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What Does It Take To Get A Licence To Grow Or Sell Cannabis?

Thinking about breaking into the cannabis industry? If you want to become a commercial grower, or are toying with the idea of opening a dispensary, just know you will face a mountain of requirements and fees. Learn what to expect if you want to get a licence to sell cannabis in America, Canada, and Europe.

The cannabis industry is booming. New cannabis companies and retail locations are opening at a staggering rate in many places. It may seem like an easy industry to crack into, but the reality is very different. In short: it takes a whole lot to obtain a licence to sell cannabis, and we’re not just referring to the very high fees involved. Below, we discuss the main factors one should consider if thinking about applying for a commercial cannabis licence in the US, Canada, and Europe.

FACTORS TO CONSIDER IF YOU WANT TO GET INTO THE CANNA-BUSINESS

KNOW YOUR LOCAL LAWS AND REGULATIONS

No matter if you want to get a licence to grow commercially or open a dispensary, the first port of call is to consider legality. Given the “youth” of the legal cannabis industry, the barrier to entry is actually much higher, and the requirements more steep. As such, do your due diligence regarding local laws and regulations. Legal markets vary widely, potentially making or breaking an individual’s success in this endeavour.

Background checks are often required, not just for the owner of a dispensary, for example, but for all employees and investors as well. In some places, such as in Canada, growing medical cannabis commercially will require that everyone in charge has valid security clearance. So, if you have a criminal background, your dreams of hitting it big as a licensed medical grower may be crushed before they can even take off.

APPLICATION AND LICENSING FEES

Aside from the fees of starting and running your business, there are the actual licensing costs you will need to take care of outright. This, in addition to the legal hurdles involved, is often enough to deter many would-be shop owners. In some places, the application fee to get your licence can exceed tens of thousands of dollars. Add to this yearly renewal fees to keep your licence, and it’s clear how quickly the money can be sucked out of your wallet.

OBTAINING CANNABIS CULTIVATION LICENCES IN AMERICA, CANADA, AND EUROPE

The above represents a snapshot of the different factors you’ll need to consider on a more or less global basis. Now, we’ll shed some light on the specifics of becoming licensed in America, Canada, and Europe, to help give you an idea of what things look like in your neck of the woods.

UNITED STATES

In the United States, laws and regulations for commercial cultivation vary by state, by county, and even by city. So before you start drawing up plans for opening a dispensary or some large-scale medical cannabis operation, make sure you know the laws and rules that apply to you.

The fees for licences will also vary greatly. For example, in Washington state, application fees for a licence are only $250, with annual licence fees from $1,480. This is a bargain compared to most other states. In Illinois, the application fee is $25,000, with an annual cultivation licence that costs $100,000. Some states, such as California, Colorado, and Oregon, have tiered annual application and licence fees that depend on the size and type of grow; i.e. if you plan to grow indoors or outdoors, the number of plants you’ll grow, and so forth. On the low end, this can set you back a couple thousand dollars, but may go up to the tens or hundreds of thousands—just for getting and keeping your cultivation licence.

CANADA

Canada officially passed Bill C-45 (Cannabis Act) in October 2018, which makes it the only G7 country that allows the cultivation and sale of recreational cannabis. This means that cannabis is legal on a federal level in Canada. All aspects of selling and distributing cannabis, however, are under individual provincial jurisdiction, where each has different rules for licensing retailers. The Cannabis Legalization and Regulation Branch (CLRB) is responsible for overseeing the licensing process.

Where and how you obtain your licence in Canada depends on what province you plan to operate in. For example, in British Columbia, you would need to obtain a private store licence from the British Columbia Liquor and Cannabis Regulation Branch (LCRB) following a detailed application process. In Manitoba, the Manitoba Liquor and Gaming Authority (LGA) issues licences for the private retail market, but individual communities can veto the opening of retail locations in their area.

