Many states in the USA have passed laws that make it legal to use marijuana for medicinal purposes. Some states have even gone a step further by even making the recreational use of marijuana legal. It is up to the various states to ascertain who may cultivate or sell marijuana and under what conditions they may do so.
You should however bear in mind that even though some states allow for the cultivation and sale of marijuana, the cultivation and sale of marijuana are still considered federal crimes, and whatever efforts are made to comply with state and local laws will not prevent you from being prosecuted under federal law. Regardless, those starting a marijuana business can avoid most serious problems by closely following state and local rules.
Presently, 29 states and the District of Columbia approve medical marijuana, but the plant remains illegal on a federal level. If you are passionate about growing marijuana and have also been approved for a medical marijuana certification, then you may discover that applying for a grower’s license is the way to go.
Even though a lot of states allow the growing of marijuana for personal use, if you would like to go commercial, you will be required to get a license.
Growing marijuana is not suited for every entrepreneur, but if it is well done, it can prove to be profitable after the initial payments for the gear, lighting setup, seeds, growing media, licenses and more are cleared.
It is important to note that just because your state recognizes medical marijuana as legal does not mean it permits commercial growing or even cultivation on a personal use level. Nevertheless, for those who are passionate about their cannabis business and want to take it to the next level, obtaining a grower’s license is the only legal way to go.
Here are some steps that can help you to grow medical marijuana legally.
Table of Content
1. Know the risks involved
According to the federal laws of the United States, marijuana is classified as a Schedule 1 drug that has no medical value. Cultivating over 99 or 999 marijuana plants can earn you some form of jail time. Before you set out to grow marijuana, it is most advisable to seek out the services of a knowledgeable attorney. The risks that are associated with growing marijuana stem mostly from the disparity in state and federal laws. The gray area between the federal and state law is what creates the opportunity for entrepreneurs willing to accept the risk in an industry considered too risky for conventional big businesses. While memos on federal policy for states with medical marijuana laws are released under one administration, those policy guidelines are not laws and are subject to change under another administration.
Due to the scrutiny of medical marijuana businesses, financial transparency and operating ‘above board’ are requirements for all medical marijuana businesses. It is also very important that you pay your taxes and monitor your inventory properly. Hire the best lawyers and CPAs for legal and financial help and the best consultants for business planning.
2. Financial Metrics
Before you embark on opening a marijuana cultivation center, you should take the time to understand the financial and time requirements. It’s important to weigh your investment in time and money. If you are in a position where you are well capitalized, ensure you do your due diligence when looking to hire consultants and when putting together your project team as it can be very expensive. The proof of capitalization as required in all of the medical marijuana state’s application responses is expensive, and rarely under $250,000 in proven liquid assets. Since proof of capitalization is such a high priority in these application processes, it’s often used as a tiebreaker in the event of applications graded as a tie. Even experienced entrepreneurs may be torn between debt and equity.
Suitability of Your Facility Location
As regards the sustainability of your facility location, there are some factors you should consider. These factors include;
- Physical Features of the Real Estate
- Zoning Issues
- Legal and Financial Considerations
- Owning vs Leasing
In most states where the cultivation of marijuana is allowed, real estate is a very crucial part of the application process. You will need to have appropriate documents that show that you have complied with state and local zoning requirements. This includes a lease, letter of intent, or if owning your real estate- proof of ownership. Consult with a lawyer, CPA and your Dispensary Permits representative on deciding the advantages and disadvantages of owning and leasing.
There are greater legal ramifications in owning your own building. In addition, you do not want a situation where you buy a building or land and then you do not get the permit. Finding a landlord comfortable with the intended use is a hurdle for those seeking to lease property for this industry. Be that as it may, it is very crucial that you tell the landlord what you intend to use his property for. You do not want a situation where you manage to get the permit and then have issues down the road with your landlord. Your Dispensary Permits representative can assist with tips for working with brokers, getting landlord, bank and insurance approvals as well as real estate contract considerations.
Build a Cultivation Plan
Define the goals of the division authorizing marijuana cultivation permits and build your organization’s mission statement around that. For instance, the propriety of some states lie in high-quality product for qualifying patients while another state may prioritize job creation and living wage jobs or staff diversity. Most states require Cultivation Plans to include the cultivation overview that includes in detail, an explanation of each stage of the plant production and supply chain process, including:
- Breeding (if applicable)
- Harvesting & Drying
In addition, you cultivation plan should include a description of the technology and facility to simplify and streamline the hydroponic growing process; as well as details about quality control and testing. The state will most likely also request for general organizational business planning, financial projection planning, patient confidentiality training, record keeping with seed to sale inventory tracking plans, and security plans. A product safety testing plan should be considered even if it’s not required by the division authorizing medical marijuana business permits. All these components are eventually combined into your business plan and the response your organization provides the state’s request for proposal (RFP) or request for application (RFA).
The process of getting a growers permit for marijuana should start by first knowing whether or not your state of residence allows for the commercial cultivation of the crop. Not all medical marijuana states are accepting applications either, so it is important to read up on the laws where you live and see if the timing is right for your application to await approval. The acceptance of applications on a state-by-state basis is always changing, so contact your commissioner directly for the most accurate information.
If you state is accepting application, the next step would be for you to submit an application to that effect. Licenses are not unlimited and as such for you to get a license, you application will have to stand out from the rest. Be sure to have all the required documents in place; every state wants something different in their applications. Most states have timelines in which the application must be submitted. Be sure to have all your necessary licenses, employees and authorizations in place before applying as well.
You should also bear in mind that the time gap between the applying for the license and actually receiving it may take a while. And you must have a license before you proceed with opening up the operation and beginning to produce medical marijuana on a commercial scale.
If this tedious process does not sound up your alley, do not apply. Give that limited spot to another marijuana company that might want it. Consider opting for personal use cultivation, in correlation to the laws and regulations mentioned earlier in this article.
In conclusion, even though the process involved in getting the necessary permit to grow medical marijuana legally can be long and tedious, if you have the passion and desire to grow medical marijuana and are willing to do the hard work involved, then it is worth submitting an application.
A lot of people are not aware that, even if you do not apply for a grower’s license, some states allow the cultivation of herb for personal use, so long as there is no intent to sell or distribute the product in any manner. In other words you should consider if simply growing small amount of plants at your home will be the best for you as opposed to turning medicinal marijuana into a full-blown business.
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