BEYOND LICENSING: HOW TO LAUNCH A CANNABIS BUSINESS

By JEN RANDOLPH REISE

As I write this in late 2024, it appears that 2025 will be the year when Minnesota cannabis businesses can obtain licenses and open their doors at last. The Office of Cannabis Management (OCM) has announced the next application window will be February 18 - March 14 for both social equity applicants and general applicants.

While much attention has centered on the licensure process, it’s essential to recognize that the work doesn’t stop there. Getting a license is a necessary part, but not even the largest part, of building a sustainable, compliant, and profitable cannabis business.

Secure a Compliant Location

Finding the right location is critical. Be aware that local zoning laws may require you to grow, manufacture, or sell from different locations, even if you hold a micro or mezzo license from the state. City laws may also require your business to be a certain distance from schools, parks, other dispensaries, or other sensitive areas and may limit the number of dispensaries in a city. Once secured, prepare your facility to meet safety, security, and regulatory requirements. Retailers should design a customer-friendly layout, while cultivation sites must meet operational and safety standards.

Establish Financial Systems & Raise Capital

With banking access limited for cannabis businesses, you’ll need a strategy to handle cash flow, taxes, and payroll. Seek cannabis-friendly banks, credit unions, or alternative financial service providers earlier rather than later. Develop detailed financial projections to control costs and determine whether you need outside investment. If you do, explore the trade-offs between bank loans, investor debt, and selling equity. 

Solidify Legal & Business Foundations

Hopefully, you already have a legal entity (probably an LLC), an EIN (Employer Identification Number issued by the IRS), and a signed operating agreement (if you have multiple owners). As you negotiate and document essential relationships, engage a cannabis-experienced attorney to review contracts, leases, and compliance obligations and protect intellectual property. Stay on top of changing state and local cannabis regulations.

Build a Strong Team

Your team will define the company’s success. Choose your partners care-fully, and get on the same page about what you are trying to accomplish, division of labor, and finances. Hire
passionate, knowledgeable, employees who are aligned with your company’s mission. Train them on compliance procedures, security protocols, and customer service. Ensure your payroll, benefits, and working conditions meet state labor laws and cannabis industry standards.

Prepare for Compliant Operations 

Operating in a heavily regulated industry will require creating systems for compliance. Create detailed SOPs, and follow them. Maintain logs of employee training, security footage, and financial reports. State inspectors may visit unannounced, so keep your records organized. Empower an internal head of compliance and proactively conduct internal compliance audits to catch issues before inspectors do. 

Implement Inventory Systems

Cannabis businesses must track all cannabis items from “seed to sale.” A point-of-sale software that integrates with state tracking systems and supports real-time reporting is a good investment. Regular audits can prevent theft and ensure compliance. Train employees on proper inventory procedures to avoid regulatory issues.

Create a Marketing & Branding Strategy

Decide what sets your company apart. Is it premium products, a social equity mission and values, or customer experience? Define your brand and ensure it’s reflected in your name, logo, and marketing materials. Leverage digital marketing channels like social media and email. Ensure compliance with advertising laws specific to cannabis.

Be Ready to Adapt

Opening day is a significant milestone, but it’s only the begin-
ning. Be prepared to adjust for market demand, regulatory changes, and customer feedback. Focus on customer service to create loyal patrons. Leverage online reviews to refine your
operations, because word of mouth matters when it's online and available to everyone. And sometimes customers can provide valuable insights regarding their experience of your company.

Final Thoughts

Getting a cannabis license is a big deal, but it’s only one part of the journey. Building a business takes grit, adaptability, and a strong support system. Find your experts in law, finance, marketing, and operations. Compliance is an ongoing process, not a one-time task. Seek support when needed, lean on your network, and stay flexible. The road ahead is challenging, but with preparation, it’s also full of opportunity.

Disclaimer: This article does not purport to be comprehensive or constitute legal advice. Cannabis law, in particular, changes rapidly. Statements herein are the point of view of the author, not the publication, and speak only as of the time they are dated.