In Ontario, you can get a dispensary licence following a detailed application process from the Ontario Cannabis Retail Corporation (OCRC). In Alberta, you submit your application to the Alberta Gaming and Liquor Commission (AGLC).

EUROPE

Compared to Canada and those American states where cannabis is legal, all EU member states treat possession of cannabis for personal use as an offence. However, several countries, for example Spain, Italy, Czech Republic, and Belgium, have now started to remove prison time as a penalty for minor offences.

No government in Europe outright supports legalization of cannabis for recreational use; current legal European cannabis markets exist firmly within a medical context. Even the dispensaries and coffeeshops in the Netherlands are merely tolerated, provided they follow strict criteria by the public prosecutor. This is similar to the cannabis clubs in Spain, which are technically private clubs, not commercial retail spaces.

Due to the legal status of cannabis in European nations, it is at this point not yet possible to apply for a licence to sell recreational cannabis, although baby steps are being made.

Germany, for example, intends to award the country’s first domestic licences for medical cannabis cultivation in 2019, although the process has so far been plagued by setbacks and delays. Germany recently restarted the application process, where the deadline has since passed. Those companies that are eventually selected to be the first to legally grow medical cannabis in Germany will have to follow stringent security requirements, and will need to adhere to the highest pharmaceutical production standards.

CANNA-BUSINESS LICENSING: ARE YOU IN IT FOR THE LONG-HAUL?

If you live in Canada or one of the legal states in America, you can apply for a licence to sell or grow cannabis. That is, if you’re willing to invest a tremendous amount of money (and energy and time) into a very competitive industry where success is anything but certain. Here in Europe, things are moving slower for aspiring commercial growers. Cannabis is still illegal in the eyes of the law, despite various decriminalisation efforts made here and there. But if the current legal markets teach us anything, it’s just how quickly things can change.

Check out this definitive guide to obtaining a licence to grow or sell cannabis in the US, Europe, and Canada. Here are the factors you need to consider!

Five tips for growing and selling marijuana like a pro – from a university instructor

The developer behind a Canadian university’s online course for prospective cannabis professionals offers key advice for success in the newly legal business

A worker tends to cannabis plants. Growing marijuana for personal use or illegal sale is not the same as running a professional operation, warns Tegan Adams. Photograph: Abir Sultan/Corbis/Corbis

A worker tends to cannabis plants. Growing marijuana for personal use or illegal sale is not the same as running a professional operation, warns Tegan Adams. Photograph: Abir Sultan/Corbis/Corbis

Last modified on Wed 20 Sep 2017 19.44 BST

I f you’ve had enough of your nine-to-five’s wearying toil, perhaps a change of vocation is in order. The Kwantlen Polytechnic University in Vancouver can recommend an intriguing alternative starting this September: selling pot.

The shady-looking fellow on the corner will tell you that you hardly need a college diploma to sell weed for a living. But Kwantlen’s new 14-week online course will sculpt aspiring dealers into professionals in a robust – and newly legal – field.

The course promises to be a rigorous survey of the landscape of marijuana production and sale, educating prospective growers in everything from irrigation to marketing.

So what exactly makes for a good professional manager of marijuana for medical purposes?

I spoke with Tegan Adams, the programme’s developer and primary instructor, to get a clearer idea of what those eager for education in the discipline can expect.

1. Don’t rely on past experience

There were, of course, “various growers doing it long before it was legal” but even pot veterans find their expertise distinctly lacking. “People have done the best they can given the resources,” Adams says – but growing marijuana for personal use or illegal sale isn’t the same as running a professional operation. “I’ve noticed that there is a pretty big labor shortage in the marijuana industry,” says Adams. “That’s one of the major problems we’re facing right now: there’s no training anyone can take.”

She continues: “A lot of people have been growing for 20 years. That’s great. Chances are they are very knowledgeable about growing the plant. But when it comes to regulations, financials and everything to do with exchange, they have no idea how that part works.”

That’s where Adams and the programme come in. “Having a standardized education system is going to be important to the licensed producers and anyone doing it legally going forward.”

