Dispensary Facility Questions & Answers for Applicants
FAQs for the previous 2013 RFA
Q. I have a question about the types of products that a dispensary facility may sell. In particular, I wanted to confirm that a dispensary facility may sell items other than marijuana products or paraphernalia so long as such items are not sold from the dispensary department. Is my understanding correct?
A. Yes, subject to limitations as outlined in the regulations.
Q. Will DCP disqualify an application if one of the backers is discovered to have a misdemeanor conviction or a DUI conviction in CT?
A. DCP will apply the standards set forth in Section 46a-80(c), Conn. General Statutes. Criminal convictions may weigh negatively in determining the character and fitness of an applicant and/or a backer which, in turn, may affect the application.
Q. Can any part of the dispensary application be submitted online?
A. No. After the application has been completed, it will need to be printed and the required number of copies will need to accompany the RFA submission.
Q. Does the requirement for a “back-up alarm system” as set forth in Sec. 21a-408-62(c) require the installation of redundant security equipment throughout the facility or can it be satisfied by simply hiring a second security company to monitor the installed security system?
A. The back-up alarm system does not need to be fully redundant. It must, however, be able to “detect unauthorized entry during times when no employees are present at the facility”.
Q. Will the State allow an application to have two locations identified, allowing the State to select a more desirable location? BOTH proposed locations will be identical with regards to capacity, design and security as well as meeting all other requirements spelled out in the RFA.
A. Yes, but only one location would be selected and a single license would be issued.
Q. For this application purpose, what is the distinguishing definition of the following terms: "certified financial statements" and "audited financial statements"?
A. The terms are synonymous.
Q. Regarding the Bonus points section in the Dispensary RFA, specifically the third bullet point of item2, how do we know who the producer applicants are?
A. This item is only relevant for applicants who are coordinating a compassionate need plan with a producer applicant.
Q. The application materials are going to be voluminous, but the regulations require that they be securely bound. Do you have suggestions for how such large documents could be bound, or would submission in a three-ring binder be acceptable?
A . Any secure binding intended for use with a voluminous quantity of documents is acceptable, including 3-ring binders. If multiple binders are provided, they should be clearly labeled (e.g. binder 1 of 3).
Q. Are the regulations defined in Section 21a-408-62 the only requirements for Security Alarm systems that must be used?
A . All security requirements outlined in the regulations need to be met.
Q. Once an application is submitted to the State, including all required copies, will the information be made public? Will the application results be made public? Will copies of the application be returned to the applicant? If so, what will the procedure be for this?
A. Once a decision is reached, the Department intends to publicly announce the names of applicants that will be awarded producer and dispensary facility licenses. Additionally, the Department will disclose all or parts of applications to the extent required by the Freedom of Information Act. Please refer to the specific RFA section under the heading, “Freedom of Information Act” regarding claims of exemption from disclosure under the Act. Any documents submitted to the state as part of the application will not be returned to the applicant.
Q. Dispensary facility applicants are required to provide information regarding all state licenses, permits or registrations ever held, current or expired. Does this include all personal licenses such as a driver’s license and car registration?
A. This section is referring to professional, occupational and business licenses held by the applicant(s).
Q. In the dispensary facility RFA, applicants are asked to provide complete copies of all federal, state and foreign (with translation) tax returns. If the new corporate entity hasn't been formed yet, but will be before the submission deadline, do you want the personal tax returns for the owner of the corporation?
A. Please review the RFA, which sets out which tax returns must be submitted. Section E.7 on page 8 of the RFA instructs that the applicant submit any tax return that it filed in the past three years. Newly formed entities may have none. Section E.8 on page 8 of the RFA requires the submission of tax returns by each dispensary facility backer and each member of a backer. All applicants must exist at the time of application. Natural persons may apply for a dispensary facility license in their own name.
Q. Dispensary facility applicants are required to provide certified financial statements for the period of time the applicant has been in existence and any pro forma financials used for business planning purposes. If the new corporation hasn't been officially formed yet, are you looking for pro forma financials?
A. If pro forma financials used for business planning purposes exist, they should be provided.
Q. Dispensary facility applicants are required to provide financial statements and details of all business transactions connected with your application. Are you looking only for financial information regarding expenses incurred in filing the application?
A. No, we are interested in elements and details of all business transactions related to the application (e.g. consulting fees, inventory purchases, etc.).
