extensive planning and research before dipping their toes into the turbulent waters of the cannabis industry. Proactive is the name of the game, and those reacting to every obstacle as it arises will have a very hard time meeting regulatory standards.

Here are three simple ways to become a licensed cannabis manufacturer: Understand local laws relating to zoning and land use, secure the proper building and occupancy permits, and complete all applications completely.

1. Understand Local Laws

Research and planning is the name of the game, folks. Before getting a license from the state, it’s vital to get approval to conduct business at the intended location from local municipalities. Do not put the cart before the horse at this step — just because you want to operate a cannabis business at a specific location does not mean it is guaranteed to happen. 

The approval process typically goes above and beyond garnering land use, zoning permits, and business licenses — additional steps may require cooperating with local fire and police departments, city planners and land use regulating authorities before approval is secured.

As the industry grows, many local governments are also requiring interested applicants to evaluate and provide information on potential negative effects on the surrounding environment, especially for those interested in building a new facility or developing a site. In many cases, this requires the local government to conduct an environmental review. In cases where an existing facility or commercial property is being considered, the process may only require a few simple updates. Regardless, due diligence is key to avoiding any budget-breaking surprises.

2. Get Proper Building Permits

Once local governmental approval is secured, the next step typically involves obtaining building permits. Permits are usually required when making improvements to an existing facility and includes installation of safety equipment and fixture upgrades. Once the improvements and upgrades are completed, the facility and buildings will be inspected. After that, if the facility passes muster, the local municipality will issue a Certificate of Occupancy. At that point the facility will be ready for use.

3. Complete All Licensing Applications

Every state where cannabis is legal has its own governing body that oversees and administers the licensing process. In Oregon, for example, cannabis producers, wholesalers, and manufacturers must obtain specific operating licenses from the Oregon Liquor and Cannabis Commission (OLCC).

Applicants are required to provide documentation that includes a completed Land Use Compatibility Statement from the city or county that authorizes land use where the proposed premises is located, documents proving the applicant has legal access to the proposed property, boundary sketches, floor plans, and detailed documents on the structure of the business. 

Additionally, the state requires an individual history form for every person identified as an applicant and also includes information on procedures for waste disposal, security, and transportation. Timing is crucial — and it is dependent on many areas, from local municipalities to state regulatory agencies. Generally speaking, it can take up to 24 months to obtain a manufacturing license in California and up to a year in Colorado. 

Plan and Prepare for Delays

The final takeaway is this: when planning to secure a cannabis manufacturing license, plan on things taking longer than anticipated. Research and a realistic approach are key. Delays at some point are practically guaranteed, but if you’re planning is on point, you’ll be able to absorb and bounce back from these anticipated setbacks without derailing the entire plan. 

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About Brian Ellis

With 6 years' experience in business journalism, Brian is the person we turn to for anything related to the business of cannabis. His news coverage spans topics including marijuana business and finance. Brian's work features on marijuanareferral.com, marijuanamerchantaccount.com and marijuanainsuranceagent.com.