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Knowledge & Insights

How to Secure a Cannabis License for Your Business


In the burgeoning world of legal cannabis, starting a cannabis business can be a lucrative venture. However, the journey from ideation to operation is paved with intricate steps, particularly regarding securing a cannabis license. This comprehensive guide aims to shed light on the process, from understanding the laws and regulations to crafting a compelling business plan, aiding aspiring cannabis entrepreneurs in their quest for success. 

Understanding the Legal Landscape

As with any industry, a firm understanding of the relevant laws and regulations is paramount. For those eyeing the cannabis sector, this means familiarity with local and state rules. In the United States, cannabis laws vary widely from state to state, with some allowing medicinal and recreational use and others permitting only the former.

In 2020 alone, five U.S. states greenlighted recreational and/or adult-use cannabis, with more expected to follow suit in the coming years. However, one commonality emerges regardless of location: prospective cannabis businesses must secure a cannabis license before commencing operations.

Remember, legality at the state level does not equate to federal legality. Cannabis remains classified as a Schedule I drug under U.S. federal law, which can complicate matters, particularly regarding funding.

Preparing for the Application Process

The first step in starting a cannabis business is embarking on a thorough research process. Gain a comprehensive understanding of your state’s cannabis market, license application requirements, and the eligibility prerequisites for license holders.

Consider the following questions:

  • Are you ready to adhere to your state’s cannabis business laws?
  • Do you meet the qualifications to apply for a license?
  • Do you require business partners? If so, do they fulfill the application requisites?
  • How will you secure the necessary funding?
  • What are the local rules, regulations, and tax implications for your business?

These early considerations ensure that you are not just ready to enter the cannabis industry but also to thrive within it.

Crafting a Business Plan

A well-structured business plan is the backbone of any successful venture. This roadmap lays out your entire business model, considering the current state laws and their potential evolution.

Given the rapid progression of the cannabis industry, it is crucial to construct your business on a solid yet adaptable foundation. For additional guidance, here’s how to write a business plan for the cannabis industry.

Establishing Standard Operating Procedures (SOPs)

While you may not immediately see the need for written procedures encompassing aspects like payment processing, shipping, record keeping, and security, many states require these SOPs as part of your license application.

When developing your SOPs, engaging an industry expert as a team member or an external consultant is advantageous. These individuals possess the requisite industry experience and understanding of your chosen business’s operational and compliance demands.

Budgeting and Financial Projections

Securing a cannabis license is often costly, with licensing and application fees reaching thousands or even hundreds of thousands of dollars. Moreover, you will need significant capital to launch and maintain your business until it starts generating profits.

Develop a detailed budget that includes rent/leasing costs, licensing expenses, employee salaries, security costs, utilities, supplies, and more. Additionally, engage a financial expert well-versed in the cannabis industry to assist in creating realistic financial projections.

Building Your Team

Although it might seem premature to consider staffing, having the right partners and key employees can bolster your chances of securing funding and a cannabis license.

A strong team showcases your business’s potential for success, which can be particularly convincing when seeking investors. Similarly, license application reviewers favor applicants with the appropriate expertise and skills to contribute to the state’s cannabis market.

Securing Funding

Due to the federal illegality of cannabis, traditional banks are often unwilling to provide loans to cannabis businesses. Hence, entrepreneurs typically rely on personal savings, investments from friends and family, or angel investors.

Regardless of your funding source, it’s crucial to have more capital than anticipated and to demonstrate access to these funds in your license application.

Securing Property

Most states mandate that cannabis business license applicants have real estate secured for their operations. Therefore, you must find a property that fulfills your state’s licensing requirements, obtain approval from the landlord (if leasing), and secure permission from the local municipality.

Completing the License Application

With all the preliminary steps complete, it’s time to compile your cannabis license application. This document should be honest and thorough, detailing your plans and preparations.

Remember, the application process is competitive, and your application needs to stand out. Show the reviewers that your business is not only capable of supporting the state’s cannabis program but can do so better than any other.


Starting a cannabis business involves intricate planning, a comprehensive understanding of laws and regulations, and meticulous attention to detail. By understanding the landscape, planning financially, securing the right location, crafting a successful application, and preparing for compliance, you can navigate the process confidently and increase your chances of success.

As you embark on this journey, remember that experts can guide you. GreenGrowth CPAs offer comprehensive services to assist you at every step, from financial planning to compliance support. Together, we can help you make informed business decisions and successfully navigate the process of starting a cannabis business.

With the booming cannabis industry, there has never been a better time to get involved. With the right planning, support, and dedication, you can successfully start your cannabis business and contribute to this thriving industry.

Starting a cannabis business may be challenging, but with perseverance, the rewards can be immense.

Request a Free Consultation & learn how GreenGrowth CPA’s can help your business grow.

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