Preparing a Cannabis Application: Five Things I Learned



Budding Trends

Bob Seger’s “Against the Wind” is an anthem to love and growing old. Among its many great lines is “wish I didn’t know now what I didn’t know then.”  Can you tell I recently turned 40?

But I write today not about what I wish I didn’t know, but about what I wish I did know about competitive cannabis applications that I didn’t know before I started working on competitive cannabis applications.

Avid readers know that the deadline to submit applications for Alabama’s medical cannabis program was December 30. And even though I had been working with clients, in some cases, for more than a year, I had no expectation of the tsunami of work and questions coming my way in the approximately 60 days between when the applications were released and when they were due to be submitted.

Here are five things I wish I knew then and I’m glad I know now when it comes to a round of competitive cannabis applications:

1. Surround yourself with the very best professionals.

It is imperative to engage professionals in a variety of disciplines. In addition to a great lawyer, you’ll need to engage governmental affairs specialists, experienced application writers, real estate professionals, cannabis-accommodating bankers and insurers, and others.

Just by way of examples, here are the types of things these professionals can do to help you get a cannabis license:

  • Governmental Affairs – Governmental affairs specialists/lobbyists were essential in contacting and meeting with stakeholders that allowed clients to interact with state and local lawmakers. In Alabama, for example, applicants were required to show that municipalities in which they intended to operate dispensaries had affirmatively adopted ordinances allowing for dispensaries and that the proposed dispensaries complied with applicable zoning ordinances. It would have been nearly impossible for my clients to accomplish these goals without engaging experienced governmental affairs specialists.
  • Application Writers – Overlook this at your peril, but beware of who you hire. I realized quickly that there was a small universe of experts with the ability to produce quality applications and there was an ocean of others. The difference between the two may very well make the difference in obtaining a license. I’m not going to name names here, but feel free to reach out, and I’ll share my experiences.
  • Real Estate –  Your operation won’t get off the ground unless you own or lease property. But not all real estate agents or commercial landlords are comfortable with (or knowledgeable about) interacting with cannabis operators. This is the kind of thing that people tend to overlook until it is too late.
  • Bankers – Most banks will not provide services to known cannabis operators. But an increasing number have made the decision to do so. We have developed relationships with banks that will provide depository and certain lending services to cannabis operators.
  • Insurers – Most state cannabis programs require a certain amount of insurance coverage in order to operate a cannabis business. Most insurers, however, do not currently provide coverage for cannabis operators. We have developed relationships with insurance brokers and providers who can provide the necessary coverage for would-be cannabis operators.

2. It’s never too early to get involved and start working.

The best time to begin educating yourself about your jurisdiction’s cannabis law is when it is being considered by lawmakers. During that time period, you can understand not only the provisions of the potential law, but also why those are the provisions of the law. Understanding the politics of the law will allow you to understand the policy choices made by lawmakers. And, should you choose, you may have the ability to help shape those policy choices if you are engaged early enough in the process.

Even if you are not involved in the lawmaking process, you can be involved in cannabis law. But you must begin to digest the law as soon as possible and as thoroughly as possible.

3. There is no substitute for learning the rules.

This is both obvious and difficult. There are likely to be statutory rules enacted by the state legislature, as well as regulations passed by any number of state agencies. You’ll also need to keep in mind the myriad federal rules and regulations governing cannabis.

Clients will call at all hours with an astonishing array of questions about these rules, and many of the answers won’t be found in the plain text of the rules. But your clients will want and expect clear and definitive answers. The only ways to answer those questions are to be intimately familiar with all of the applicable laws and, as discussed immediately below, to understand the position of regulators when the answers aren’t clear from the applicable laws.

4. Use the regulators when appropriate.

Here’s an example: I’ll be the first to admit that I was skeptical that regulators in Alabama would be helpful. I wrongly assumed that regulators with their own agendas and political considerations might prove an impediment to the implementation of a successful cannabis program. I was wrong, in a big way. I found regulators to be a font of knowledge about the program, and at every turn they appeared willing to help me work through questions about the cannabis program. That assistance proved invaluable to me and to my clients, and it was entirely contrary to my initial suspicions.

5. Prepare to finish well before the deadline.

If your jurisdiction has a deadline for applying for application, plan on getting your application in well before the deadline. In my experience assisting applicants in various jurisdictions, there will almost always be hiccups near the end of the application process. In many jurisdictions, particularly where the application process is competitive, applications will be hundreds, if not thousands, of pages and involve things like fingerprinting of investors, bank records, proof of residency, and the like. These are not documents that most people can pull together in a matter of days; rather, it often takes weeks or months to collect the necessary information. My advice is to aim to submit your application two weeks before necessary with the idea that you’ll either be done early or able to tackle late issues as they arise.

*        *        *

I’ll admit to being exhausted when the Alabama application window concluded. It was a mad dash to the finish, and it called upon a wide range of skills that lawyers aren’t always called upon to use.

In the end, though, I’m ready for the next application window, be it in Alabama or another jurisdiction. Put another way, “I’m older now but still runnin’ against the wind.”