Marijuana Venture: Industry Pros Weigh In On Limiting Cannabis Operator Licensing

Michael Brosgart

Chief operations officer

ACTIVE™

Unlimited cannabis operator licensing promotes fair competition, reflecting the core values of our country’s free market system. Fair competition allows the best products, technology, and people to excel, driving innovation and delivering superior results. It benefits consumers by offering diverse choices and fostering continuous improvement. While regulations are necessary, overly limiting licenses hinders industry growth and innovation. By supporting a competitive landscape, we cultivate a vibrant cannabis industry that rewards excellence and inclusion. 

Rachel Gillette

Attorney

Holland & Hart

We’ve seen what happens when states pursue limited or “competitive” licensing: states get sued, small businesses cannot compete, license issuance delays, and social equity initiatives are slow or fail. While states should determine qualified license owners, taxation, and regulate public safety, they shouldn’t determine number of licenses issued, which applications are chosen, or decide license locations. Rather, local jurisdictions should determine what’s best for their community. Not to suggest localities should be able to prohibit altogether cannabis licensing — localities should have the authority to determine zoning, number and type of licenses issued, hours of operation, taxation, and the like. 

Allen Trask

Attorney

Ward & Smith

A good, functional licensing model does, in theory, provide the stabilization, predictability and protection that business owners and consumers crave and deserve. That can result in a more open market with competition on a more level playing field. Healthier competition should lead to more consumer choice, more supply and diversity of products, better safety standards, and the like. Those are all good things. Licensing does, however, create barriers to entry that may ultimately keep some interested parties from being able to participate and succeed, and there is a very real risk that small or local businesses can be disproportionately affected. 

Kim Stuck

CEO

Allay Consulting

Each state has differing opinions on best practices in cannabis licensing. Many trust in the free market deciding on winners and losers, while other states believe that limiting licensing will be more beneficial to the economy, a sentiment that I share as regulations become increasingly difficult with more licenses. For example, when Oklahoma opened 14,000 new businesses overnight, regulating departments had zero bandwidth to effectively regulate. Additionally, too many licenses result in low prices that most companies cannot compete with, negatively impacting the local economy, whereas limited licensing helps regulators perform and improves the overall economy of the industry. 

Jackie Cahan

Chief financial officer

240 Logistics

The answer presents a conflicting viewpoint for me. On one hand, adopting an unlimited licensing approach has resulted in market conflicts, with a few bad eggs exploiting the system by shutting down one license only to open another right next door. This practice puts immense pressure on the entire cannabis industry. However, on the other hand, limiting licensing contradicts the entrepreneurial spirit of America, where people come to pursue their dreams and goals as entrepreneurs, having the freedom to enter any industry or market.

The core issue lies not in the restriction of licenses but rather in the lack of access to banking services and critical capital for cannabis businesses to function on par with other industries in America. The absence of proper financial support hampers their growth and operations.

Striking the right balance between licensing and access to financial resources is crucial for the sustainable growth of the cannabis industry while upholding the entrepreneurial spirit that defines America.