Hello! Welcome back. We have exciting news! The Department of Cannabis Regulation (“DCR”) posted the microbusiness license application and associated instructions. The clock has officially started for everyone to get their ducks in a row before application submission is made available. In this blog post, we will look at the information and application released by the DCR and formulate a plan on how you should tackle the application.
As we already discussed, the submission window for applications will be from July 27 – August 10, 2023. We were correct to assume that submission would be through an online registry portal. I want to reiterate that there will likely be issues with this registry portal, so please be sure to leave time to handle any unexpected roadblocks when submitting.
The short application consists of only four pages of fill-in-the-blanks (https://health.mo.gov/safety/cannabis/pdf/mb-application-instructions.pdf ). Do not let this trick you. There is plenty of information and documents in addition to the application itself that you will need to submit. As was anticipated, the following information is identified on the application as required:
- A visual representation of the applicant’s ownership structure, including all entities (and individuals) listed in the ownership section of the application.
- This must include all entities and individuals with any percentage of financial or voting interest. Keep in mind that your numbers have to total 100%.
- If applicable, a copy of the local government requirement replacing the department’s 1,000-foot rule.
- This refers to the rule from DCR that dictates that a license may not be situated within 1,000 feet of any existing elementary or secondary school, daycare, or church. In other words, if the town/city you are applying for licensure has a lesser requirement than 1,000 feet, you must inform DCR and provide a copy of the local rule.
- If applicable, a copy of, and a hyperlink to, local government requirements.
- If the local government (city, town, municipality, township, or county) has enacted any requirements applicable to the proposed license’s facility location, such as zoning restrictions, the applicant must provide a copy of and a hyperlink to all local government requirements. It would be best if you also highlighted the relevant sections for DCR.
- Blueprints or floor plans with rooms clearly labeled, including the purpose and square footage.
- You will also need to identify where security and restricted access areas will be located.
- For individuals claiming majority ownership, documentation to demonstrate eligibility criteria.
- We spent a lot of time on this in the last blog (https://www.stocklegal.com/blog/application-requirements-a-must-read-for-anyone-considering-applying ).
- A valid (non-expired) government-issued photo ID.
- If any individuals listed on the ownership section have submitted fingerprints for a state and federal fingerprint-based criminal background check, an attachment that lists the individual’s name and transaction control number (“TCN”).
In addition to these identified documents, elsewhere in the rules, there are additional requirements for applicants of all license types, micro licenses included. Within this section, we find the requirements for providing a proposed facility location. To satisfy this requirement, you need to be able to give the DCR an address and some form of verification of your right to operate a facility there if awarded a license. This means you can provide proof of owning the land through documents like a deed or proof of having the legal right to operate through documents such as a lease. If you are pursuing a lease agreement, you should work with your landlord to make the lease contingent. In other words, in your document, you must specify that the lease will only take effect if you are awarded a license. If you are unsuccessful in winning a license, you want to ensure you have an out from a lease and aren’t on the hook for years to come. Within this section is also where you find the requirements for providing information regarding the entity (company) that would receive the license if awarded. To provide this information, you must log on to the Secretary of State’s website (https://bsd.sos.mo.gov/) and create an entity. You can create different types of entities, so be sure to do your research to select the right one. Once an entity is created, the Secretary of State’s office will provide you with a copy of your entity’s Articles of Organization. This is the first document you will need. The second document will be a copy of a letter from the government giving your entity a unique EIN number.
These last two items – proposed facility location and entity documentation – will be paramount to complete correctly, as either of these two items could lead to disqualification if not up to DCR standards. I highly recommend using a company well-versed in these documents, such as our firm, Stock Legal, LLC, to ensure that you are not missing anything important and are adequately protected. You should take care of these two items as soon as possible. You do not want to wait until the last minute to find a location; I assure you there are many others just like you out there trying to lock down areas too. Also, when creating an entity, I would advise staying away from words such as “cannabis,” “weed,” “marijuana,” etc., as banks may be hesitant to receive money from such a company, and the same could be said for your future employees’ paychecks.
Remember to gather the required information for anyone in your company claiming majority ownership to show they meet the qualification requirements for application. You need only meet one of the requirements and provide documentation in support, but you will not be penalized for qualifying under more than one requirement, nor will you be awarded bonus points.
After you have determined your location and entity, the next step will be to gather all information needed from others in your organization that will be listed as owners. Often it will take individuals a couple of days to track down the necessary information, and you don’t want to wait for a company member to submit information at the last second. You will also need to create a visual representation indicating all the owners of your company and their associated ownership percentages. Don’t overthink this requirement. A simple table listing all owners and percentages will suffice if the portions add up to 100%.
I sincerely hope this blog post series has provided you with insight and ideas on how best to apply with the DCR for a micro business cannabis license. The information is daunting, and the risk of missing out can be consuming, but take your time with the process. Remember that you will have two other opportunities to apply for a micro license in 2024 and 2025. If you don’t have your ducks in a row, don’t apply. Wait for the next go around. There is no point in spending time and money on the application if you don’t meet the minimum requirements. If you have any questions, please don’t hesitate to reach out to me, Christopher Miller, or our firm, Stock Legal, LLC. I would be more than happy to help with any part of your application and would be glad to guide you through suitable approaches. If you remember only one thing, it’s this – plan and don’t rush. Double-check all your information and leave plenty of time for corrections. You’ve got this!
