Are you tired of relying on expensive consultants that charge tens of thousands of dollars to help you with the cannabis dispensary permitting process? Look no further! In this blog post, I’m going to share with you everything you need to know about applying for, competing, and winning a cannabis dispensary permit and license through a competitive Request for Proposal (RFP) process.
First, I’ll walk you through the basics of what an RFP is and why it’s important. Then, I’ll dive into the key components of a successful application, including the business plan, operating plan, inventory and tracking plan, and security plan. Along the way, I’ll share my personal pro tips to help you stand out from the competition and increase your chances of success.
While there are two types of permitting processes for a dispensary – non-competitive and competitive – we’ll be focusing on the latter. A competitive permitting process means there are a limited number of permits available, which translates to less competition and more opportunities for your business to thrive. However, this process can be a roller coaster ride, which is why I’ll teach you what to expect and how to pace yourself for success. Remember, steady wins the race; this is a marathon, not a sprint.
So, whether you’re a seasoned cannabis entrepreneur or a newcomer to the industry, get your game face on, and let’s play to win! With a strong determination and a well-thought-out plan, you can succeed in the competitive cannabis dispensary permitting process without breaking the bank on expensive consultants. Let’s dive in!
What is Request for Proposal (RFP)?
Let’s start by going over some important terms. The first term is “municipality”, which refers to a local government entity such as a city, town, or county. The second term is “RFP”, which stands for “request for proposal”. When a municipality releases an RFP, it means they are looking for proposals from qualified individuals or companies and will use these proposals to select a winner and issue permits.
Don’t be intimidated by the RFP process; it’s similar to a book report you may have done in school. The RFP document will have three main sections: first, the ordinance or law that governs cannabis businesses in the municipality; second, the rules of the RFP, such as deadlines and submission requirements; and third, the items you need to respond to, including a business plan, security plan, land use plan, financials, and community plan. It’s important to thoroughly read and understand the ordinance and RFP rules, and to respond thoughtfully to all items. Failure to follow the rules or demonstrate an understanding of the law can result in lost points or disqualification.
How to get started?
To increase your chances of winning a cannabis dispensary permit, you need to think like the professionals who will be reviewing and grading your application. Imagine the consequences of choosing the wrong applicant, such as a dispensary that experiences theft or robbery due to a poor security plan. Your goal is to make your application stand out by addressing every detail that can set you apart from the competition.
Most municipalities use a checklist to ensure that all key points are covered, with the rest of the grading being done on a curve. This means you don’t have to be the best applicant in the world, just the best in the group that applied. Having real management experience and a deep understanding of the cannabis industry can give you an advantage over attorneys and consultants who lack this expertise. So include every relevant detail from your experience and knowledge to improve your chances of success.
Here are the RFP Sections you must know:
The Business Plan
The cannabis RFP will require you to submit a business plan, which is a story of your business and its core activities. It will describe how you plan to operate, market, fund, and secure your business in a compliant manner. You will need to answer questions such as who you are, what motivates you, and why you are doing this. This is an opportunity to showcase what makes you unique, and you can use personal experiences or community-based reasons to stand out.
Your business plan should be an overview of your entire application and should convince the reader that you will run a successful, safe, and compliant business. When it comes to your team, consider putting together an advisory board to show a well-rounded knowledge base. This is a great way to build a team without giving away equity, but be sure to manage expectations and proceed with caution, as a large team can be burdensome and lead to additional paperwork.
Operating Plan
The operating plan is a vital component of the application process, as it gives a detailed description of the day-to-day operations of your business. This plan needs to be extremely thorough and support the goals outlined in your business plan. For instance, if you state that you will provide a safe and clean environment, your operating plan needs to detail the cleaning schedule and security protocols to support this. Additionally, it needs to include sourcing new products and how often you will refresh inventory. You need to account for every decision you make in the operating plan throughout the entire document, so be cohesive in your writing. This means going through every job position and describing their daily duties.
You need to consider the small details, such as how employees clock in, what happens when a customer or patient enters your store, and how their information is managed. Make sure that job descriptions are consistent throughout the document and that they show up again in the hiring section and financials. This level of detail ensures that you are compliant with state and local laws, and helps convince the reader that you are capable of running a successful and compliant business.
Inventory & Tracking System
In this section, the focus is on the importance of having a solid security plan when applying for a cannabis dispensary permit and license. The municipality will be looking for any potential weaknesses in your plan that could lead to theft or other security breaches. Therefore, it’s crucial to have a detailed plan that addresses all possible risks.