Q. In the dispensary facility RFA, applicants are required to provide a detailed description of the features, if any, that will provide accessibility to qualifying patients and primary caregivers beyond what is required by the Americans with Disabilities Act. Is this referring to physical improvements or services?
A. This refers to any physical improvements or services above and beyond what is required by the Americans with Disabilities Act.
Q. Can social security numbers on tax returns be redacted when filing the returns with applications?
A. Yes, social security numbers on tax returns may be redacted.
Q. Can a pharmacist apply or appear as a dispensary facility manager on two separate applications?
A. Yes. A pharmacist can be designated as a dispensary facility manager on multiple dispensary facility applications. However, since the dispensary facility manager can only serve this function at a single licensed dispensary facility, applications where the same individual is named as dispensary facility manager must also identify an alternate dispensary facility manager in the event that licenses are awarded to each applicant.
Q. Is there any need for certified financial documents for someone forming a company that will not exist unless a dispensary facility license is granted?
A. All applicants must exist at the time of application. Natural persons may apply for a dispensary facility license in their own name but any such license would not be transferrable to an after-formed entity except in compliance with Section 21a-408-26 of the regulations.
Q. Has an insurance reimbursement protocol been established for the Medical Marijuana Program?
Q. Will it be up to the dispensaries to ensure that each patient can only get the maximum allowed product per month (2.5 ounces) or will the State control this via some secondary system or via 'prescriptions' from the primary doctor?
A. Patients will select a single dispensary facility from which they will obtain their medication. The dispensary facility will ensure each patient is dispensed medication in compliance with the physician’s written certification for the patient. The Prescription Monitoring Program database will assist dispensaries in this function by maintaining medical marijuana dispensing records.
Q. What is the Department’s preferred method of payment for submitting a dispensary facility application fee? Also, is the $5,000 licensing fee due at the time of a dispensary facility application submission?
A. The dispensary facility application fee is $1,000; it is due at the time of application submission and needs to be submitted in the form of a business check, bank check or money order made payable to the “Treasurer, State of Connecticut”.
The dispensary facility licensing fee of $5,000 is due only after an applicant has been chosen to receive a dispensary facility license.
Q. Are there any restrictions to out-of-state individuals or corporations from applying? If not, is there going to be any consideration/preference to local CT businesses/owners?
A. There are no restrictions on out-of-state applicants so long as such applicants are authorized to do business in the State of Connecticut. All applicants, however, must have a local presence because the production or dispensary facility must be located in Connecticut. All evaluation criteria are set out in the RFA. Points will only be awarded based on how well an application meets either the mandatory or the bonus point elements of the RFA. An applicant may present whatever material it believes meets the RFA criteria.
Q. Are there any rules or regulations in regards to special consideration from the state to minority applicants/businesses?
A. All evaluation criteria are set out in the RFA. Points will only be awarded based on how well an application meets either the mandatory or the bonus point elements of the RFA. An applicant may present whatever material it believes meets the RFA criteria.
Q. Sec. 21a-408-42 of the regulations states that dispensary technicians may perform "routine marijuana dispensing functions." Do these functions include physically handing medical marijuana over the counter to the patient and collecting payment?
A. Yes. The dispensary technician can perform sales transactions under the direct supervision of a licensed dispensary.
Q. Does the dispensary facility manager need to be on premises during all hours of operation at the dispensary department?
A. No. A licensed dispensary must be on the premises to supervise the activity within the dispensary department, but he or she does not have to be the dispensary facility manager.
Q. Should the responses to the questions is each of the Dispensary License Applications be double spaced?
A. This is left to the discretion of the applicant.
Q. Has DCP considered extending the dispensary facility application deadline? Extending the deadlines for potential applicants would allow applicants a better opportunity to successfully navigate the zoning process in many towns. .
A. There is no plan for changing the current Dispensary Facility Application submission deadline. Applicant are required to submit documents sufficient to establish that the applicant is authorized to conduct business in Connecticut and that state and local building, fire and zoning requirements and local ordinances are met for the proposed location of the dispensary facility.
