Are you looking to start a Rhode Island cannabis business?
It’s an exciting road ahead for the cannabis industry in Rhode Island with the legalization of adult-use cannabis in May 2022 and the sale of adult-use cannabis commencing in December 2022.
But it’s not a road that’s easy to navigate alone or without the right legal advice. As a tightly regulated industry and with cannabis still illegal at a federal level, the potential pitfalls when you enter the industry here are many.
The first step when you have your basic business idea together is to apply for a cannabis business license. Even that is not straightforward as it requires considerable documentation and is highly competitive, with only a limited number of licenses available.
With the right legal advice and cannabis business consulting from our industry-savvy lawyers, you will be in a much stronger position to fulfill your goals with your business now and in the future.
Cannabis opportunities in Rhode Island
Prior to the legalization of adult-use cannabis, there were just over 50 independent medical cannabis cultivators and a dozen or so dispensaries in Rhode Island. The medical cannabis market generated over $60 million a year in revenue.
These numbers are set to multiply with the growing demand that legalization of the recreational use of cannabis will create.
There are multiple ways to be involved in the adult-use cannabis industry in Rhode Island — if you meet the eligibility criteria set out by the state’s Office of Cannabis Regulation.
With five types of licenses initially available and retail sales starting in December 2022, the opportunities for entrepreneurs and those skilled in cannabis cultivation, production, and retailing are many.
The license types are:
Product manufacturer or processor license
Hybrid retailer license
Testing laboratory license
For each type of license, you will need to demonstrate not only that you meet state regulations but also local zoning laws. You will need a workable business plan and provide clear indications about how, when and where you intend to operate, with the size and location of your premises specified and your key personnel detailed.
Our cannabis business consultants can help you assemble the documentation required before and after your application (upon approval) and meet the timelines for providing the licensing office with what it needs so that you can start operations as planned.
We have extensive experience around the U.S. in helping startups take the first steps to become operational, establish their businesses, and grow them.
Start-up services for cannabis industry entrants in R.I.
Whether you want to produce, manufacture, distribute or retail cannabis products, the success of your business depends on how well you optimize your setup and comply with the legal requirements set out by the cannabis regulators in Rhode Island.
Our cannabis business consulting services include:
Obtaining a cannabis business license is a complex but necessary procedure in Rhode Island as the adult-use cannabis industry finds its feet.
We have extensive experience in helping business owners prepare applications and secure cultivation, production and retail licenses, as well as other occupational licenses for producers, manufacturers and dispensaries.
No one needs to tell you that growing, extracting, manufacturing, and retailing cannabis products requires extensive know-how. You know and possess that already.
The expertise of our cannabis business consultants is in helping you set up your business so that you have a launchpad for success and encounter fewer issues as you become established within the Rhode Island cannabis industry.
Cannabis businesses in Rhode Island will be under the microscope from the regulating authorities and there is likely to be little tolerance for non-compliance (with fines, holds, suspensions, or closures likely).
Our cannabis business consultants can help you navigate the laws and the guidelines with confidence from the start and, as you become more established, we’ll help you stay up-to-date with the evolving regulations in Rhode Island.
Contract and lease drafting
Cannabis businesses need to specify the premises they will use to secure a license in Rhode Island. This may not be as easy as it sounds as commercial spaces for cannabis cultivation, manufacturing, storage, packaging, and retailing face challenges that other types of businesses don’t face.
If you are looking to purchase or rent out space, our cannabis business consultants can help draft comprehensive cannabis contracts that protect your business from the many risks that affect cannabis startups.
Cannabis standard operating procedures (SOPs)
Cannabis businesses must outline a series of standard operating procedures (SOPs) that are base protocols for business owners when following industry best practices.
Our cannabis business consultants can help you define processes that guide operations in your cannabis business for the years ahead.
How our cannabis business consulting services can help
For producers, manufacturers or retailers looking to enter the emerging cannabis industry in Rhode Island, there are many opportunities.
Our cannabis business consulting services can help you get set up so that you can take advantage of these opportunities for many years to come, helping the cannabis industry in Rhode Island grow and prosper with you.
If you’re starting a business here, you’re going to be a target for the authorities so we can ensure that you are compliant and can support you as you plan, incorporate, begin operations and look to grow a successful cannabis business.
For informed legal advice, call 866-329-0729 for a consultation with a knowledgeable cannabis consultant at Cannabis Law Solutions.
How will our cannabis and psychedelic business services help you
Cannabis & psychedelics business entity formation
Whether you are looking to form a limited liability company (LLC) or a corporation, our experienced business lawyers can discuss the pros and cons of both and help you incorporate your business with the optimal structure to achieve your goals.
Cannabis & psychedelics business licenses
If you want to run a cannabis or psychedelics business, you will need a valid business license issued by your state authority as well as local permits. Eligibility criteria are likely to be stringent and we can help you navigate the often-complex license application process.
Cannabis & psychedelics corporate documentation
Whether you need to prepare for a license application, transfer of business ownership, change of corporate structure, transfer business location or another business process, we can help you identify and draft the documentation you need to operate legally in your state.
Cannabis & psychedelics administrative law
State authorities watch licensed and unlicensed cannabis and psychedelics businesses closely. If you violate regulations, you could face an administrative penalty. Our attorneys can provide representation or help you prepare for an administrative hearing, settlement conference or appeal.
Cannabis & psychedelics disputes and litigation
Whether you have a dispute with another business, a legal issue with one of your partners or a licensing or administrative issue, you may need legal assistance to help resolve it. We are adept at alternative dispute resolution methods as well as civil litigation.