The best way to build a strong security plan is by using a point of sale (POS) system that is compliant with state regulations. Most POS companies have extensive information on compliance and can provide materials and visuals that can be included in the RFP to demonstrate the security measures in place. Utilizing these resources can give a professional look to your plan and help ensure that your application is taken seriously.
Site Plan
In this section, we’re going to talk about my location and physical property. Where my proposed site is located is critical to the success of my business. We all understand that location matters, but it matters even more so in the cannabis industry. If my site is across the street from an elementary school, more than likely that will not be allowed, and even if it is, I run the risk of angry organized parents attempting to block my application. I definitely don’t want that. I was once in the application process where the county allowed for dispensaries to be in this one specific section of town. While there were some kids from a local high school that crossed the adjacent bridge to get to the school. Even though we were far away from the location of the school, the parents organized and told the county that they did not want dispensers to be in the line of sight of their high schoolers. While the parents quickly won that battle, the entire process was canceled, and all the applicants were out of the money they had spent. It was a total bummer.
In order to avoid such a situation, I need to make sure that I get formal approval from the building and zoning department for my proposed location. It is important to get this approval in writing and attach a copy of the email or approval letter to my application. Additionally, it is essential to understand the future plans for the area and ensure that they work for my business needs. For instance, if a neighboring building is scheduled to be demolished for a high-rise construction project, it may be great in the long term, but it could clog traffic for several years. If my landlord also has plans to demolish my building for a future high-rise project, it’s best not to invest a significant amount of money into the property and consider looking for another location.
This section will likely ask for the following, and if they don’t ask for it, I should include it just to be thorough. Number one is a land use application. A land use application simply means the human use of land. Sometimes, this is as simple as getting a letter, but most times it requires a floor plan and a site plan.
Location Map
When it comes to your proposed site, it’s important to have visuals to support your application. Start by identifying the exact location, including the zoning and the type of building, whether it’s retail, office or warehouse. You should also consider the history of the property, and what it was used for prior to your proposed use. It’s important to be aware of any nearby sensitive uses, such as parks or schools, and how they may affect your application. Providing this level of detail will help the reader better understand your proposed site and why it’s a suitable location for your cannabis business.
Traffic Analysis
You want to consider if the area where you plan to open your dispensary is already congested with traffic. If so, you need to think about how the dispensary will impact the traffic flow in the area. There’s a possibility that the dispensary could have a beneficial impact, but you need to demonstrate that in your application.
Parking
Is there limited parking already?
Crime Statistics
There are plenty of studies that show bringing foot traffic to an area can reduce crime, so if this area has high crime rates, use those statistics to your advantage.
Site Design
When it comes to designing the security system for your dispensary, it’s important to think about the floor plans. Use this opportunity to demonstrate how you will be a good neighbor by including plans for neighborhood safety, odor control, noise abatement, and waste reduction. By addressing these concerns, you can show the municipality that you are committed to being a responsible business owner and community member. Consider including statistics or studies that support the effectiveness of these measures in reducing crime or improving the local environment. This will give your application an added level of credibility and help to demonstrate your expertise in the industry.
Community Benefits
This section is all about community benefits, which may or may not be included in your RFP. To stand out, it’s recommended to add this section to your application. Community benefits describe how you plan to integrate with your local community and make it a better place. This can include hosting events, hiring local vendors and employees, offering senior discounts, and even giving a portion of your profits to charity.
You can also think of creative approaches to help your neighborhood, such as planting flowers or abating graffiti. It’s better when other people can vouch for your contributions, so consider giving examples of things you’ve done in the past, such as donating money or volunteering for causes. You can also ask for letters of support from your neighbors to show your character and the type of person you are. These letters can be used for other applications in the future.
Security Plan
This section is crucial for any cannabis business, and it’s important to get it right. To do so, it’s recommended to hire a security professional, preferably someone with local connections and expertise in the field. It’s important to give them the link to the ordinance and a copy of the security section of the RFP to ensure that they cover all the necessary points. Once you receive the completed security plan, it should be included in your RFP like everything else. To further strengthen your application, you could ask the security consultant to provide an additional letter of approval for your plan.
The main objective of the security plan is to demonstrate how you will ensure the safety of customers, patients, vendors, and staff, as well as how you will prevent inventory from getting into the wrong hands. This includes having floor plans with man traps and different access points for deliveries and staff, identifying the location of cameras, panic buttons, key fobs, and implementing security clearance and background checks for all personnel. It’s also important to consider whether you will have security guards, whether they will be third-party or internal, and their training in case of emergencies. You should outline how you will identify and handle potential threats and how product transportation will be handled. Additionally, demonstrating your willingness to cooperate with law enforcement and providing timely access to recorded footage is essential.
