What Are the Cannabis Licensing Requirements in Rhode Island? (May 2024)

Rhode Island has legalized both medical and adult-use marijuana. The state initially sanctioned medical marijuana in 2006 with the enactment of the Edward O. Hawkins and Thomas C. Slater Medical Marijuana Act, now codified at 21 R.I. Gen. Laws Ann. § 21-28.6. This legislation allows individuals with “debilitating medical conditions,” such as cancer, glaucoma, post-traumatic stress disorder, and conditions approved by the Department of Health, to use marijuana. Compassion centers, not-for-profit corporations, are licensed to acquire, possess, cultivate, manufacture, deliver, transfer, transport, supply, or dispense marijuana to patient cardholders, their registered caregivers, or authorized purchasers. Initially limited to three, the state has expanded to include an additional six newly-licensed compassion centers. As of August 2022, these existing centers are authorized to cultivate and manufacture recreational cannabis for adult consumers.

In May 2022, Governor Daniel McKee signed the Rhode Island Cannabis Act, legalizing the personal use and licensed retail sale of cannabis to Rhode Island adults. The legislation, effective immediately upon signing, permits individuals aged 21 and older to possess up to one ounce of cannabis publicly or up to 10 ounces at home. Additionally, individuals can purchase or transfer up to one ounce of cannabis, cultivate up to six plants (three mature) at home, and possess up to five grams of cannabis concentrate. The act facilitates an automatic review and expungement of past misdemeanor or felony convictions for cannabis possession by July 1, 2024.

The Rhode Island Cannabis Act establishes the Cannabis Control Commission, an independent body authorized to issue licenses and establish industry regulations for both adult-use and medical cannabis. The Commission is tasked with issuing up to 24 retail licenses, and revenue from application and licensing fees will contribute to a social equity fund benefiting communities adversely affected by the historical criminalization of cannabis.

Types of Rhode Island Cannabis Licenses

Before the legalization of adult-use cannabis in May 2022, Rhode Island exclusively permitted limited medical-use cannabis through designated “compassion centers” situated throughout the state. Licenses were issued for both these centers and the cultivators supplying them, with the first center opening its doors in 2013.

With the introduction of the Rhode Island Cannabis Act, the state now offers five types of adult-use cannabis business licenses:

• Cultivator
• Product Manufacturer (or Processor)
• Hybrid Retailer (Medical and Adult-use Cannabis)
• Retailer
• Testing Laboratory

Each license type authorizes specific operations within the cannabis industry. To determine the most suitable license for your business goals, consult with one of our cannabis business attorneys.

Eligibility Criteria for a Cannabis License in Rhode Island

To qualify for a cannabis business license in Rhode Island, you must meet the following basic eligibility criteria:

• Applicants must be at least 21 years old.
• Applicants must have no disqualifying convictions.
• Applicants must fulfill all tax obligations.

Additional License Requirements and Selection Criteria

Apart from the fundamental eligibility criteria, you need to submit various documents demonstrating your commitment to running a lawful and secure business beneficial to Rhode Island. While the specific application instructions are pending, the Rhode Island Cannabis Act mandates that applicants provide, at a minimum:

• An operating/business plan
• An inventory tracking plan
• A financial plan
• A security and safety plan
• Proof of compliance with state and local regulations
• Local municipal approval

The exact documents required can be discussed with our Rhode Island cannabis license attorneys.

Financial Requirements for a Rhode Island Cannabis License

Rhode Island does not set a minimum capital requirement for cannabis license applications. However, applicants must demonstrate substantial financial resources to operate the business for the initial two or three years. Proof of liquidity, cash on hand, CPA and/or bank letters are expected, considering the high operational costs associated with cannabis businesses.

Real Estate and Zoning in Rhode Island

Rhode Island mandates that cannabis businesses be situated at least 1,000 feet away from schools. Local municipalities may implement additional zoning restrictions, which your cannabis attorney can advise you on based on the location of your business.

During the cannabis license application process, you must already possess real estate, and Rhode Island has defined six distinct regions for cannabis retail licenses:

• Zone 1: Burrillville, Cumberland, Glocester, North Smithfield, Smithfield, and Woonsocket.
• Zone 2: Johnston, Lincoln, North Providence, Central Falls, and Providence.
• Zone 3: Coventry, Foster, Scituate, West Greenwich, and West Warwick.
• Zone 4: East Greenwich, North Kingstown, Cranston, and Warwick.
• Zone 5: Charlestown, Exeter, Hopkinton, Narragansett, Richmond, South Kingstown, and Westerly.
• Zone 6: Barrington, Bristol, Jamestown, Little Compton, Middletown, New Shoreham, Portsmouth, Tiverton, Warren, East Providence, Newport, and Pawtucket.

Businesses must apply for a license in the corresponding geographical zone where they plan to operate.

Conclusion

Rhode Island's evolving cannabis landscape reflects a significant shift with the legalization of both medical and adult-use marijuana. The establishment of compassion centers marked the state's initial foray into medical cannabis in 2006, paving the way for subsequent developments. The Rhode Island Cannabis Act, enacted in May 2022, introduced a comprehensive framework for adult-use cannabis business licenses, including cultivators, product manufacturers, hybrid retailers, traditional retailers, and testing laboratories. Prospective licensees must meet stringent eligibility criteria and submit detailed plans covering operations, inventory tracking, finances, security, and compliance. The Act also addresses the financial requirements for applicants, emphasizing the need for substantial resources to navigate the cannabis industry's operational costs. Real estate and zoning considerations, defined across six distinct regions, further underscore the strategic planning required for successful cannabis ventures. The creation of the Cannabis Control Commission, tasked with issuing licenses and promoting social equity through a dedicated fund, signifies Rhode Island's commitment to a well-regulated and inclusive cannabis industry.