Missouri Cannabis Entrepreneurs: 5 Steps to Take Ahead of November's Elections

Missourians will vote this November on three separate proposals for legalizing medical marijuana. Two proposals (Amendment 2 and Amendment 3) will amend the state’s constitution, while Proposal C will require lawmakers to enact a new law. Voter’s can ensure that the legalization of medical marijuana is implemented exactly how they want by choosing the constitutional amendment, whereas, lawmakers could change the new law that would be created by Proposal C. Recent polls indicate that voters are supportive of Amendment 2, which we will review below.

Entrepreneurs who want to start a cannabis business should start preparing now in order to ensure a place in the front of the line when the mad rush occurs following legalization. Amendment 2 requires the Department of Health to make the applications available for marijuana establishments in 6 months of the December 6th effective date, begin accepting applications within 8 months, and approve or deny the applications within 5 months after submission. The number of licenses will most likely be limited. Missouri may cap the number of dispensary licenses to 24 dispensary licenses in each Congressional Voting District.

Below are 5 steps that you should take to ensure that you receive a license. Application packages should be organized, professional and easy for the regulator to find what they need.

  • Understand Missouri’s scoring methodology. This information is located in Section 1 Right to Access Medical Marijuana 3 Creating Patient Access to Medical Marijuana 1(h). The Department of Health is instructed to use the following methodology when there are competing applications. Below are some high level activities that can help prepare you.

    • Ensure that all owners, officers, managers have the character, veracity, background, qualification and experience to fund the business. Regulators will perform background checks and reject applications in which individuals lied.

    • Create a business plan. The regulators will review the business plan to ensure that adequate supplies of marijuana will be provided, including to low income patients, and that adequate safety and security plans are in place to prevent diversion. The business plan should show that there are adequate funds to cover the first year operating expenses.

    • Create a security plan. The regulators will want a site plan that shows intended security including video cameras, areas of coverage, automatic and immediate alarms, limited access areas, lighting coverage on the exterior and interior - focus on areas where marijuana is transported, processed and stored.

    • Create bios or resumes for owners and managers showing relevant experience and experience in the legal marijuana market

    • Create a community outreach plan. Create a plan to show how you will inform the community about your business, and give back to the community through involvement, employment opportunities or other positive impact activities.

  • Identify Suitable Real Estate. Identify real estate in a municipality that is likely to allow the medical marijuana businesses. This is generally take more time than expected in that you will need to consider minimum requirements related to the premises site including:

    • Look for properties at least 500 feet from schools but be conservative and look for properties that are 1000 feet away. There may be other minimum distance restrictions for other organizations such as churches or drug rehab facilities;

    • Avoid residential areas- residences are not generally allowed

    • Ensure that the local municipality plans to allow medical marijuana establishments

    • Understand the local zoning requirements and fire safety requirements

    • Obtain approval from landlord to operate a marijuana establishment

  • Develop a Scaled Site Plan: Create a site plan for your premises including all entrances, exits, windows and outline all areas including patient waiting areas, sales area, and storage. Identify areas that contain video cameras and other alarms.

  • Organize Your Financial Information: Organize you tax, banking and securities information for the past 3 years. Make the package easy for the regulators to review. The regulators will want to ensure that your money was made legally and all taxes have been paid.

  • Try to Establish a Banking Relationship. Banks are hesitant to provide services to marijuana businesses as they may be charged with money laundering; however, this is changing. Develop a relationship with a bank to understand what they will need to provide you with basic services. Understand that the bank will be required to file a suspicious activity repot (SAR) to the federal government when you inform them that the account will be used for a legal marijuana business. You should not try to falsify information as this will make matters worse, and possibly prevent you from obtaining a banking relationship anywhere.