Hiring an Employee Practices
In this section, the focus is on hiring and employment. It’s important to consider whether you’ll be hiring locally and how this ties into your community benefits section. It’s essential to have a cohesive document, so you need to think about how you’ll recruit staff, how many jobs you’ll create, and whether you’ll offer benefits or be a union shop. It’s crucial to cross-reference local and state laws to ensure compliance. For example, if you plan to exceed 25 employees and state law requires unionization after 20 employees, you may want to consider getting a neutrality agreement from a respected union with lobbying power.
Product safety and labeling
In this section, labeling and testing of products are discussed, which is crucial if you’re in a region that is in the early stages of regulation. You want to ensure that every product meets the standards you uphold, and you need to include this in your application. This includes details such as manufacturer date, expiration date, and third-party test results and nutrition facts.
You also need to mention any state-mandated warnings and make sure that each product complies with these requirements. It’s essential to touch on how your products will be tested and how they will be labeled, whether they come to you pre-labeled or not. You should consider whether the labeling process is compatible with the inventory system you will be using. It’s also important to have a plan in place for products that do not pass testing or have expired. Ensure that you go through all the details to make sure you cover everything.
Financial Section
In the financial section, you need to include a standard three-year performer, which most municipalities require. There are three main points to consider in this section. Firstly, you need to provide an accurate picture of the cost to start your business and the expenses you will incur going forward. These expenses will be one-time and recurring, such as construction costs or payroll. Secondly, you need to demonstrate how long it will take to start earning money and when you will be profitable. You should have access to enough capital to run your business in the red for a year and a half to three years. It’s essential to demonstrate that you have access to funds even if you don’t have them in the bank. In addition, consider the taxes and permit fees associated with the cannabis industry and plan accordingly. Remember to include all costs, projected revenue, startup costs, equipment and inventory insurance, payroll, and margin on the product. Ensure that you can clearly explain all your expenses, plan to pay your taxes, have insurance, and can provide proof of funds.
Here’s a pro tip.
- For those who are new to cannabis entrepreneurship and want to be actively involved in writing a license, the best starting point would be in their own hometown or a place they’re very familiar with. This is because it’s much easier to navigate a government-led process in a town you know well, rather than a place where you’re unfamiliar with the landscape and don’t know the key players.
- Attending all meetings and hearings before a city releases an RFP is crucial, and it’s even better if you can attend them in person. It’s essential for them to see your face and for you to be involved in the discussion. Sign up to speak and make your voice heard, as this is an excellent opportunity for council and committee members to get to know you and your values. When they review your application, they’ll recognize you and appreciate your meaningful input in the process. Additionally, being present during the ordinance and RFP process will teach you valuable lessons that will help you win. Remember, showing up is half the battle.
- Pay close attention to the state and city websites as they often provide an FAQ page with valuable information to help you succeed. These pages contain questions that others are asking and can be an excellent resource to gain insight into the application process. Keep in mind that any question you email to the city will also be added to the FAQ page, so be strategic with your inquiries. In-person communication can be a helpful way to ask specific questions that you don’t want to share with competitors. For example, one crucial question was how the city measures the 700 feet required between a dispensary and any location catering to youth, such as schools, parks, and churches. Understanding whether they measure the distance as the crow flies or path of travel can impact the amount of available real estate for your dispensary.
- Repeating information in multiple sections of your application is okay, even if you feel like it’s becoming repetitive. Some municipalities score each section separately with specialized people, so they won’t even know that the information is being repeated. However, if you’re uncomfortable with repeating yourself, you can always refer to a previous section for further details. For example, you could write “please see Section X located on page y for further details,” so that if the application is broken up, the reviewers will know where to find more information.
- Following directions is crucial when submitting a license application. Even small details like font size and pagination can make a big difference. It may seem trivial, but not following instructions could result in your application being rejected. If you can’t follow basic guidelines, it may raise concerns about your ability to run a successful business. So, take the time to carefully read and follow all the instructions provided.
So that’s the end of my list on how to write an RFP, and I hope you’ve gathered a lot of valuable information from this post. I want to emphasize that you don’t have to feel pressured to hire expensive consultants and attorneys, as there’s still room for you to DIY these applications. If you need further assistance, templates are available here https://highsalwa.com/business-downloads.
