If you’re interested in entering the cannabis industry in Rhode Island following the legalization of adult-use cannabis in May 2022, you may want to consider opening a cannabis retail dispensary.
The regulations are still being drafted regarding the requirements for newcomers to the cannabis retail industry but cannabis usage is now legalized for adults in Rhode Island.
We can expect it to be tightly regulated because safety, health and security concerns remain in some quarters about the recreational use of cannabis.
Experience of the legalization process in other states suggests that there will be stringent licensing and compliance requirements to meet before you can even think of operating a business here.
That said, the potential opportunities for dispensary operators in Rhode Island are exciting.
The lawyers at Cannabis law Solutions have been tracking the emergence of the recreational cannabis industry in Rhode Island for years and can help you secure a cannabis retail license for your business.
Local cannabis laws and restrictions
Under the provisions of the Rhode Island Cannabis Act (the legislation governing recreational cannabis usage in the state), a provision was made for a total of 33 retail licenses in Rhode Island. In-store sales of recreational cannabis in licensed premises may start in December 2022.
The licenses are to be distributed throughout six zones around the state but include three current medical cannabis dispensaries (in Providence, Warwick, and Portsmouth) plus six recently awarded compassion centers, which are in various stages of completion.
This leaves 24 retail dispensary licenses to be awarded by the state’s Cannabis Control Commission, which is tasked with regulating the industry and issuing licenses.
Land use and zoning laws are complex enough in Rhode Island’s 39 municipalities but the issue is further complicated by some local municipalities not permitting cannabis anywhere. Other municipalities enable cannabis sales only if particular conditions are met, such as special use permits.
The Rhode Island League of Cities and Towns said in 2021 that cities and municipalities in the state should be able to opt-out of enabling recreational cannabis usage through their local councils. Newport City and Middletown, for instance, both expressed desires to have the authority to prohibit adult-use marijuana sales in their cities and prevent marijuana dispensary sales.
Some municipalities are against adult-use cannabis sales but would allow cultivation centers and testing sites.
A referendum vote in November 2022 will allow different municipalities to express their preferences regarding cannabis sales.
So, depending on your preferred location, the local laws and restrictions may throw up obstacles to your plans for a dispensary.
The best course of action is to speak to a professional in the know who understands the opportunities here and how to navigate the many potential legal barriers to getting started in the industry.
Adult use cannabis licensing in Rhode Island
The Rhode Island Cannabis Act makes a provision for four other types of adult-use cannabis licenses besides retailer licenses for dispensaries.
Cannabis cultivator licenses
Cannabis product manufacturer licenses
Hybrid cannabis retailer licenses
Cannabis testing laboratory licenses
The hybrid cannabis retailer license is for medical cannabis dispensaries (“compassion centers”), that also want to sell recreational cannabis.
Each license lasts for a year, with renewals set to be granted within 30 days upon receipt of a renewal application and fee from licensees in good standing.
To open a dispensary in the state of Rhode Island, candidates must meet the following requirements:
At least 21 years old
Pass a background check (no criminal convictions)
Compliance with local zoning/rules or municipal approval secured
Payment of a nonrefundable application fee
How much does it cost to open a dispensary in Rhode Island?
The license fee for a cannabis dispensary in Rhode Island is $30,000 annually.
Most of our clients start operations with an initial budget of $400,000 to $1 million for a new dispensary, depending on the size, operations, and location of the retail outlet.
What are the Rhode Island cannabis dispensary zones?
For the purposes of cannabis licensing, the following is a breakdown of the six geographic zones spanning the 39 municipalities in Rhode Island:
Zone 1: Burrillville, Cumberland, Glocester, North Smithfield, Smithfield, Woonsocket
Zone 2: Central Falls, Johnston, Lincoln, North Providence, Providence
Zone 3: Coventry, Foster, Scituate, West Greenwich, West Warwick
Zone 4: Cranston, East Greenwich, North Kingstown, Warwick
Zone 5: Charlestown, Exeter, Hopkinton, Narragansett, Richmond, South Kingstown, Westerly
Zone 6: Barrington, Bristol, East Providence, Jamestown, Little Compton, Middletown, Newport, New Shoreham, Pawtucket, Portsmouth, Tiverton, Warren
How can our cannabis retail license attorneys help?
If you want to sell adult-use cannabis in Rhode Island, trying to set your business up without the right legal advice can cause unnecessary delays, expenses, and legal issues.
The license application process is complex and competitive, with only a limited number available. If you are awarded a license, the eyes of the entire state will be scrutinizing you so it’s important to be able to navigate the legal hurdles that you may encounter.
Our attorneys provide the knowledge and support that you need to plan, incorporate and grow your cannabis business — starting with your application for a Rhode Island cannabis retail license.
For informed legal advice, call 866-329-0729 for a consultation with a knowledgeable cannabis attorney at Cannabis Law Solutions.
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 business licenses
If you want to run a cannabis 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 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 administrative law
State authorities watch licensed and unlicensed cannabis 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 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.
As the cannabis industry emerges in states around the U.S., it is 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.