Cannabis Distribution License Cost, Fees, Application [2021 Guide]
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Legalizing cannabis in several states has created an avenue for several people to showcase their interest in the industry. One of the activities that have attracted a lot of attention is the rise of cannabis distribution. In the last decade, cannabis distribution has become a significant income source across the states, hence the high demand for licenses.
Getting a distribution license allows you to carry out various activities which a cannabis dispensary license cannot. Without further ado, let’s get deeper to help you understand why you need a cannabis distribution license.
Responsibilities of a Cannabis Distribution License Holder
A cannabis distribution license is not your standard license since it cannot limit your functions. Owning the license allows you to perform the following duties:
· Transporting cannabis (products)
The primary function of a licensed cannabis distributor is to transport cannabis or cannabis products is from or to other premises. Before issuance of the license, you must prove that the products will be in safe hands.
· Recording and tracing transactions
Owning the cannabis distribution license means that all transactions carried out under you are recorded. Accountability of transactions means that you are responsible for tracing any transactions that might not reflect. You have to be accurate in recording transactions to avoid the hassle of tracing any missing transactions.
· Performing quality assurance
As a cannabis distributor, you must ensure that the quality of packaging. There are several specifications on the packaging that cannabis distributors must meet. You should also ensure that the products meet all the quality standards before you distribute or sell them. Therefore, when applying for the cannabis distribution license, you should prove that you can perform quality assurance.
· Purchasing cannabis (products)
As a licensee of cannabis distribution, you can buy cannabis flower buds or other cannabis products from growers, premises, or other companies. As a distributor, it is your responsibility to ensure that you have purchased enough vape cartridges, edibles, extracts, and other cannabis products to supply to other areas.
You’re also required to have adequate information about the cost of the products. Having this information will help you to make the right purchases and still maintain the right profit margins.
· Storage, tracking, and transport to retailers
A cannabis distribution license allows you to store products before availing them to retailers. You can store some cannabis products as they await packaging. Once you dispatch the products to another destination, you should keep track of the journey to avoid glitches. Similarly, you should keep track of the sales to reduce incidences of losses or stock that cannot be accounted for.
As a cannabis distributor, you are also expected to transport the cannabis flower buds, edibles, vape cartridges, and extracts to the respective destination. Transporting cannabis or affiliate products instead of hiring a driver is cost-saving. Cost-saving benefits explain why the demand for cannabis distribution licenses is in high demand.
· Selling products to retailers
As a cannabis distributor, you are allowed to sell the products to other licensed retailers. You can sell cannabis products to both delivery retailers and storefront retailers. The versatility of responsibilities makes the cannabis distribution license one of the most sought after in the market.
Tips on how to get fast approval for a cannabis distribution license
Distributing and selling cannabis products, especially for recreational purposes, is one of the most challenging things to achieve. The complex process of approving applications and the high rate of losing licenses make the business risky. The good news is that you can avoid these frustrations by following the following simple pro tips:
· Having a good relationship with the local community
Your relationship with the local community is very crucial and, as a result, must be given priority. Before you apply for the license, it is prudent to establish a good rapport with society to reduce litigation chances. Having a good relationship with society also helps people to understand your motives.
If regulators establish a good relationship with society, the chances of your license being approved increase exponentially.
· Establishing a good location
The location of a cannabis distribution center is a huge determinant of whether your application will be approved. The proposed site should be away from schools, places of worship, and other social places. Keeping the safe distance increases the chances of your application being approved.
· Make your applications outstanding
As the demand for cannabis distribution licenses goes up, so are the applications. Given the high number of applications that regulators receive each day, your application might be rejected easily. The primary reason for rejection might be due to the style of writing the applications.
As an applicant, you should make your application outstanding. If you are not sure how to make your application stand out, you can engage consultants for guidance.
· Make sure all details are in place
During the licensing application, you should present a clear strategy on how you will keep security at optimal levels. Other things that you should present include how to manage revenues and make payments.
· Involve qualified consultants
The volatility of the cannabis industry makes it hard for novice business enthusiasts to understand the tips of applying for the license. Therefore, involving experienced consultants in the license application process increases the chances of getting approved.
The consultants can help you in drafting the application and advisory services.
· Understand how the license approvals operate
Every state operates differently, and as a result, cannabis distribution licenses might be approved differently. States such as Colorado, California, and Nevada have the friendliest laws, while Mississippi, Georgia, and Kentucky have the stringent by-laws.
Before applying for the license, you should research how the state operates to prepare adequately.
· Only work with the best team
Since you know the rigorous process of vetting which licenses to approve, you should present your strongest team. The strength of your team depends on the members’ competence and integrity.
The competence of your team depends on their qualifications and experience. When recruiting a team, ensure that they have the highest qualification possible to increase the chances of approval. Besides the qualifications, make sure that the members are experienced.
You should also ensure that your staff does not have any criminal past since it might lower the chances of approval.
· Set enough funds aside
When applying for the cannabis distribution license, you must prove that you are in a position to deliver. Your budget must prove that you can buy cannabis products, pay staff, licensing, and cater to operations’ cost.
You can prove your financial ability by presenting the regulators with your bank statements, cash flow, and bank balance. Having enough funds increases your chances of license approval.
Cannabis Distribution License FAQs
The complexity of obtaining a cannabis distribution license has led marijuana enthusiasts to raise several questions on the subject. The following are the frequently asked question on the licensing of cannabis distribution:
Where should I submit my application for a cannabis distribution license?
Each state has a unique place where they can submit their application form. In some states, you are required to apply with the Secretary of State’s office. Other licensing bodies that receive the application include the Department of Taxation and the Bureau of Cannabis Control. You should confirm with your body which body accepts the cannabis distribution license’s application.
Should my team members be licensed to work in the cannabis distribution category?
According to federal law, all employees in the cannabis distribution department must be licensed for accountability purposes. Drivers, marketers, and other members of the distribution department are required by law to own a license.
Which products can I distribute after getting a license?
The products that you can distribute after getting licensed vary from one state to another. However, most states allow license holders to distribute more than one product line. As a result, you can be allowed to distribute both medical and recreational cannabis products.
Is there a fixed cost for obtaining a cannabis distribution license?
Each state operates under special by-laws, and therefore, the requirements may vary. However, states with strict rules on the cultivation, distribution, and sale of cannabis charge more.
Where should I locate my business?
Your cannabis distribution center must be located a certain distance from school, places of worship, and other social places. The standard distance from these areas is 500-foot, although state by-laws might dictate otherwise.
Final Thoughts on Cannabis Distribution License
Getting a cannabis distribution license is every cannabis business enthusiast’s dream —unfortunately, the process of licensing pushes most of the people out, which is disheartening. However, from the article above, you have known few tips that you can apply to get approved easily.
Instead of whining about unfairness on licensing, you should implement these tips and go above and ahead to research more about the licensing process. One of the priceless tips to implement is working hand in hand with your consultants. Want help getting a cannabis license? This is what we do! Contact us, and we can help expedite your cannabis license applications.
Interested in learning about other cannabis license types?