New Cannabis MarketsPosted October 21, 2022 in Cannabis Business
Our focus at Wicker Law Group is working with cannabis businesses and providing them with legal counsel. This involves a broad scope of services such as forming the corporation or LLC, assisting with obtaining local and State government permits, investor agreements and corporate regulatory compliance. Another important aspect of working with cannabis businesses is keeping our clients and potential clients up to date with cannabis legislation and any new opportunities that arise out of such legislation.
Local Elections Bring New Opportunities for Cannabis Entrepreneurs
This November of 2022, more than 25 municipalities in California are planning to include cannabis ballot initiatives to establish recreational cannabis businesses. These municipalities include cities such as Baldwin Park, Claremont, Dana Point, El Segundo, Hermosa Beach, Huntington Beach, Manhattan Beach, Redondo Beach, Riverside, Sausalito, Ontario and many more.
In total, these voter-led ballots could lead to 125-150 new retail licenses for cannabis businesses throughout California. In addition to new retail licenses in municipalities which previously barred commercial cannabis businesses, counties such as Los Angeles County, Sacramento County, and San Diego County are adding cannabis tax ballots in November to potentially add even more licenses.
According to the Department of Cannabis Control (DCC), the current California State agency that licenses and regulates cannabis businesses, 61% of cities and counties do not yet allow any retail cannabis business. Currently, there are only 1,100 licensed dispensaries and 470 licensed delivery providers throughout the entire state of California. Most of these businesses are clustered into the most populous municipalities such as Los Angeles, San Francisco, and San Diego. These new ballot initiatives may help to remedy what are known as “retail-access deserts” which are like “food deserts” but instead of geographical areas with a lack of access to healthy food choices, these areas suffer from a lack of access to licensed retail cannabis distributors. This historical lack of access in populous areas such as Orange County is especially harmful to medical cannabis patients and contributes to the perpetuation of the illicit cannabis market in which cannabis products are sold without testing or regulation of any kind.
These potential new licenses provide new opportunities for those trying to enter the cannabis industry but have found it difficult to find a location or municipality with available licenses. Many retail licenses for commercial cannabis businesses have already been taken and are on the market with prices well over $1 million. The reason for the the high financial barrier is the scarcity of local permits and the challenge of meeting dual state and local licensing requirements.
A Local Government Permit Must Be Obtained Before A State Cannabis License
In order to obtain a State license for a cannabis business, it is first required that you obtain a permit from a local government where the business is located. Each city and county throughout California is able to regulate cannabis businesses as they choose. Some local governments have seen the benefits of a legal, regulated cannabis market and are offering a wide variety of permits. Other local governments are studying the issue and may choose to make permits available in the near future, evident by the municipalities listed above.
There are two ways to obtain a cannabis business permit. One way is to start from the ground floor. The starting point for this path is to first identify a city or county that is offering a local permit for your planned cannabis business. Once you have obtained a location in an area that is in a permitted zone, then you can begin the local permit application process. A key service of Wicker Law Group is working with cannabis entrepreneurs to obtain the necessary local and State licenses.
Purchase A Turnkey Cannabis Business Without Delay
Another way to obtain a cannabis business permit is to purchase a company that already has a cannabis business permit. Our office works closely with Green Life Business Group, Inc. They are the largest cannabis business brokerage in California. The Greenlife Business Group website has many listings which include retail stores, delivery, cultivation, delivery, manufacturing, micro businesses, and other licensed cannabis business listings. You are welcome to inquire about any Greenlife listing through our office.
Cannabis markets in the US are expected to reach $33 billion in sales by the end of the year 2022 and projected to reach over $50 billion by the year 2026. These growth projections highlight the opportunities for cannabis business entrepreneurs. Do not hesitate to contact our office for any questions.