If you’re seriously thinking about starting a cannabis dispensary, you need to consider all the aspects of a marijuana-based business. Do you have a plan? Financing? Licensing?
Are you a cannabis enthusiast? Do you find yourself talking about the benefits of the herb, consulting others on how to put together a grow setup, and the dankest strains coming out from the top growers? Maybe you should think about opening a cannabis dispensary?
Cannabis is a booming industry, creating over 211,000-jobs in the United States. Legal sales of the plant will amount to more than $1.6-billion in 2020, and you can get yourself a piece of that “Georgia” pie by opening a dispensary.
Some celebrities franchised their cannabis fame, with rappers like B-Real from Cypress Hill starting the well-received “Dr. Greenthumb” brand. You could be the next marijuana mega-entrepreneur waiting to happen!
So, how does it work? If you want to open a dispensary tomorrow legally, what are the rules? It seems strange saying that, considering asking that question would have gotten you jail time only a few decades ago. Still, time is progressing in the right direction, and marijuana freedom is around the corner at a federal level.
Let’s unpack what you need to know about opening a marijuana dispensary in your state.
What are the Considerations for Opening a Cannabis Dispensary?
If you’re seriously thinking about starting a dispensary, you need to consider all the aspects of a marijuana-based business. Do you have a plan? Financing? Licensing?
Like all other startups, your dispensary will go through all the teething problems of dealing with the first few years in business. Unfortunately, statistics show that 90% of all new small businesses end up failing in 5-years.
Don’t be one of the statistics; think about the following factors before founding your brand.
- If you have any previous infringement or conviction with law enforcement or the court system, getting approval for your dispensary will be challenging.
- Operating a cannabis dispensary is a high-risk venture, like a jewelry store.
- What are the residency requirements of your state?
- Think about the costs of doing business – do you have a plan for payroll, taxes, and overheads?
- No FDIC-insured banking institution will finance or work with marijuana businesses.
- If you need funding, you’ll have to source angel investment.
- It can take up to 18-months or longer to receive license approval.
- The laws regulating the industry are in constant flux and can change at any time.
Laws and regulations are different from state to state, and what works in California won’t go down the same way in Florida. We advise you to investigate acquiring legal counsel based in the state you want to open.
How Much Money to Start a Dispensary?
Many entrepreneurs underestimate the amount of capital they need to open a dispensary. One of the key considerations is that your business will mostly be all-cash. Banks won’t work with you, and that places plenty of strain on your resources when it comes to managing your supply chains.
Having cash on hand at your business or home makes you a high-risk robbery target, and there’s a good chance assailant will invade your home if they find out where you live. Being a dispensary owner requires you to employ a security staff compliment that keeps your business, and you, secure from threats.
During the permit process, you’ll be paying legal costs every step of the way, and before you know it, you’ll be down to the tune of up to $300,000. Inclusive Pay can help you with Cannabis business loans as well as helping your get investors to start in addition banking and merchant processing.
What Licenses are Needed to Start a Cannabis Dispensary? – Licenses and Legalities
New cannabis dispensary owners must seek competent, experienced help to navigate the complexities of the legal system.
Retaining a legal professional is the smart thing to do, and they might help you avoid hefty fines or jail time if you try to do the paperwork yourself and fight the system.
What’s the Best Location for Your Dispensary Storefront?
When you find a city or town where you want to open your store, find a local property consultant specializing in the commercial market. They’ll tell you everything you need to know about zoning laws around the city and show you the ideal locations for your storefront premises.
Every state has different zoning laws for cannabis businesses, and you could end up on the high street, or tucked away in an alley. Make sure you make inquiries with neighbor tenants about security in the area before settling down on the right storefront location.
How Do You Market a Local Cannabis Dispensary?
Marketing your dispensary is all about efficiently handling your marketing budget. Big brands like Dr. Greenthumb, Cookies, and Exotics all have masterminds behind marketing strategy. If you want to make it in the big time, you’ll need professional PR firms and marketing companies to help you succeed.
Marketing is going online and social. Today, everyone communicates through Instagram, Snapchat, and Twitter. You need to master these platforms if you want to grow your audience and build your brand. Hiring an expert in social media marketing can help spread awareness of your local storefronts to communities in the area looking for your cannabis products.
How Do You Fast Track Success? – Find a Mentor
Speak to any successful entrepreneur, and they’ll tell you that the secret to business success is working with a mentor. A mentor can help you see pitfalls you wouldn’t otherwise identify on your journey to cannabis success.
A mentor helps you dramatically reduce your learning curve, giving you practical business strategies for your situation. It’s going to be challenging to find mentors in the cannabis industry because it’s still new.
However, there are plenty of successful businesspeople and angel investors willing to connect you to the right people. However, it’s up to you to get out there and meet these individuals. As they say in finance and business – your network is your net worth.
Key Takeaway for Starting a Cannabis Dispensary
There is only one key takeaway with this article. By finding and working with the right people, you can accelerate your success and build your brand fast.
The marijuana business is competitive, and there’s always a threat of robbery or something worse. Unless you have a solid business plan, angel financing, and legal help, it’s better to think about doing something else.