2024 has undoubtedly been an exciting year for cannabis business licensing. From New York awarding new cannabis licenses throughout the year to Minnesota opening its first round of adult-use social equity license applications and Kentucky accepting its very first medical cannabis license applications, the cannabis industry has had no shortage of opportunity! 

As more states begin rolling out their medical and adult-use cannabis programs, cannabis license applications have changed, and trends have developed that focus on creating fair, accessible applications and addressing the impact of the War on Drugs. And with these changes come new license types and unique opportunities for local entrepreneurs. 

With so many opportunities on the horizon, having the right support is essential. Make sure you have a team of experts by your side. Canna Advisors is here to help you through every step of the licensing process. Whether you’re diving into new markets or expanding your footprint, they’ve got the know-how to set your business up for success from day one.

But getting licensed is just the beginning—standing out requires a strong digital presence and a rock-solid strategy. That’s where The TOKE Agency comes in. We’re experts in digital marketing and loyalty programs, helping you build a brand that attracts customers and keeps them coming back. Let’s set your business apart and make it thrive!

Trends in Cannabis License Applications

Social Equity Initiatives

One of the most significant trends that have developed across the country is the increase in social equity initiatives that address the impact of the War on Drugs. In many states, most recently Minnesota, state cannabis programs will allocate a certain number of licenses for those who qualify as social equity applicants and, in some cases, allow those applicants to apply before anyone else. That typically means an applicant with at least 51% ownership of the business satisfies one or all of these conditions:

• You live in an area that is disproportionately impacted by cannabis prohibition.
• You or a close relative were convicted of a minor cannabis offense (typically possession or sale).
• You have a lower income than a certain percentage of the median income.
• You are a veteran, person of color, or disabled.

While these are not all of the possible qualifying conditions, and each state will lay out its exact parameters, these are the typical items we’ve seen in recent state regulations and show how states are finally addressing the impact of cannabis prohibition.

Lottery-Based Licensing Process

Another significant shift we’re seeing in the cannabis licensing process is the move from limited, competitive licenses to a more broad, accessible lottery licensing process. This typically means that applicants are required to submit fewer initial plans to qualify for a lottery that will decide who will receive licenses. Since this application process is usually less rigorous than a competitive application, property is not typically required until after licenses are awarded. Once licenses are awarded, applicants will have a certain number of days to submit the rest of their plans and secure a property before becoming fully operational. 

Though this cannabis licensing process may seem simple on the surface, the qualifying materials needed to be entered into the lottery can include:

• Business plan.
• Financial pro forma and sufficient capital.
• Safety and security plans.
• Training and staffing plans.
• Environmental plan (typically for manufacturing and cultivation).

These are just a few examples of what can be required on a lottery application, and each state will have its own specifications that can make the plans more complex. While there’s no guarantee of receiving a license even after submitting flawless plans, the rise of this licensing process has offered a more impartial procedure for awarding licenses.  

Rise of Unique Cannabis License Types

As the cannabis industry continues to evolve, so do the available license types in each state. Unique license types, such as microbusinesses and consumption lounges, have offered new opportunities for entrepreneurs looking to break into the industry.

Microbusinesses for Local Entrepreneurs

While the definition of what a microbusiness entails varies widely from state to state, they commonly appeal to local cannabis applicants looking to open a smaller retail operation that may include opportunities to operate small cultivation or manufacturing facilities. For example, New York cannabis microbusinesses are authorized to cultivate, process, and sell cannabis within specific parameters. At the same time, Delaware only has microbusiness licenses available for cultivation and processes with restrictions on canopy size, number of plants, and number of employees. 

Consumption Lounges for the Local Consumer

Consumption lounges have also seen an uptick in popularity, with states like Colorado and Nevada opening their first lounges in just the last few years. These spaces offer access to a safe and legal place for cannabis users to consume and are particularly helpful for those who can’t or don’t want to smoke in their homes. Additionally, consumption lounges have helped break the stigma of cannabis consumption, creating spaces where the community can come together and consume similarly to those having a drink at a bar. 

Insights for 2024 and Beyond

No one can predict exactly what will happen in this ever-changing industry. Still, after over 12 years of assisting with cannabis business licensing, the experts at Canna Advisors can make some pretty good guesses. Social equity licenses and lotteries seem here to stay, though as new medical states legalize, we could see a return of competitive licenses for these initial applications. 

As we’ve seen in Minnesota, by creating a mezzobusiness license type, the state will always try to make its program unique and offer new opportunities for business owners. With pressures like possible litigation in other states and wanting to create the perfect program, we’re sure the industry will continue to change state by state, offering a new landscape with each new set of regulations.

License Applications Coming up

Delaware

Delaware opened their first round of adult-use cannabis business license applications on August 19 and will accept applications until September 30. This will be a lottery process with a number of licenses allocated for social equity applicants, so be sure to submit accurate plans free of possible deficiencies. 

Minnesota

Minnesota’s first round of cannabis applications closed on August 12. However, these licenses were only available for those qualified as social equity applicants. Therefore, Minnesota will hold another round of applications for general applicants sometime in October or November. Stay updated on cannabis licensing news with Canna Advisors so you’re ready to apply in the next round!

United States Virgin Islands

Island cannabis is on the horizon in the U.S. Virgin Islands! Staggard application rounds are set to commence in November with micro-cultivation applications and continue with laboratory testing, research and development, dispensary, manufacturing, and cultivation applications. 

Ohio

While Ohio just recently allowed medical cannabis operators to apply for dual operation (medical and adult use), the state will eventually need to expand the program for accessibility. Though there’s no set date, regulations have noted that Ohio will evaluate the number of adult-use facilities 24 months after the medical facilities begin cultivating, processing, and selling adult-use cannabis. So, stay in the loop and start working on your business plan because these licensing rounds can creep up quicker than you expect!

How You Can Prepare for Your Licensing Round

Our partners, Canna Advisors, are ready to assist clients whether they are poised to submit their cannabis business application or just starting to explore the possibilities. With over 12 years of experience in more than 39 state cannabis programs, their team of cannabis experts is equipped to support all application needs, from business planning and financial modeling to start-up preparation and exit strategy.

If you’re in a state that’s just getting a taste of the cannabis market, there’s no better time than now to get your business rolling. Let us help you lay down a rock-solid foundation, so you’re set to soar as the industry blooms. When you’re ready to turn your vision into a reality, reach out to experts like us at The TOKE Agency. We specialize in crafting customized solutions designed to amplify your ROI. By developing tailored loyalty programs and focusing on strategies that enhance customer satisfaction, we ensure your brand not only meets but exceeds your business goals. Let us help you build a groovy brand that resonates deeply with your audience and stands out in the competitive cannabis market.

Key Takeaways

• Social Equity Surge: 2024 witnessed an increase in social equity initiatives, with new policies to correct past injustices in the cannabis industry by prioritizing licenses for affected individuals.
• Shift to Lottery Licensing: Many states are transitioning to lottery-based licensing, which makes the process more accessible and less competitive and promotes a fairer distribution of licenses.
• TOKE’s Impact: The TOKE Agency specializes in transforming cannabis business visions into reality, enhancing ROI and customer satisfaction through customized digital marketing strategies and loyalty programs.