The cannabis industry is booming. Even the pandemic could not put much of a dent in its steady growth. The North America legal cannabis market is expected to reach over USD 65 billion by 2027. Medical marijuana constitutes a large share of this market; in 2019 Canada reported a total spending of 500 million Canadian dollars in medical cannabis. Since the legalization of marijuana in 2018, the country has been witnessing a rapid increase in the sale of recreational marijuana as well.
Cannabis dispensaries are sprouting like mushrooms everywhere. If you are looking for an innovative business plan, there is no better time to invest in your own cannabis dispensary. There is huge potential to make substantial profits as the market is expected to grow exponentially in the coming years. However, establishing a successful cannabis dispensary requires a thorough knowledge of the pot market, lots of hard work as well as innovative business strategies. Don’t worry. After talking to a host of leading cannabis industry experts, we have come up with a list of things that one must absolutely know before opening a cannabis dispensary. Let’s take a look
7 things that you need to know before opening a cannabis dispensary
- Start planning your cannabis dispensary and its future
‘Creating an outline is Step Zero,’ Devon Martinez, says a compliance specialist at the consulting firm Cannabis Advising Partners (CAP). Start making a to-do list and jot down your vision regarding the business and future plans. Chalk out a budget. This will be extremely helpful to come up with a solid business plan as you move forward and apply for a license. ‘From there,’ Martinez adds, ‘you’ll have a better understanding of what kind of building you’ll need, what cities you should look to operate in, and what the business plan will look like.’
- Choose the right location for your cannabis dispensary
Choosing the right storefront location is the key to any successful business. Some states are friendlier to cannabis businesses and you’d probably want to start your first cannabis dispensary in one of those states. Not only the right state, you need to identify the right city and the best area to open your cannabis store. Consider the clientele you are expecting to reach and choose a location accordingly. Licensing costs, taxes and other costs of doing business need to be taken into account before you can zero in a location.
- Finding the real estate
Choosing the right location is only half of the job. You need to find the right piece of real estate to open your dispensary. After you have chalked out a solid business plan, crafted a vision and set a goal, you need to search for a property that will be ideal for your planned storefront. Of course, budget is a major factor. Different cities have different distance requirements for opening cannabis businesses. ‘Finding the right real estate can be very difficult and requires understanding the local cannabis laws and their zoning rules,’ Martinez says. Reach out to a real estate agency if you need. You don’t need to buy a property, you can always rent one to start your first dispensary.
- Learn the local laws and regulations
Whether you are in the US or Canada, different provinces or territories have different laws regulating the retail sale of cannabis. There are different laws about what and how much you can sell. Different provinces or states have different age limits for marijuana consumption. Marketing and packaging regulations also vary significantly. Before you plan to open a dispensary in a particular state or province, learn the local laws and obligations. Go to cannabis lawyers and compliance if you need any suggestions or clarifications.
- Get your business duly registered and licensed
Registering your business with the local authority and getting a license is the first thing to start a legal cannabis dispensary. The license fees and the renewal rates vary from state to state. Applying for a license and getting approval takes time and money. So, you need to prepare for it. Some states only give out a limited number of licenses. To get your dispensary licensed in such a competitive scene, you need to come up with a convincing and profitable business plan. There are professional licensing experts whom you can consult before applying for a marijuana dispensary license.
- Don’t hesitate to enlist professional help
Often running a successful startup requires the help of expert professionals in different areas of the business. You may need to employ outside B2B services, marketing consultants, accounting farms, professional IT services to run the dispensary smoothly. However, there are still a lot of stigmas attached to the pot business, and many B2B services, consultants and experts are not at all cannabis-friendly. Do some research and find out professionals and consulting firms that hold no biases and will help you with your daily operations.
- Funding your cannabis dispensary
Opening a cannabis dispensary is not cheap. You have to wait for some time before your shop starts operating to its full capacity and you get to see some substantial profit. But you have to put a sizable amount of money in before you open the store. The license costs can be huge; you’ll also need funds for covering legal costs, real estate, and stock purchases. Getting loans for opening a cannabis dispensary can be hard. Due to social stigma, many financial institutions are not ready to fund cannabis businesses. If you are in the US, you won’t get a bank loan as cannabis is still a prohibited drug under federal laws. But there are alternative sources that you can tap for funding. Crowdfunding can be very effective these days. Do your research, consult with business strategists, and come up with a list of probable investors for your cannabis shop.
Opening your cannabis dispensary, like creating any other startup, is very exciting. But you need to have a clear vision and business plan before you get involved in the cannabis trade. Follow the above guidelines, research extensively, and always stay informed. These are the key things to build a successful cannabis business.