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How to Get a Cannabis Business License

How to Get a Cannabis Business License

Some 6.5 million businesses are launched every year, and one of the common denominators is a business license. However, when you start a cannabis business, the process is a bit more complicated due to restrictions in our industry. 

What You Should Know About the Cannabis Business business paperworkLicense 

Even if it takes a bit more time and effort to accomplish, the startup phase of your cannabis business is important. You’ve just got to get it right to ensure you won't have problems down the road, so be sure to check the regulations and requirements for your state and be sure that you’re covering the different types of cannabis licenses.  

The requirements for your cannabis business will vary not only by state but also by your business category and local (city or county) considerations. In order to operate a legal cannabis business, you must fulfill all the requirements.  

What Are the Basic Requirements?  

Some of the most basic requirements are the same regardless of whether it’s a cannabis business or any other type of business. Here are some of the most common considerations when you’re starting a business.  

Choose Your Business Type: There are a few business structures from which you can choose. Be sure to do your research to weigh the pros and cons of becoming an LLC or a corporation. Especially due to the complicated status our industry has with federal taxes. 

Federal Tax ID #: You can submit an online form to get your Federal tax ID #. This is sometimes referred to as an employer identification number (EIN) as well.  If you prefer a less direct approach, you can have your accountant take care of it for you, mail in the EIN application, or you can call the IRS Business & Specialty Tax Line at 800-829-4933.  

DBA Filing: A DBA (Doing Business As) filing allows a sole proprietor, LLC, or corporation to conduct business as something other than the formal legal name. Your DBA guidelines and laws will differ by state, so check those regulations. Then, determine if your DBA name is unique in your state, but register your DBA at your clerk’s office.  

Sales Tax Permit: Once you have your EIN and other business information, you can go to the Department of Revenue website for your state to register your business for a Sales Tax Permit.  

Before You Apply

business plan Write Out Your Standard Operating Procedures: Creating written operating procedures is a must. Detailing your processes is required by many states for licensing. Consider all areas of your business such as accounting, shipping, security, and more. The more detailed, the better your chances of receiving your cannabis business license. 

Determine Your Budget: To start your business off on the right foot, you need a budget as well as financial projections. 

Create Your Business Plan: In order to seek licensing or funding, a well-thought-out business plan is a crucial step. This plan outlines everything from your strategy, to marketing, to operations, and more. It's a lengthy homework assignment for the prospective business owner, so be sure to be mindful of its many components. 

Get Funding:  Before you apply, you'll need to make investments such as real estate or equipment. It's also essential to prove on your license application that you have access to money. While this seems like a daunting step, there are ways to get access to funding you need. This is a step the team at Canna Business Financing knows a lot about, so be sure to contact us

Completing The Application 

States often only issue a few licenses for cannabis businesses, particularly in the first round. Once the program has matured, they may issue more licenses. The award of the business license is based on an evaluation of your team, business plan, etc. Each state can have additional licensing requirements that go above and beyond the standard aspects of a cannabis business.  

The reviewers of your application want to ensure that you're able to run a successful business without significant problems. Be prepared to give a lot of information about your new business, so take your time. Even though you're excited to be an entrepreneur in this quickly growing industry, this is a stage where you need patience. Since there are a limited number of licenses, you'll need to make your application a formidable competitor. 

What’s the Next Step?

At Canna Business Financing, we have the knowledge and expertise to help you achieve what you need for your cannabis business. We regularly help start-ups and well-established businesses get the business financing that sets them apart from their competition and be the winner in the battle for the business license.  

We know what you need, so we work to make the process as streamlined and simple as possible. Contact us today to learn more about funding options that should meet your needs. We’ll answer all of your questions, and get you started with the pre-approval process, but we’ll also help you understand the challenges, stay compliant, and help you find the workarounds and creative solutions that will ensure your success now and in the future. 

Posted by Canna Business Team



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In an industry that is constantly evolving, Canna Business Financing provides business owners with a reliable source to gather the most up-to-date information. From resources to fund the growth of your business to insights on best practices to scale, look no further!

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