As previously stated, an applicant may submit an application, pending zoning approval, on or before the November 15 th submission deadline. If zoning approval is received after the submission deadline, that information should be immediately provided to the Commissioner in accordance with the Terms and Conditions of the RFA. Such subsequent information will be considered, or not considered, as part of the evaluation process the same as all other information that is submitted subsequent to the submission deadline in accordance with the Terms and Conditions. The Commissioner reserves the right to, but is not obligated to, postpone awarding one or more dispensary licenses pending the outcome of zoning applications.
Q. Is there a separate website for dispensaries to use for purposes of reporting medical marijuana dispensing information into the PMP?
A. No. A dispensary, under a separate account, will utilize the same PMP website and protocol as pharmacies for reporting medical marijuana dispensing information.
Q. Does the "site plan drawn to scale of the proposed dispensary facility showing streets, property lines, buildings, parking areas, and outdoor areas , if applicable, that are within the same block as the dispensary facility" have to be drawn by a surveyor, or will maps from the town zoning and planning department suffice?
A. Any map drawn to scale including maps from the town zoning and planning department are sufficient, so long as they display the items listed in the RFA request such as streets, property lines, etc.
Q. Would you consider a block to be the area within 1000 feet of the dispensary?
A. A block would normally refer to an area bounded by four streets. If the proposed dispensary facility is located in an area where a traditional definition of “block” is not viable, the Department will accept a site plan reflecting an area within a 1000 square foot radius, along with an explanation of why a representation of the “block” was not possible.
Q. Does the dispensary facility need to have two security companies?
Q. Section D, Proposed Marketing Plan states: Provide a copy of proposed marketing plan and include any web templates and educational materials such as brochures, posters or promotional items. A) Who is the producer marketing their product to? B) Will the marketing be towards the dispensaries and doctors?
A. The Department is interested in any marketing plans, regardless of the targeted audience.
Q. Does the Department have a preference for submitting voluminous copies of tax returns for Dispensary Facility backers?
A. At least one paper copy of all backer tax returns needs to accompany the original submission. Additionally, the applicant must submit copies of such tax returns electronically on a CD in a searchable PDF format.
Q. How many patients have been certified to use medical marijuana?
A. General patient information is now posted on the Medical Marijuana Statistics webpage.
Q. Section C, Number 1 of the RFA asks for a “detailed description of all products intended to be offered by the dispensary facility.” What type of products is this asking about?
A. This item is seeking information about the non-marijuana products, if any, that the dispensary facility intends to offer.
Q. What is the current number of submitted applications for dispensary facilities?
A. The Department will post the number of applications received after the submission deadline.
Q. If a dispensary facility was formed in July with no transactions, other than attorney and printing, are certified financial statements required?
Q. What areas are currently designated/zoned for producer/dispensary facility within the
state of CT?
A. Each town sets its own zoning requirements and the department is not provided with such information.
Q. If a producer/dispensary facility license is granted, what is the duration of time that the license is valid and what is the renewal fee?
A. Each license must be renewed annually. The fees for all license applications and renewals are set forth in section 21a-408-28 of the regulations.
Q. The Regulations state that there must be a licensed dispensary on the premises at all times the dispensary department is open or in operation. Does this mean the pharmacist, who is serving as the licensed dispensary for the facility, must be an owner or officer of the company?
Q. Must we own property at the time of application submission in order to be considered for a producer/dispensary facility license or can we be in the process of acquiring property to build the facility?
A. It is not necessary to own the property at the time of applying for a producer license or dispensary facility license. You must, however, provide documents evidencing a right to occupy the proposed location in the event a license is awarded. If your acquisition or lease agreement, for example, is subject to certain conditions before the transaction will be complete, you should provide documentation sufficient to demonstrate that, upon receiving a license, all conditions precedent to the closing will be satisfied.
Q. Are tax returns required for a financial backer who has less than 5% interest in a dispensary and no management control?
A. Tax returns are not required of a financial backer so long as “the interest held by such person and such person’s co-workers, employees, spouse, parent or child, in the aggregate, do not exceed five per cent of the total ownership or interest rights in such dispensary facility and such person does not participate directly or indirectly in the control, management or operation of the dispensary facility.” A financial backer who does not meet the above criteria would not be deemed a dispensary facility backer pursuant to the definition set forth in section 21a-408-1(24) of the regulations.
Q. Has there been any change in the Commissioner’s determination of the definition for a
A. The department has no immediate plans to increase or decrease the determination that 2.5 ounces is an appropriate one-month supply.
