Millions of people across the United States are reaping the benefits of medical and recreational marijuana legalization. This increase in marijuana customers is expected to continue for many years to come.
An investment in a marijuana dispensary can be a profitable decision. This potential is causing entrepreneurs to wonder if they should open a cannabis dispensary. There are laws, regulations, and factors that must be considered before investing in a cannabis dispensary.
Opening a marijuana dispensary requires a substantial financial investment, level of commitment, and drive that is not for everyone. The following information will examine how to open a cannabis dispensary.
Factors to Consider Before Opening a Marijuana Dispensary
Opening a medical marijuana dispensary is not for the weak-willed. There are a number of obstacles that arise and factors to consider.
Level of Commitment
Access your level of commitment. Consider your motivation for opening a cannabis dispensary. Your commitment should be deeper than simply financial gains. Marijuana entrepreneurs need to possess a passion for marijuana for medical and/or recreational reasons.
Investing in a medical marijuana dispensary is not without legal precautions. Marijuana is still illegal on a federal level. For this reason, it is imperative that you have a lawyer who specializes in marijuana laws.
You must also research the marijuana laws in the location you wish to open a cannabis dispensary. If there are no location-specific laws or regulations regarding marijuana sales it is an unwise decision to open a dispensary.
It is not worth the financial losses that would occur by illegally opening a marijuana dispensary. You must ensure that all legal points are considered, checked, and evaluated by your legal professional.
You can expect to spend a hefty amount of money to start a cannabis dispensary, ranging from 500,000 to upwards of 1 million.
There are financial risks for opening any business but even more so for a cannabis dispensary. This is because the majority of banks are not willing to handle the transactions or provide services for medical marijuana dispensaries.
Marijuana dispensary owners are also reporting that they are being taxed in excess amounts. Legal professionals advise that those who are interested in cannabis entrepreneurship should examine U.S. Code 280E before making any major decisions.
It is crucial that you thoroughly research the demographics of the location you wish to open a dispensary. Read reviews from customers of local competitors. Explore their websites to see what they are offering their customers. You need to determine if you are able to compete with the prices, hours of operation, or locational convenience of other dispensaries in the area.
How To Open a Cannabis Dispensary?
1. Choose a property
After you determine that your commitment, legal, and financial situation is sufficient for opening a cannabis dispensary you must choose a property. The property must meet all of the area’s local regulations for marijuana dispensaries. There are laws that specify the number of feet dispensaries are required to be from schools, churches, etc.
Even if the building is compliant, you must also be sure that the owner is comfortable with a cannabis dispensary. Many landlords are not comfortable with tenants opening a marijuana dispensary because of the risk of legal repercussions.
Be sure that the location you have chosen has a market for marijuana. It may be legal in some areas but still frowned upon due to social stigmas. Check local votes on marijuana use to see how the community feels about marijuana dispensaries.
2. Create a Business Plan
After choosing a property and securing your finances, you must then create a detailed business plan. This is an important part of the preparation that is often overlooked. A business plan is crucial to prepare yourself financially for how much money you will be spending.
Laws and regulations have created an industry that is expensive to break into. Banks will not finance loans for marijuana dispensaries. You can expect to spend a large amount of money completely out of pocket. Increased accessibility to marijuana has also created a market that presents many competitors. Expect and prepare for these issues.
It is critical that you ensure that you possess the money needed to operate a marijuana dispensary. Factors to account for include:
- Cost of Property Lease
- Cost, Transport, and Storage of Products
- Employee Salaries
You will also need to account for the cost to protect your products and business through security systems and/or employees.
3. Get Licensed to Open Your Dispensary
You can expect to spend a substantial amount of money on legal fees and licensing to open a cannabis dispensary. The amount is specific to the location you have chosen to open your business.
4. Buy Products
It is important to offer customers a variety of products that will satisfy customers who are new and returning marijuana users. Customers enjoy dispensaries that offer products, including oils, edibles, transdermal patches, and loose flowers.
Marketing your dispensary is crucial to success in the cannabis industry. There are many competitors, and you must provide customers with an experience that is worthy of their loyalty.
You must develop loyalty programs that reward customers for shopping at your dispensary. For example, customers enjoy dispensaries that offer daily specials through SMS and/or email.
6. Continuous Improvement
Even after your business is fully operational you must continue to improve areas that may need attention. Encourage honest feedback from your customers and respond to all customers in a mature, respectable manner.
Contact Paybotic for Financial Services
Paybotic is the leading financial services solution in the marijuana industry. Paybotic helps dispensary owners choose the best payment processing services specifically for their business needs. This is a great way for new dispensary owners to reduce costs and increase their revenue.
Contact Paybotic today to learn more about their marijuana financial services and how they can help you operate your dispensary.