Permitting and licensing at the local level can be an expensive and time-consuming project. While similar themes are seen jurisdiction to jurisdiction, local processes tend to have their own quirks. The goal of this section is to give an overview of the permitting and licensing process often seen at the local level to save time and money down the road.
Local jurisdictions designate certain “zones” where commercial cannabis activity is permitted. Moreover, certain zones may only allow certain license types. For example, manufacturing and cultivation licensees may only be allowed to open up in industrial areas. Prior to signing a lease or purchase contract, make sure a potential property is zoned properly for the intended license type.
Most local jurisdictions allow cannabis businesses to operate in commercial and industrial zones, but prohibit cannabis businesses in or near residential zones. State regulations prohibit a licensed premise from being within a 600-foot radius of “a school providing instruction in kindergarten or any grades 1 through 12, day care center, or youth center that is in existence at the time the license is issued.”6 However, exceptions can be made under certain circumstances. Check the local ordinance as it may have a more restrictive buffer in place.
Even if a potential property falls outside buffers, it may be a good idea to contact nearby schools, park adminstrators, and churches depending on the circumstances. The last thing you want is for one of these entities to oppose your project after you have already signed a lease or purchase contract.
Local regulations should specify which zones a cannabis business may open in, but they rarely identify where cannabis-friendly zones are located within a jurisdiction. To bridge this gap, go to your jurisdiction’s local website. Localities often publish maps showing cannabis-friendly zones on their website, and some even offer searchable databases that allow a cannabis applicant to type in a property address to confirm the zone it sits in.
Once it is confirmed that a property falls in a cannabis friendly zone, be sure to call or email the local jurisdiction to confirm your findings. Cannabis regulations change frequently, and information of local websites can be outdated.
Land Use Entitlements
After confirming that a property is in the proper zone, cannabis applicants should vet timelines, costs, and potential issues associated with obtaining any necessary land use entitlement before signing a lease or purchase contract. The most common type of land use entitlement encountered by cannabis entrepreneurs is a Conditional Use Permit or “CUP.” In the cannabis context, a CUP is an approval to conduct a specific type of commercial cannabis activity in a specific property by local government. A CUP application, therefore, is an evaluation of the suitability of the applicant’s property as it relates to the applicant’s intended cannabis use rather than evaluation of the applicant’s business plan.
Before committing to a property that will require the submission of a CUP application, applicants should look into whether there are properties available for rent or purchase that already hold a CUP for the intended cannabis use. Hiring a real estate agent and/or broker that has worked with previous cannabis clients can be invaluable.
Obtaining a CUP can take anywhere from 3 to 9 months, and can cost tens of thousands of dollars. It is non-transferable and stays with the property. The extent of necessary interior and exterior modifications to a property directly impacts both the completion timeline and estimated cost to complete. CUP applications require the submission of site, floor, electrical, plumbing, etc. drawings which often necessitates hiring an architect and/or engineer. Before spending money on drawings, be sure to ask the landlord or seller if they have any drawings from past projects as this can save time and money.
Local Cannabis License or Permit
Whereas land use entitlement applications verify that a property is suitable for commercial cannabis activity, local cannabis license (“cannabis permit” is used interchangeably) application evaluates a business. Each local jurisdiction will have its own quirks and unique requirements, but local applications often mirror the State application process. However, you will find that local applications for focus more heavily on the impact a business will have on the community by requiring neighborhood responsibility plans, community benefit plans, odor plans, etc. that may not be required by the State.