With the legalization of cannabis usage for adults age 21 and older in the state, the time may be right to open your Rhode Island cannabis business.
To do that, you’ll first need to form a viable business entity, ensure you meet all of the state and municipal regulations, and secure a cannabis business license.
Abiding by the legal and regulatory requirements can be challenging if you have never opened a cannabis business before — and even if you have opened a business elsewhere in the country, the regulations vary from state to state.
With the assistance of our cannabis business attorneys, you can form a profitable business that stays on the right side of the authorities from the start and works to achieve your short, mid and longer-term goals.
Getting it right from the start
To obtain a license and be in a position to start operating your cannabis business in Rhode Island, you need extensive preparation.
To form a viable cannabis business, you will need to:
Ready your business entity to meet the requirements of the licensing process by executing corporate documents, leases, and real estate agreements. You will need corporate documents, such as Articles of incorporation, corporate bylaw documents, partnership agreements, certificates of good standing, and so on.
Secure a state license to operate — this is a competitive process that leaves no room for error. The state application process is very detailed and with adult-use cannabis recently legalized in Rhode Island, you are likely to be up against numerous other entrepreneurs seeking the same outcome.
An experienced attorney at Cannabis Law Solutions can assist with both elements of your business formation to ensure a smooth business startup.
What types of cannabis businesses can you operate in Rhode Island?
In fact, cannabis cultivation businesses are among the most complex to set up because of the land requirements and expertise required to grow cannabis commercially. This leads to relatively high startup costs.
However, there are numerous other ways to contribute to the development of the cannabis industry in Rhode Island, such as by opening a retail or manufacturing business (which processes the raw material into cannabis-based products).
Certain ancillary businesses that do not involve growing or selling cannabis can also provide a possible entrance into the industry.
Regardless of the type of cannabis business you want to start, there will be some significant startup costs and strict licensing requirements.
Types of Rhode Island cannabis business licenses
Rhode Island issues five types of adult-use cannabis business licenses that allow you to conduct certain cannabis-related business activities in the state. These are:
Product manufacturer (or Processor)
Hybrid retailers (for both medical and adult-use cannabis)
Talk over your options with one of our cannabis lawyers if you are unsure of the license type that you need.
Eligibility for a Rhode Island cannabis business license
To apply for a cannabis business license in Rhode Island, your business needs to meet each of the following requirements:
All owners must be over 21
No owner can have any disqualifying convictions
Your applying entity must comply with all tax obligations
Rhode Island residency is not currently an eligibility requirement so you can apply for a cannabis license here regardless of where you live.
However, with the laws rapidly evolving here (and in many states), it remains to be seen whether residency will be a future eligibility requirement.
The Rhode Island business formation and licensing process
Whether you want to grow, manufacture or retail cannabis in Rhode Island, trying to form your business without the right legal advice is inadvisable.
Cannabis businesses face licensing and compliance requirements that few other industries face. It’s important to go in with your eyes wide open to the risks and requirements, as well as the potential gains.
The license application process is complex and competitive, with a limited number of licenses available. The first license application round in Rhode Island will be for adult-use cannabis retail licenses, with the state issuing 24 cannabis retail licenses to new applicants in different “zones” around the state.
Amongst other documents, you will need to submit the following as part of your cannabis business license application:
Inventory tracking plan
Local municipal approval
Regulators will scrutinize each application, so you must be fully prepared for the process and submit a flawless application.
If you are fortunate enough to be awarded a license, you can expect your business to face ongoing scrutiny as industry regulations in the state bed down and continue to evolve.
How can our Rhode Island cannabis attorneys help you?
Our attorneys can assist you with both forming your business and managing the application process. We’ll share our knowledge of the regulatory landscape and the process of securing business licenses in other states that have legalized recreational cannabis.
We can also assist with inspections that may be required in the future after your business is up and running.
Developing a partnership with a knowledgeable attorney at the start of your journey in the cannabis industry in Rhode Island can help you not only establish your business but protect it and grow it.
For informed legal advice, call 866-329-0729 for a consultation with a knowledgeable cannabis attorney 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.
McKenzie and her firm were definitely awesome. She was conscientious of my money, and made efforts to let me help to decrease the expense of my case. I was not confident about my chances of success before hiring her, but once I did, I slept so much better. Definitely the best choice (and I met with a few!)
These guys rock!!! Met with McKenzie about an issue I needed some help on. She was honest, professional and gave great direction that was easy to follow and solved the problem! Legal Solutions of New Mexico conduct themselves unlike any other lawyers I’ve ever seen – starting with their website, all the way through to the personal attention they provide! They are direct and get the job done while keeping their clients interests at heart. 10/10 would recommend to anyone needing legal help.
“One of the best for sure”
McKenzie St.Denis is THE best! She’s very thorough and listens to you. She gives the best recommendation based on YOUR needs and wants. She genuinely has the clients best interest at heart—no doubt. I definitely recommend her as she has integrity—super sharp! One of the best for sure. Thank you so much, McKenzie!!!
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