Part 10 · Getting Started
Two-Hat Provider Guide · Part 10 of
The previous nine parts of this guide cover the legal framework, the operational separation, the financial picture, and the practical considerations of the two-hat model. This final part is the concrete path from “I am considering this” to “I am seeing my first cannabis evaluation patient.” The steps are sequential, take meaningful time, and are worth doing in the right order.
Phase 1: Decision and consultation (weeks 1–4)
Before any administrative steps, the provider needs to make a thoughtful decision and consult with the right professionals about their specific situation. This phase establishes the foundation everything else builds on.
Step 1.1
Confirm the model fits your situation honestly.
Re-read the earlier parts of this guide with your specific context in mind. Do the patient population, the state environment, the federal practice you have or want, and the administrative load fit what you actually want to be doing in five years? Providers who enter the model uncertain about whether they really want it tend to disengage during the first hard quarter. Providers who enter the model clear-eyed about both its rewards and its costs tend to sustain.
Step 1.2
Consult a healthcare attorney familiar with cannabis law in your state.
The legal questions in this guide are general. Your specific situation — your existing practice structure, your specialty, your state’s specific cannabis program rules, your other professional commitments — needs specific legal review. A single ninety-minute consultation with a qualified healthcare attorney is the highest-leverage spend of the entire setup process. Make sure the attorney has actual cannabis healthcare experience, not just general healthcare experience.
Step 1.3
Consult an insurance broker about malpractice coverage.
Part 7 of this guide covers what to ask. Get written confirmation of your existing federal-practice malpractice coverage status with respect to cannabis evaluation work. Get quotes for cannabis evaluation coverage if a separate policy is needed. Confirm the structure of how the two policies (if you end up with two) will coordinate. Do this before any other operational step; the coverage answer can change the structure decisions that follow.
Step 1.4
Consult an accountant about the entity structure.
The operational separation works best with clearly separated business entities — usually two LLCs or PCs, one for each practice. Your accountant can walk you through the tax implications, the entity setup process, and the ongoing reporting requirements. Some providers can use existing entities; others need new ones. The accountant’s input shapes the entity structure decisions in Phase 2.
Phase 2: Entity and credential setup (weeks 5–12)
Once the foundational decisions are made, the formal setup begins. This phase establishes the legal entities, the state cannabis registration, and the operational infrastructure both practices will operate within.
Step 2.1
Establish or confirm the federal practice entity.
If you already operate a federal VA Community Care practice, this entity likely exists. If not, your attorney and accountant guide the setup of the federal practice entity, the EIN, the bank account, the billing infrastructure, and the operational framework for federal-payor work.
Step 2.2
Establish the cannabis evaluation practice entity.
The cannabis evaluation practice should be a separate legal entity from the federal practice. Your attorney walks you through entity formation, registered agent setup, operating agreement (for LLCs), and the formal documentation that establishes the cannabis evaluation practice as its own business. The EIN, bank account, and operational infrastructure follow.
Step 2.3
Apply for state cannabis recommendation registration.
Each state with a medical cannabis program has its own physician registration process. Most include an application, a fee, sometimes a continuing education requirement specific to cannabis medicine, and a review period that typically runs four to twelve weeks. Submit the application early in Phase 2 so the registration is in place before you complete the rest of the operational setup.
Step 2.4
Confirm federal credentialing remains active and unaffected.
While the cannabis registration is in process, confirm that your federal credentialing (medical license, DEA, VA Community Care, federal payor contracts) remains active and that the state cannabis registration application is being made under your separate state authority without affecting your federal standing. The two should operate independently; Phase 2 verifies they do.
Step 2.5
Secure malpractice coverage for the cannabis evaluation practice.
Based on the Phase 1 broker consultations, secure the specific policy or endorsement that will cover the cannabis evaluation practice. Confirm the coverage is in effect before seeing any patients. The federal-practice malpractice coverage continues separately.
Phase 3: Operational infrastructure (weeks 9–16, overlapping with Phase 2)
The four-layer operational separation requires infrastructure decisions and setup. These can begin while the state cannabis registration is in process.
Step 3.1
Set up separate EHR or properly partitioned records access.
The cannabis evaluation practice needs its own documentation infrastructure. Options range from a separate EHR system (cleaner separation, higher cost) to a partitioned section within an existing EHR (lower cost, requires disciplined access control). Whichever option you choose, confirm the access controls genuinely prevent federal-practice records from being accessed in the cannabis evaluation context and vice versa.