Q. If a producer operates an "in-house" lab on their premises, will the state have any quality assurance measures in place to assure labeling of the products are accurate and not "misbranded"?
A. Although a producer may have an in-house laboratory on its premises for its own internal testing, all labeling must be based on laboratory testing conducted by a laboratory that,
among other things, is: (i) located in Connecticut; (ii) licensed or registered by the department to provide analysis of controlled substances pursuant to section 21a-246 of the Connecticut General Statutes; and (iii) independent from all other persons involved in the marijuana industry in Connecticut. For a more detailed description of the laboratory requirements, please review sections 21a-408-57 and 58 of the regulations and the definition of laboratory set forth in section 21a-408-1.
Q. Regarding Sec. 21a-408-68, Marketing at a Dispensary, number 2 and 3: can we include a non-photographic image of a marijuana leaf in advertising or in our name of business logo? Also, what constitutes a marijuana product?
A. A dispensary facility may include a representation of a marijuana leaf as part of its advertising and business logo. Pursuant to section 21a-408-68(2) and (3) of the regulations, however, the dispensary facility may not display the marijuana leaf on the outside of the dispensary facility building or as part of an illuminated sign.
Pursuant to section 21a-408-1(42) of the regulations, “marijuana product” means any product containing marijuana, including raw materials. The marijuana plant, or any part thereof, would, therefore, be considered a marijuana product.
All advertising must also comply with the other sections of the regulations related to advertising, including section 21a-408-66, which prohibits, among other things, advertisements that are false or misleading, obscene, indecent or that encourage the recreational use of marijuana or marijuana use by persons under 18.
Q. Section 21a-408-51 states that a dispensary facility must “store all marijuana in an approved safe or approved vault and in such a manner as to prevent diversion, theft or loss.” Does the DCP currently have a list of approved safes and/or vaults that they can provide?
A. The requirements for an approved vault and approved safe are set forth in section 21a-262-1 of the Regulations of Connecticut State Agencies, which can be found on DCP’s website on the “Laws & Regulations” page under Drug and Pharmacy. The standards set forth in these regulations apply to all pharmacies in the State.
The Department does not maintain a list of all companies offering an approved safe or vault, but any safe or vault meeting the requirements in the pharmacy regulations is acceptable for a dispensary facility as well.
Q. It looks like the regulations do not prohibit a producer and dispensary facility from being affiliated. Won't a dispensary facility not affiliated with a producer be at a competitive disadvantage since the producer may provide preferential pricing to the affiliated dispensary facility?
A. The regulations do not prohibit a producer and dispensary facility from being affiliated. The regulations, however, do prohibit a producer from unfairly favoring one dispensary facility over another (see, for example, sections 21a-262-52(5) – (7) of the regulations). In addition, the antitrust laws are applicable to this industry and are available to the State or private parties.
Q. May a dispensary facility license and register two dispensary facility managers for a dispensary facility?
A. The dispensary facility is required to designate one dispensary who will serve as the dispensary facility manager. This person must be a licensed pharmacist and will have complete control and management of the dispensary facility. An applicant may register others to serve as dispensaries for the facility.
Q. What determines an applicant’s “good” character?
A. An applicant’s good character will primarily be assessed on the basis of the criminal background check of the applicant, and those associated with the applicant, such as its backers, officers, directors and high-level employees, in accordance with Section 46a-80(c) of the Connecticut General Statutes.
Q. What is the definition of child resistant packaging?
A. As set forth in section 21a-408-56 of the regulations, a package shall be deemed child-resistant if it satisfies the standard for “special packaging” as set forth in the Poison Prevention Packaging Act of 1970 Regulations, 16 CFR 1700.1(b)(4).
Q. Are dispensary facilities allowed to offer delivery services to their patients?
A. No. If a patient is unable to purchase marijuana from a dispensary facility, the patient should
discuss the matter with their physician who can consider whether a primary caregiver is appropriate for the patient.
Q. Does a dispensary facility manager have to be a pharmacist?
Q. Must a corporate applicant be incorporated for the sole purpose of Medical Marijuana or would it be acceptable for a previously existing company to adopt the dispensing of Medical Marijuana as its sole purpose?
A. The Department's regulations would not require the company to be re-incorporated for the sole purpose of participating in the Medical Marijuana Program. The Department, however, cannot provide advice on any other laws or regulations that may be implicated by the decision to change a company's corporate purpose.
