FREQUENTLY ASKED QUESTIONS

Answers to Cannabis Business FAQs

How can I get a license?

This is a very common yet very loaded question, one which has a number of variables to its answer. The first variable is to confirm in which state you would like to operate. Then it is a matter of determining the types of cannabis licenses available in that state; the amount of licenses available; the application process for the license; and any application fees. Nemphos Braue can lead you through the complex regulatory framework in each cannabis state to explain the process to follow, and more importantly, how to organize and structure your business based on the license category you wish to pursue.

How much does it cost to get a license / create a cannabis business?
The second most common, and very loaded question. The cannabis industry covers a variety of operations including cultivation, processing/manufacturing, dispensing/retail, delivery/distribution, etc. The most influential controlling factors include: the license you choose to pursue; the business model you wish to follow; initial funding immediately available; additional funding options; and real estate options. For example, it takes tens of millions of dollars to develop a vertically integrated (from seed to retail sale) cannabis organization. But I have seen clients create a simple cannabis retail shop for less than $250,000.00. Whether you are looking to acquire a cannabis business through purchase or develop one from the ground up, Nemphos Braue can provide the proper guidance in the creation and development of your cannabis venture. Our strong relationship with private equity, venture capital, and small banks lending in the cannabis space, may provide the additional funding you need.
How can I fund my cannabis business?
First, you should have personal funds readily available to begin your venture into the cannabis industry. There is no hard figure to point to, however, there are initial costs that must be accounted for even prior to speaking with potential equity and debt financiers. Personal funds are your skin-in-the-game and they show a financier that you are dedicated to the development and success of your business. It binds the financial partnership. There are a few, small credit unions and state charter banks who are lending in the cannabis space. Otherwise, until federal law loosens the potential risk to the banking industry for cannabis investments, your primary source of funds would be from private individuals and groups – private equity, venture capitalists, family offices, etc. Nemphos Braue’s strong relationship with private equity, venture capital, and small banks lending in the cannabis space, may provide you with the connection you need to necessary funds.
How can I get into the cannabis industry without acquiring a license to grow/sell?

There are many successful and lucrative service providers in the cannabis industry, many of which are Nemphos Braue clients. From software developers, general construction contractors, consultants, marketing organizations, compliance auditing and oversight organizations, etc. there are many solutions and services that could be provided to the industry that are not regulated or applicable to state cannabis laws. (A quick note, delivery services are viewed differently state-by-state; i.e. some require licensing, some do not). Whatever your niche, set up a call with Nemphos Braue cannabis attorneys to discuss the opportunity of providing a service to cannabis licensees in your state.

What’s the difference between industrial hemp and marijuana?
In actuality, very little. However, by definition industrial hemp is a variety of the cannabis sativa L. plant that contains no more than 0.3% concentration (on a dry weight basis) of the psychoactive compound tetrahydrocannabinol (THC). And to look at each growing plant it is impossible for the untrained individual to distinguish between the two. However, in the cannabis industry we tend to split the terms to clarify exactly what we are speaking about – hemp/industrial hemp vs. marijuana/cannabis – because each follows their own purpose, processes, procedures, and approach. Most importantly, the Agricultural Improvement Act of 2018 (commonly known as the 2018 Farm Bill) legalized hemp production at the federal level, and ultimately amended the Controlled Substances Act to reflect the same. Traditionally, industrial hemp has been used for manufacturing purposes rather than any psychoactive. The recent explosion of research and therapeutic results of various cannabinoids, like CBD, CBDA, CBG, CBN, CBC, etc. have created a concentration on the business of industrial hemp. However, like all other industries in their beginning stages, this concentration has caused a bottle neck in the flow of commerce. The big pivot we are seeing in the industrial hemp industry is the return to its traditional manufacturing purposes: textiles, bio-plastics, animal feed, hemp-crete and other building materials, etc. The applications of industrial hemp are vast. Come in to Nemphos Braue to discuss your desire and plan to build a business in the world of industrial hemp.

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