Step 3.2
Set up separate billing infrastructure.
The federal practice continues billing through whatever billing infrastructure it currently uses. The cannabis evaluation practice needs cash-pay billing infrastructure — typically a point-of-sale system that accepts patient payment at time of service, generates a receipt, and feeds into the cannabis practice’s separate accounting. The two billing systems do not connect.
Step 3.3
Set up separate scheduling.
Whether through separate scheduling software or clearly partitioned calendars within one system, ensure patients booking a federal-capacity visit cannot accidentally book a cannabis evaluation visit and vice versa. The intake paperwork, consent forms, and patient communications for each practice are also distinct.
Step 3.4
Develop the documentation templates.
The cannabis evaluation visit produces a specific kind of clinical record — one that documents the qualifying condition assessment, the medical history review, the risk-benefit discussion, the patient’s questions, and the recommendation outcome. A template that captures all of these elements consistently makes the evaluation work efficient and defensible. Mendry maintains templates that providers can adapt to their state requirements.
Phase 4: Soft launch (weeks 16–20)
Before opening to broad patient demand, run a soft launch with a small initial patient volume. This phase reveals operational gaps before they become structural problems.
Step 4.1
See the first 5–10 cannabis evaluation patients with deliberate slow pacing.
Block time generously around each early evaluation. Use the experience to validate that the documentation templates capture what you need, the scheduling flow works for patients, the billing process completes cleanly, and the operational separation holds up under real patient flow.
Step 4.2
Review the first month of dual-practice operation with your attorney and accountant.
After the first month, schedule check-ins with your attorney and accountant to review how the operational separation is actually working. Are records staying separate? Is billing flowing through the right channels? Are the entities operating cleanly under their respective authorities? Catching drift in month one is much cheaper than catching it in year two.
Step 4.3
Refine based on what you learned.
The soft launch will surface operational gaps. Documentation steps that feel cumbersome. Scheduling friction that affects patient experience. Billing details that need adjustment. Make the refinements before increasing volume; running at higher volume with known operational gaps multiplies the eventual cleanup cost.
Phase 5: Full operation (week 20 forward)
From week 20 forward, the practice operates at its intended volume. The maintenance work shifts from setup to ongoing operations: maintaining the separations daily, renewing both sets of credentials on their respective schedules, tracking regulatory changes in both spaces, refining the practice as experience accumulates.
What experienced two-hat providers consistently report is that the model becomes operationally normal after the first six months. The mental load of maintaining separation, which is significant in the early weeks, becomes habitual. The patient flow becomes predictable. The two practices develop their own rhythms. The early friction is real and worth pushing through; the steady-state operation is sustainable.
What ongoing operations involve
Federal credentialing renewals on the federal practice’s schedule. State cannabis registration renewals on the state’s schedule. Continuing education for both. Malpractice renewals for both. Quarterly financial review of both. Annual operational review of separation integrity. Ongoing patient flow management within each practice. Regulatory tracking through Mendry’s resources or your own monitoring. The operational steady-state is real work, but it is work that fits into a sustainable practice rhythm.
What Mendry provides along the way
Mendry exists to make this path easier than doing it alone. The resources Mendry maintains for providers entering or running the two-hat model include:
- State-by-state program summaries with current registration processes and qualifying conditions
- Documentation templates for cannabis evaluation visits that align with state requirements
- Peer network of two-hat providers willing to share what they have learned
- Referrals to healthcare attorneys, insurance brokers, and accountants familiar with the model
- Regulatory tracking that surfaces changes affecting either practice
- Operational frameworks for the four-layer separation, refined across the provider network
- Ongoing education and learning opportunities specific to the two-hat practice
None of this replaces the provider’s own judgment or their own consultation with the professionals their specific situation requires. All of it makes the path more navigable than building it alone.
The final framing
The two-hat model is not for every provider. The veterans who want this option are real, and they are not currently being well served by the existing healthcare system. The providers who are willing to take this on are the people who close that gap. The work is operationally complex, regulatorily careful, and clinically substantial — not unlike most meaningful medical work that ends up mattering. If you have read this far, you are at least seriously considering whether this is something you can take on. The next step is the one that turns consideration into decision. Mendry is here when you want to make it.