Q. Please provide clarification on which financial statements, of a newly formed company,
must be certified?
A. There are two different financial statements that an applicant who has been in business for under a year is asked to provide:
· First, it should provide certified financial statements for the period of time it has been in existence.
· Second, it should provide any pro forma financials that were used for business planning purposes to the extent such pro forma financials exist. It is only the pro forma statements used for business planning purposes that do not need to be certified.
Q. Section E (#6) asks for audited financial statements. Our LLC was formed within this past year. Up to what date do the certified financial statements need to include? (Ex. September 30, 2013 or October 31, 2013?)
A. The certified financial statements should include information up to the last full month before the application was submitted.
Q. In a previous FAQ, it was stated that DCP would allow a dispensary facility (with no producer affiliation) to lease space for its operation in a building that is owned or leased by a producer as long as the security and other requirements of the regulations and the RFA are met with regard to each location. Would DCP allow a dispensary facility to lease space from a producer, which is a separate LLC and separate entity yet shares members in common, thus has some level of affiliation? The dispensary and production sites would be on the same property but separate structures with no shared entrance or exits.
A. The regulations do not prohibit overlapping ownership interests between a dispensary facility and producer. A dispensary facility with common ownership with a producer may lease space under the same conditions as a non-affiliated dispensary facility. Any financial arrangements between an affiliated producer and dispensary facility, however, cannot circumvent the requirements of the regulations, particularly Section 21a-408-52, that prohibit a producer from discriminating in their dealings with dispensary facilities.
Q. Can a dispensary facility remain open to offer products or services other than marijuana and paraphernalia without the presence of a dispensary?
A. Yes, so long as the dispensary facility has a separate area within the facility for the dispensary department, which, as set forth in Section 21-408-1 of the regulations, is the area where marijuana is stored, dispensed and sold. The facility, for example, could have a separate room in which counseling services are offered and which can be accessed in a way that does not undermine the requirement that the dispensary department itself be secured in accordance with the regulations, particularly Section 21a-408-36.
Q. Can an applicant submit more than one location for the proposed dispensary facility within the same application?
A. An applicant must submit a separate application, and application fee, for each location it wishes DCP to consider.
Q. What will happen if no dispensary receives local municipal approval?
A. The Department anticipates that some municipalities will permit a dispensary facility. In the event that no municipality approves a facility, the Department will evaluate the situation at that time and take the steps it believes are necessary and prudent to assure that sufficient dispensary facilities are ultimately approved to meet patient needs.
Q. The language in the regulations suggests that a facility need only produce proof that it qualifies for local zoning approval, not that it actually has that approval in hand. What is the actual requirement?
A. In accordance with Section B of the dispensary RFA, the applicant must provide "documents sufficient to establish that the applicant is authorized to conduct business in Connecticut and that state and local building, fire and zoning requirements and local ordinances are met for the proposed location of the dispensary facility." The exact form of the documentation is left to the discretion of the applicant and the local authority.
Q. Many towns and cities have not approved zoning or declared appropriate zoning areas for dispensaries. Most towns claim that they are in the process and public hearings need to take place. This will occur after the November 15, 2013 application deadline. Does DCP have a list of approved towns for dispensary services or will "pending" be acceptable without penalty?
A. The Department does not have a list of approved towns. An applicant may submit an application, pending zoning approval, on or before the November 15 th submission deadline. If zoning approval is received after the submission deadline, that information should be immediately provided to the Commissioner in accordance with the Terms and Conditions of the RFA. Such subsequent information will be considered, or not considered, as part of the evaluation process the same as all other information that is submitted subsequent to the submission deadline in accordance with the Terms and Conditions.
Q. What is the current number of submitted applications for dispensaries?
A. As of October 1, 2013, the Department has not received any applications.
Q. Will a dispensary for edibles follow the same procedure as a standard bakery operation in CT as long as it is associated with the issuance of a Medical Marijuana license? Are there any special licenses needed in order to be a Medical Marijuana Bakery that are different than a regular bakery in CT?
