Although the prospect of an expanded recreational market has been on the horizon since 2022 when Rhode Island legalized recreational cannabis, Ocean State residents continue to endure limited access to such products, which can be sold legally only at one of the handful of legacy medical cannabis dispensaries in the state. That is all poised to change as new regulations promulgated by the state’s Cannabis Control Commission (which has taken the place of the Department of Business Regulation as the state’s primary cannabis regulator) took effect yesterday, May 1, 2025, setting the stage for a long-awaited dispensary license application round. The Cannabis Control Commission has not announced a timeline for the application round (it is expected to launch sometime this spring or summer) or published the application materials. However, the Commission’s regulations provide a great deal of information regarding the application materials that will be required and the Commission’s process for vetting and selecting winners. Key details are as follows:
General Application Details
- During the initial application round, 24 recreational dispensary licenses will be issued – divided equally among six geographic zones. Six will be reserved for qualified social equity applicants and six will be reserved for worker-owned cooperatives.
- A qualified social equity applicant is an individual/entity that has submitted a social equity status certification application to the Commission and, following review and certification of said application, has been approved as a social equity applicant.
- The Commission will issue a total of four dispensary licenses per zone (2 open, 1 social equity, 1 worker-owned cooperative).
- During any subsequent open application period the Commission may limit the number of available retail cannabis establishment licenses per zone.
Fees
- For the 12 “open” licenses (i.e., those not reserved for social equity applicants or worker-owned cooperatives) and the 6 licenses reserved for worker-owned cooperatives, the license application fee will be $7,500 and the annual license fee will be $30,000.
- For social equity licenses, there will be no application fee for this license round and annual fees will be $0 for the first year increasing ratably to $30,000 in year 5 (and each year thereafter).
Site Control and Zoning Compliance
- Applicants are required to provide evidence of site control for the proposed location of the dispensary in the form of documents evidencing either ownership of the property or lease agreement with the owner of the property.
- Applicants must also provide evidence of full compliance of the facility with the local zoning laws in the form of a certificate or letter from an authorized zoning official of the municipality confirming zoning compliance and receipt of all required final zoning approvals and certification by an authorized officer of the applicant as to compliance with any other applicable local ordinances.
- Proposed locations may not be within 500 feet of an existing public or private school.
- A draft floor plan of the establishment must also be submitted.
Ownership and Control Disclosures
- Applicants must provide a disclosure and certification for all owners, key persons/interest holders, which terms are defined in the regulations to include:
- All persons and entities with ownership interests;
- All officers, directors, members, managers and agents;
- All persons or entities with managing or operational control;
- All investors or other persons or entities with any financial interest; and
- All creditors that will loan money to, finance and/or hold a security interest in the cannabis establishment and/or other assets to be used in the cannabis establishment operations, if any.
- Applicants must also provide an organizational chart and “schedule of compensation/remuneration.”
Required Plans/Operational Narratives
- Applicants must draft and submit a host of business and operational narratives, including, but not limited to the following documents:
- A business plan that demonstrates experience running a business, including the applicant’s experience running a cannabis business, and identifies all sources of funding for the proposed business.
- A security and safety plan including the description of security equipment and standard operating procedures for the cannabis establishment.
- An operations manual including policies, procedures and documentation of the following:
- Record keeping and records retention plan;
- Qualifications for sale, including ID verification procedures;
- Staffing plan, including education and training of employees and volunteers;
- Inventory tracking plan;
- Data security plan;
- Alcohol and drug free workplace plan;
- Labeling and packaging plan;
- Marketing and advertising plan;
- Product storage plan;
- Voluntary and mandatory recalls of cannabis and cannabis products plan;
- Plan to ensure any outdated, damaged, deteriorated, mislabeled, or contaminated cannabis is quarantined from other cannabis and destroyed;
- Odor control plan;
- Community safety plan; and
- Emergency management plan.
Limitations on Number of Applications Per Geographic Zone
- An applicant who applies for any retail cannabis license may only submit one application per geographic zone.
- A person or entity cannot be an interest holder with respect to more than one applicant or application per zone irrespective of license type.
- An applicant may apply for a license in more than one zone provided, however, that if the applicant is selected for a license in more than one zone, the applicant must select a single zone in which the applicant will proceed with licensing.
Qualified Lottery
- The Commission will issue licenses via a qualified lottery, which will involve merit-based initial screening. All applicants that meet threshold criteria during the initial screening will be entered into a lottery.
- A random drawing to select the licensees in each zone will be held in a manner that can be observed by the public.
- The Cannabis Control Commission has not yet identified potential dates for the random drawing.
Restrictions on Transfers of Licenses/Changes to Ownership and Location
- Qualified applications, provisional licenses and licenses may not be assigned, sold or otherwise transferred to other persons or locations without prior approval of the Commission.
- All applicants, provisional licensees and licensees must seek pre-approval from the Commission by means of requesting a variance for all material changes to the submitted and/or approved application or any materials, operations or plans approved thereafter by the Commission. The types of changes that must be pre-approved include:
- Proposed change in ownership of the proposed or licensed cannabis establishment, provided however that no variance which affects a majority change in ownership, control, financial interest and/or compensation/remuneration of a cannabis establishment will be approved in the first year of licensed activities, except upon the Commission’s determination that public health, safety, welfare or other grounds requires such variance;
- Proposed change in the membership of a board of directors or board of trustees;
- Proposed change in corporate officer;
- Proposed merger, dissolution, entity conversion or amendment of corporate organization;
- Proposed entering into a management agreement, changing management companies, and/or material changes to an existing management agreement;
- Proposed changes to the approved premises or location (but a selected applicant may not relocate or change the proposed location outside of the zone for which they were selected); and
- Proposed changes in the interest holder/key person disclosure.
- The Commission may deny a variance request if it determines that such variance will cause harm to public health and safety or cause the applicant, provisional licensee or licensee to be in violation of the Medical Marijuana Act, the Cannabis Act or any regulations promulgated thereunder, or otherwise would have caused the applicant, provisional licensee or licensee to not have qualified for licensure originally.
Although geographically limited, Rhode Island is a densely-populated state that sits in the heart of the Northeast US. Given the extremely limited number of licenses that will be made available as part of this initial recreational dispensary round, we expect there to be significant interest and a correspondingly high volume of applications submitted. It would be wise for interested parties to begin preparing the required background materials and technical documents well in advance of the opening of the application window. Our nationally-renowned cannabis license application team is up to speed on the newly-effective regulations and is ready to mobilize into this market.
