Whether you’re new to the industry or a well-seasoned veteran, there’s no denying the complexity of the cannabis license landscape. That’s why we consider ourselves lucky to have recently met with licensed attorney Sumer Thomas on the Kaya Cast podcast.
Today, Sumer is the Director of Regulatory Operations for Canna Advisors, a business management consultancy team based out of Boulder, Colorado. Her legal background in business tax and administrative law, paired with her business development experience as a consultant for a local media company, bolsters her expertise in the evolution of cannabis regulation.
Sumer is a member of the National Organization for the Reform of Marijuana Laws (NORML), the State Regulations Committee of the NCIA, and the International Cannabis Bar Association (INCBA). She also volunteers for the Expunge Colorado, the National Association of Criminal Defense Lawyers (NACDL), and the Last Prisoner Project (LPP), which is solely dedicated to cannabis criminal justice reform.
Sumer is a wealth of wisdom eager to share with anyone currently in — or looking to enter — the cannabis industry. Here are our top 4 takeaways for success in the cannabis industry:
- Identify potential roadblocks
- Secure your supply chain
- Take advantage of the Employee Retention Credit
- Hire a cannabis advisor
Keep reading to discover why each factor plays a crucial role in navigating cannabis licensing.
1. Identify Potential Roadblocks
Much like you would with any effective business plan, it’s crucial to take the time to identify any potential roadblocks you may face. Specifically for the cannabis industry, the two primary concerns that may arise in the licensing process are:
- Section 280E of the Internal Revenue Code
- Limited access to financing
“Those are huge roadblocks, especially for dispensaries, because they can't really capitalize on the cost of goods sold and deductions there to offset their expenses.”
After all, the state-level legislation looks to see that you have a facility, your finances are in order, and your management team is in place. Beyond that, they will also look to see that your standard operating procedures (SOPs) are compliant with local and state laws.
2. Secure Your Supply Chain
As a business owner, even before you worry about your cannabis license, you must ensure financial stability. You need to prioritize your inventory management and procurement. Unfortunately, especially in the cannabis industry, this is an element that tends to slip through the cracks.
A lack of effective inventory management will ultimately impact your ability to run your business. To maintain and grow a strong customer flow, you need to provide consistent product availability.
“You have to always have what your customers want. Always have to have that. And that comes with keeping a tight handle on your procurement.”
What does this look like?
- Hiring a reliable procurement manager
- Developing close relationships with suppliers
- Fostering deep connections with buyers
3. Take Advantage of the Employee Retention Credit
The Employee Retention Credit (ERC), under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, enables eligible businesses to receive a refundable tax credit. While many initially believed the credit to be too good to be true, the ERC has proven trustworthy for dispensaries and plant-touching cannabis businesses.
“Some of the Management Services Organizations (MSOs) have filed for it, and they're getting back checks in the millions of dollars. So, essentially cannabis businesses, there's a pile of money with your name on it, just sitting there. And, all you have to do is get your accountant to fill out some forms, and you can get access to that.”
Anywhere a cannabis business can get a little more cash flow is welcomed in these times, so the ERC is worth taking a closer look at. Keep in mind, though; it can take months to get paid out. Still, it’s there for the taking if your business is eligible.
4. Hire a Cannabis Advisor
Running a business is challenging enough, but when you add the complexities of acquiring a cannabis license, it instantly becomes a different ball game. Then, when you’re a company that crosses state lines, those challenges come tenfold.
From state to state across the United States, everything is different in the cannabis industry, including:
- Legislation
- Application
- Licensing
- Compliance
It comes without surprise that hiring a cannabis advisor can be a critical element in navigating the cannabis license landscape for your business. Thankfully, Sumer uses this to her advantage.
“That's kind of helped me to see past a little bit of what might happen in the future in the cannabis industry and how all of these different rules might work together as far as the licensing processes in each.”
Final Thoughts on Navigating the Cannabis License Landscape
Sumer continues to be wildly successful in the world of cannabis advising. She is eager to help anyone looking to do their best by providing her expert opinion through Canna Advisors.
If you’re looking to acquire a cannabis license but aren’t sure where to start, we recommend checking out the full podcast episode with Sumer!