2. Get to know the logistics

Growing and selling marijuana the proper way is rather more difficult than simply popping a plant under a black light in your closet. Doing it right means planning to grow on a large scale – and planning to deal with large-scale problems.

“As with any agricultural crop,” Adams says, “there are going to be ongoing issues with pest management that you need to look at.” Energy consumption, too, poses challenges few people consider. “Indoor facilities especially have huge electrical bills,” Adams points out. “For a four- to five-thousand square foot place you’re looking at around $30,000 a month. That’s a lot. That’s $360,000 a year for the lights in just a small facility.”

A marijuana field. Photograph: Stephanie Paschal / Rex Features

Preparing for such eventualities is a key part of any business plan. “If you were going to grow any crop, you would sit down and make your production plan. You would look at how much money you would spend on different input, and also look at how your production and labour are going to work within regulations.” Of particular importance is the MMPR – the Marijuana for Medical Purposes Regulations, which govern the production of pot for legal use and sale in Canada.

Then there are “environmental monitoring and sanitation issues” unique to the growing of weed. “I think the main challenge,” Adams concludes, “is that marijuana is an agricultural or horticultural crop but it’s being regulated from a pharmaceutical perspective. One of the major challenges is joining the agricultural and pharmaceutical ways of doing things.”

3. Build a client base – and keep them

“A lot of people are buying marijuana,” Adams says. “There’s no doubt about that.” But does that mean the would-be marijuana seller has a built-in clientele? Not necessarily. “It’s going to be quite competitive,” she warns. “There are conglomerates who have already joined. There’s some big money involved. And I think you’re going to see a lot of it move more in that direction.”

The solution? “We need to focus on consumer satisfaction. How do you get your messaging out to your patients? How do you retain them, make them happy, answer their questions? How do you get their loyalty?” Answering those questions, Adams says, is “how you’re going to stay in business in the end”.

One advantage the educated and licensed pot purveyor has over his illegal competitors is consistency. “With legal products you know exactly what you’re getting,” Adams says. “There are pesticide tests to make sure there are no residues on the plants. If you get it from an illegal supplier, those guys aren’t allowed to test their products. You have no idea what they’re putting on their plants. You don’t know how they’re handling it. If you get it from a licensed producer, you know that it’s clean and a lot safer.”

4. Build a boutique brand

With so much money in the marijuana game, it may be difficult for the independent supplier to stand out – unless independence is seized upon as a virtue.

“The main thing that’s important is to make a boutique brand rather than a mainstream one,” Adams says. “As long as that mom and pop store is able to market to its local consumers, it will stay in business. And people in its area may even buy more than they would from, say, Advil because they know them and trust them and like their brand.”

Legal in Canada … for medicinal purposes. Photograph: Alamy

But in the end, it comes down to loyalty and marketing: “With beer and wine the marketing and branding is important but the flavours really contrast. Marijuana strains vary, but in terms of actual flavouring there may be less variation. So it has to do with branding.”

If you’ve got a good product, you’ve got to get it into your customer’s hands and have them come back.

5. Be a well-rounded grower and seller

“I’ve done a lot of consulting work,” Adams says, “and one of the main issues that I see, especially in startups, is that there’s a knowledge gap between the marketing guys and the people on the ground. The people who work in the facility really need to be able to communicate with the patients and marketing side of things, and vice versa. It’s important that both sides understand each other.”

For the prospective grower that means knowing both the production side of the industry as well as the sales: you’ve got to be as good at producing pot as getting someone else to pay for it and smoke it.

For Adams, it’s about a union of personal assets. “You need to be someone who is able to balance technical abilities and social and communications skills,” she says. “Maybe understand numbers and look at finance and know what they need, but can you then go and talk to an upset customer and know what they need, too. That’s the key. Having both skills is necessary.”

The developer behind a Canadian university’s online course for prospective cannabis professionals offers key advice for success in the newly legal business