How To Open Up a Dispensary Selling Marijuana

dried cannabis bud strains in glass jars

Do you live in a state that has legalized marijuana products? Are they legalized for medicinal or recreational use? 

Last year, the marijuana industry made staggering profits. Those involved reap the rewards of these fast-growing sales. Considering this, it is natural to ask how to open up a dispensary. 

With sales increasing by 35% this year alone, the market is among the fastest-growing in the U.S.

How to Open up a Dispensary

Opening up a dispensary is not as easy as many other businesses. 

The marijuana industry is a highly regulated one. While the allure of a booming industry is strong, there are a lot of legal issues to resolve. 

Some of them are obvious, like whether your state allows the sale of marijuana. Others may not be so obvious, such as liquid asset requirements. Many states require that you prove you can afford your business before you even start it.

Start-up Costs

To start a dispensary can be a daunting financial venture. 

Most startups in the cannabis industry end up spending at least $250,000. It is quite common for businesses to go over that amount by several times depending on what state you live in. Many of these expenses are unavoidable, so make sure that you have a solid foundation.

Another issue for those wanting to know how to start a dispensary is finding capital. 

It is not as easy to find capital as a traditional business. The cannabis business is still classified as illegal by federal law. Because of this, the interstate banking system is off-limits.

You will have to find alternative means to get funded, from business partners to crowdsourcing.

Find a Suitable Location

It is vital that you check your local laws. Even if you live in a state that allows marijuana sales. Some local towns and cities do not allow dispensaries to open up within city limits. 

If this applies to you, don’t worry. Check the county you live in and other nearby towns. There is a good chance that one of them will allow you to open up a dispensary.

Dispensaries are like any business. They need accessibility in order to be successful. 

Find a rental property near a busy road, or next to a popular transit stop. Anywhere that people will see your business. This will ensure that you have not only good foot traffic but also word of mouth will spread faster. 

Regulations

Once you have found a suitable location, you have to take care of regulations. In every state that has legalized marijuana, there are licenses you must acquire. 

Getting a license isn’t the easiest thing to do, and requires a great deal of time, patience and money. When dealing with the legal side of things, make sure to seek out the advice of a lawyer knowledgeable in these areas.

One of the other issues you will have to contend with are legal limitations. In some states, there are a limited number of dispensaries allowed by law. In others, regulations exist that make certain areas completely inaccessible to the market. 

In all markets, the hidden cost of opening a dispensary can hide among the regulations. Licenses can be expensive and can also require additional legal work.

Business Plan

Like any business, marijuana dispensaries require a concrete business plan. In some states, you have to provide this to even get a license. 

A person who wants to open up a dispensary will need an excellent business plan. You will need to have an executive summary. You will also need a strategic marketing plan. 

The industry is ever-growing, and you will need to know how you are going to keep up. Many business plans can range from 20 to 50 pages, and as a cannabis dispensary, yours may even be longer.

Understand Your Inventory

In addition to having great products, understand how to control inventory. Minimizing loss and maximizing profits might as well be a catchphrase. 

You will need to have a computer system that removes sold products from your inventory. You will need to keep exact records about what you have bought and sold. Consider looking into dispensary packaging and buying at wholesale prices.

Taxes and Cash

The marijuana industry is not just heavily regulated. It is also taxed more than other businesses. 

When you think of how to start a dispensary, consider this: virtually all of your business will be done in cash. Having adequate controls in place can save you from an expensive mistake. If you are a young person this may be almost completely foreign to you. Do not hesitate to seek the advice of an accountant. 

Keep up with Laws

Unlike many industries that have existed for decades, the marijuana industry is changing. New laws are constantly being considered and passed. 

It will be your responsibility to stay up to date with them. What it takes today to open a dispensary is not set in stone. Tomorrow a law could be passed that would change the answer to the question entirely. 

How to open up a dispensary is not a simple question to answer.

Have a Passion for the Business

If you have never tried marijuana or don’t particularly like it, maybe owning a dispensary isn’t for you. Like any small business, you will be contending with established businesses. 

You will have to deliver an unforgettable store experience in order to be successful. In order to do this, your customers must see that you care about your business.

Take the Leap

While the prospect of owning a dispensary is both exciting and interesting, make sure to keep a clear head. You want to be sure that you are not just asking yourself how to open up a dispensary. Ask yourself if you should

You will need drive, determination, and grit to succeed in this industry. The market growth is such that in Colorado alone there are more dispensaries than there are McDonald’s or Starbucks. 

While the field will not become less crowded any time soon, the business outlook is still incredibly bright. There is an incredible demand for dispensaries and as more states legalize the sale of marijuana, the future of the cannabis industry looks bright.

We invite you to read more articles on our blog to learn how to do things the proper way!

 

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