A. Only a production facility may produce marijuana products, including edible products. As set forth in section 21a-408-53 of the regulations, marijuana manufactured in an edible form shall comply with the Connecticut Food, Drug and Cosmetic Act, Connecticut General Statutes, sections 21a-91 to 21a-120, inclusive, and Connecticut General Statutes, sections 21a-151 to 21a-159, inclusive, regarding bakeries and food manufacturing establishments.
Q. For the application, will IRS tax transcripts suffice or are complete copies required?
A. Applicants are required to submit complete copies of their tax return.
Q. My company was formed just a few months back; are certified financial statements necessary? Is there a State form available to be filled out by my CPA for certification?
A. Section E, item 6 of the RFA states: “If the applicant was formed within the year preceding this application, provide certified financial statements for the period of time the applicant has been in existence and any pro forma financials used for business planning purposes.”
There is no State-devised form for this purpose.
Q. DCP estimates 190 patients in Hartford County will be eligible for medical marijuana. What is the anticipated number of patients in the second year of the program?
A. DCP does not provide estimates. The number of patients listed by county posted in an answer to a previous question represents the actual number of patients certified by their physicians as eligible to use medical marijuana as of September 16, 2013. Dispensary facilities are not limited to serving patients within the county in which the facility is located. The Department anticipates that the number of patients certified by physicians will rise as the production and distribution facilities are available. Beyond that, the Department has no estimates for future number of certified patients.
Q. How is the State going to protect legal dispensary facilities from federal prosecution?
A. DCP will enforce the medical marijuana regulations that are in place so as to assure that the rigorous requirements of the program are implemented, not just on paper, but in actual practice. Beyond that, DCP cannot influence federal prosecution decisions.
Q. Will the number of applicants be made public?
A. If requested, the Department will release the current number of submitted applications for each license type. All complete applications submitted prior to the submission deadline will be fully considered. Early applicants will not get different consideration in the selection process.
Q. Is there any provision in the state application evaluation process for participation by either private citizens or municipalities?
A. Application evaluations will be conducted by DCP staff only. Applicants, however, must provide documents sufficient to establish that state and local building, fire and zoning requirements and local ordinances are met for the proposed location of the dispensary facility.
Q. Would the Commission allow a dispensary facility (with no producer affiliation) to lease space for its operation in a building that is owned or leased by a producer?
A. The regulations do not prohibit a dispensary facility from operating in a building that is owned or leased by a production facility, or from being located adjacent to a producer, so long as the security and other requirements of the regulations and the RFA are met with regard to each location.
Q. Is the state going to set/regulate pricing on what producers can charge dispensaries, and on what dispensaries can charge patients? If so, what are those values? If not, how is the state going to protect against collusion (e.g. price fixing)?
A. DCP will not be regulating price. The antitrust laws prohibiting collusion are applicable to this industry and are available to the State or private parties.
Q. Are there any safeguards in place at the state level to assure that those granted licenses will have an equal opportunity to succeed?
A. DCP only intends to award licenses to applicants it believes have an opportunity to succeed. Beyond that, the State cannot guarantee business success in this industry any more than in any other line of business. Section 21a-408-52(b)(7) of the regulations provides that a producer shall not: "directly or indirectly discriminate in price between different dispensary facilities that are purchasing a like, grade, strain, brand, and quality of marijuana or marijuana product, provided nothing herein shall prevent differentials which only make due allowance for differences in the cost of manufacture, sale or delivery resulting from the differing methods or quantities in which such marijuana or marijuana products are sold or delivered to such dispensary facilities." The industry is also subject to laws governing unfair trade practices and anti-competitive behavior.
No. of Patients
Q. Do you need to be a licensed pharmacist in order to apply for a dispensary facility license?
A. A Dispensary Facility is a site from which medical marijuana may be dispensed. A Dispensary is a person licensed to dispense medical marijuana at a Dispensary Facility. A licensed Dispensary must also be a licensed pharmacist. A Dispensary Facility applicant does not need to be either a licensed Dispensary or a licensed pharmacist. However, a Dispensary Facility must employ a Dispensary Facility Manager who is a licensed Dispensary (and therefore, a licensed pharmacist). Appendix D of the Dispensary Facility application requires identification of the Dispensary Facility Manager together with the Manager’s Pharmacist License information.
Q. Does retail space for a proposed location need to be leased before the RFA is submitted?
A. At the time of submitting the application, a n applicant must provide documentation indicating they will have the right to occupy the specific location, if a license is granted.