The competition for Rhode Island cannabis licenses is fierce, with only a limited number of licenses made available in the first rollout.
With cannabis retail sales scheduled to be legal from the end of the year in Rhode Island, growers, manufacturers and retailers are gearing up for the license application process. But it can be arduous with no guarantee of success — and mistakes can lead to costly delays or legal issues.
Your best chance is with the advice and assistance of a Rhode Island cannabis attorney with experience in licensing issues.
At Cannabis Law Solutions, we have followed the legalization process in Rhode Island closely and have built a comprehensive understanding of the various laws. We have assisted many entrepreneurs around the country to enter the cannabis industry in recent years.
We can help you capitalize on the business opportunities here for growers, manufacturers, and retailers — starting with securing a business license.
Types of Rhode Island cannabis business licenses
Prior to the legalization of adult-use cannabis in May 2022, Rhode Island allowed only limited medical-use cannabis in so-called “compassion centers” dotted across the state. Licenses were issued for this and for cultivators supplying these centers, the first of which opened in 2013.
Under the Rhode Island Cannabis Act, five types of adult-use cannabis business licenses have been made available in the state:
Product manufacturer (or Processor)
Hybrid retailer (medical and adult-use cannabis)
Each type of business license permits only certain operations within the cannabis industry. To determine the license type best suited to your intended business, speak to one of our cannabis business attorneys.
Eligibility for a cannabis license in Rhode Island
To apply for a cannabis business license in Rhode Island, you must meet the following basic eligibility requirements:
You (and all owners) must be over the age of 21
You (and all owners) must be free of disqualifying convictions
Your business must comply with all tax obligations
What other license requirements and selection criteria apply?
Besides the basic eligibility requirements to apply for a cannabis business license, you will need to submit a variety of documentation to demonstrate that you intend to run a lawful and safe business that is of benefit to Rhode Island state.
The application instructions have not been finalized but the Rhode Island Cannabis Act demands that aspiring cannabis business owners submit the following with their applications, (at a minimum):
Your operating/business plan
An inventory tracking plan
A financial plan
A security and safety plan
Proof of compliance with state and local regulations
Local municipal approval
The precise documents you will need are best discussed with one of our Rhode Island cannabis license attorneys…
Financial requirements for a Rhode Island cannabis license
No minimum capital requirement applies in Rhode Island when applying for a cannabis license.
However, when you apply, you are expected to demonstrate that you have the significant financial resources required to operate a business for the first two or three years — with proof of a certain level of liquidity, cash on hand, and/or CPA and/or bank letters.
High costs are associated with operating cannabis businesses and the Cannabis Control Commission, which oversees the industry in Rhode Island, will want assurances that you can meet your financial obligations.
You will need to disclose the financial situation of all owners and investors in your application.
Real estate and zoning in Rhode Island
Rhode Island has set requirements for cannabis businesses to be located at least 1,000 feet from schools.
Local municipalities will also implement further zoning restrictions that are yet to be decided. Your cannabis attorney will be familiar with the relevant real estate and zoning restrictions and be able to advise you accordingly on the location of your business.
You are required to already possess real estate during the cannabis license application process and six different regions within Rhode Island have been defined.
The six cannabis retail license zones in Rhode Island
The limited cannabis retail licenses available for Rhode Island will be spread around six distinct geographic zones within the state. These zones are as follows:
Zone 1: Burrillville, Cumberland, Glocester, North Smithfield, Smithfield and Woonsocket.
Zone 2: Johnston, Lincoln, North Providence, Central Falls, and Providence.
Zone 3: Coventry, Foster, Scituate, West Greenwich, and West Warwick.
Zone 4: East Greenwich, North Kingstown, Cranston, and Warwick.
Zone 5: Charlestown, Exeter, Hopkinton, Narragansett, Richmond, South Kingstown and Westerly.
Zone 6: Barrington, Bristol, Jamestown, Little Compton, Middletown, New Shoreham, Portsmouth, Tiverton, Warren, East Providence, Newport, and Pawtucket.
You will need to apply for a business license to operate in the corresponding geographical zone where your business is to be located.
How can our Rhode Island cannabis license attorneys help?
Whether you want to grow, manufacture or retail cannabis in Rhode Island, getting set up without the right legal advice is asking for trouble.
The license application process is complex and competitive, with a limited number of licenses available.
Besides these challenges, if you are awarded a license, the eyes of the entire state will be on you so it’s important to be able to navigate the legal hurdles that arise.
Our attorneys can provide the knowledge and support you need to plan, incorporate and grow your cannabis business — starting with your application for a Rhode Island cannabis license.
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.
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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