Cannabis & psychedelics regulatory compliance
As the cannabis and psychedelics industries emerge in states around the U.S., they are more heavily regulated than most other industries. We can help your business navigate the red tape and plan to stay on the right side of the regulatory authorities in whichever state you are based.
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Opening a successful and legal marijuana dispensary begins with hiring a knowledgeable cannabis attorney and learning all that you can about this industry and the applicable laws. The next step is to set up a corporate business structure and create a retail business plan, which an attorney can also help you with. You will also need to research potential locations for your business to find out where licensing is legal.
Next, obtain the necessary licensing to operate your cannabis business and ensure that your operational infrastructure follows all laws and regulations. If you are not growing or producing your products yourself, you will need to contract with cultivators and product manufacturers to supply your business.
Before you begin the process of applying for a cannabis license, you need to establish a business from which to apply. The state will not consider an application from an individual; instead, the applicant must be a business entity in good standing with the state.
Your business will begin when you choose a legal entity and file the appropriate paperwork with the Secretary of State. After that, you will file with the IRS and obtain a taxpayer identification number.
You would start with articles of incorporation and include other key corporate provisions in the bylaws that state how your company will be governed. If your business is a partnership or limited liability company, you will need an operating agreement. Depending on your line of business, you may also need other licenses to operate.
In addition, you will also need other corporate documents that the Department of Health will want to see when they are considering your cannabis application. Of importance here, your application would ask you to provide:
Your articles of incorporation
Certificate of good standing
An attorney can help you both choose the appropriate business entity and draft and file any necessary documentation. When you are seeking to enter the cannabis field, it is important to get your business formation process right to make the best possible impression on the Department of Health. Doing so will allow you to devote as much time as possible to your cannabis-related business arrangements.
As a precursor to even being able to apply for state approval of your cannabis business, you must have a properly formed business entity. As a result, the first documentation you must file is the documentation establishing your business.
Next, you will need to obtain a tax identification number by registering with the IRS. In addition, the licensing application also asks you to provide your current state business license registration.
Beyond your general business licenses, you would also need specific permission to operate a cannabis business. This involves a very strict registration process where the state will closely scrutinize your application. You can expect the state to review each of the licenses that they request since it wants to be sure that your business complies with laws before they are granted the right to operate in the cannabis industry.
Compliance means making sure that you follow the myriad of laws that apply to your state’s cannabis businesses. Further, the regulatory landscape is fast-changing as the state gains more experience overseeing the businesses.
What this means for you is that knowledge is one of the most important things that you can have. Not only do you need an expert in the current laws, but you also need to be able to anticipate future changes in the law. This means that each business needs an expert who understands the laws and can advise them as to the best means of following them.
Also, compliance also means that you have sound policies and procedures in place that govern your business. The Department of Health is already looking at your policies when they evaluate your initial application. However, they reserve the right to audit and inspect your business to verify that you are complying with the law. You should always be ready for an inspection by documenting how you are following the regulations.
The best way to show compliance is by keeping your paperwork organized and conducting your own internal audits. The Department is interested primarily in your safety procedures, so you should be ready to show how you are following your own procedures. Further, you should always reevaluate your own policies to see if there are any weaknesses or changes that can be made to strengthen them.
The major thing that the Department of Health is interested in is the safety of both the product and the operation. As a baseline, the state wants to know who all of the owners are and the people who will be working in the operation.
While there are common documents among all the application classes that the Department is seeking, there are also special requirements for each of the categories.
For example, when the Department is evaluating a manufacturing application, it will pay close attention to measures that your business takes to ensure proper hygiene and testing methods. The Department also will pay attention to the manufacturer’s procurement practice and the security of its inventory.
With regard to laboratory submissions, the focus is partially on the testing processes and equipment that the business will use. The Department wants technical, scientific details of the exact tests and the quality control that the laboratory will use for testing. The emphasis is on ensuring product safety.
For courier businesses, the Department will scrutinize the safety and security of the delivery process, including the vehicles and the delivery routes that are used. The emphasis is on the safety of qualified patients, primary caregivers, and courier staff in light of the product being delivered. In addition, since there is interaction with patients, the Department wants to see how the applicant plans on protecting patient privacy.
Cannabis legalization often works in a series of steps. Broadly speaking, cannabis policy reform occurs in the following stages:
Prohibition: Criminal penalties apply for the possession or use of cannabis.
Decriminalization: Low-level criminal penalties are removed for cannabis usage (e.g., personal possession) and criminal penalties may be replaced with civil fines.
Medical legalization: Full medical legalization with commercial licensing and testing may come straight away or in a series of stages.
Legalization: State laws are changed to make any cannabis activity a crime no longer. Cannabis must be removed from the Controlled Substances Act and new rules added for the legal commercial cultivation, distribution, testing, and sales of cannabis.
Oregon and Colorado states have decriminalized the use, sale, and possession of psilocybin, which is the active ingredient in “magic mushrooms” and has been shown to have great value in treating certain medical conditions, like depression, anxiety and life-threatening cancers.
Besides these states, the cities of Oakland and Santa Cruz in California as well as Washington, D.C., Somerville, Cambridge and Northampton (Massachusetts) have all decriminalized psilocybin.
It should be noted that all psychedelics are illegal in the United States under federal law and drugs like MDMA, DMT, ketamine, LSD and psilocybin are Schedule 1 controlled substances. This means they are viewed as having no medical purpose and no legitimate commercial application