It’s almost 2019 and marijuana remains technically illegal in the United States. U.S. Attorney Jeff Sessions’ enthusiasm for enforcement hasn’t stopped the cannabis industry from growing profitably, though. You could even say, “growing like a weed.”
Despite the somewhat unfriendly administration in Washington D.C., nine states and the District of Columbia allow recreational marijuana use. Thirty states allow medical use. Pot sales are a $9 billion dollar business in the U.S.
Ready to jump on to the prosperity bandwagon? Open your own dispensary! Read on to learn how to open a marijuana dispensary.
How to Open a Marijuana Dispensary
You might think it’s just a matter of signing a lease, getting some displays and collecting money. The reality is a little different. Plan on doing a little soul-searching and self-discovery before a commitment to this or any sort of entrepreneurial adventure.
Opening a business is not for the faint-hearted. A dispensary or any other business requires persistence, determination and a willingness to do deal with conflicts. Double down on those traits for a marijuana dispensary.
Budding entrepreneurs need to evaluate themselves for fitness before investing in their first bud. After that comes research, writing a plan, finding capital and actually getting the business open.
Are You an Entrepreneur?
Some important indicators for success:
- Self-motivation- running your own business means doing lots of tasks you might find unpleasant or boring.
- Financial foundation- you won’t have a steady paycheck and your dispensary may take time to reach profitability.
- Zen-like calm- stress can kill your logic and deal-making ability. Ability to remain unflustered in times of stress is critical.
- Expert-level knowledge- dispensary ownership is not for novices. You need both business savvy and pot knowledge. Lots of it.
- Passion- merely liking pot is poor business planning. A passion to make the industry better, in the long run, pushes you forward.
- Takes chances- the most well-researched plan still requires a leap of faith to execute.
An entrepreneur does the research and makes that leap. There are very few copycats in the current marijuana industry- simply because there are so many new businesses. Blaze your own trail!
Do Your Research
Not every person in every state is eligible to own a dispensary. Before you get too committed, do your research. There may be background checks, financial hurdles and more.
Prepare yourself for a Wild West atmosphere of frequent regulation changes, federal and state law enforcement, taxes and accounting. This happens before you even begin operation. You must understand the existing laws about pot cultivation and sales, as well as the impact of proposed laws and changes.
Find a Spot
Regulation makes finding a location difficult. Dispensaries have certain zoning, geographical and physical needs. Make sure you meet them all before investing time and money.
Rental requirements vary. Market saturation in some areas can make a location that meets regulatory requirements very expensive.
Make a Plan
Your plan is a blueprint for success. Many places are fully saturated with dispensaries. What will set yours apart?
Use your company description to go into detail about the customers you plan to serve. Explain your competitive advantages. Describe the perfect location and store layout for your dispensary.
Go into as much detail as you can to make your company stand out.
Display an understanding of your industry outlook and target market. What are the trends and themes? Who are your competitors? What do your competitors do?
Are they successful and why? How are you going to to do better? Show that you have done your homework.
Organization and Management
Who will run the business and what are their qualifications? Use an organizational chart to lay out who does what. If you have resumes or bios for key staff or partners, add them to the plan for reference.
Services and Products
Describe your product lines and additional services. There are many product options. Oils, edibles, bus or vaping juice all have different requirements.
Will you offer education? If you are offering suggested strains, for example, what cannabis job training does your sales staff attend?
How does your product mix benefit customers?
Marketing and Sales
Describe how your dispensary will attract and retain clients. Describe how the sales process works. Walk the reader through from the entire sale.
Be detailed, as this section of the plan plays into your financial projections.
If you have logos, ad copy or a marketing plan, add them here.
Provide a prospective financial outlook for the next five years. Forecast your financial statements monthly and quarterly at least five years out. Clearly explain your projections and assumptions.
Use charts, graphs, and other visuals to get the message across.
With financial projections done, you know what you need to get the business going. Because of regulations, don’t expect a bank loan. Cannabis is still an illegal business at the federal level.
Most dispensaries are funded through personal funds, friends, and family. If you have to ask for funding, clearly explain how much and what it’s for. Specify if you need funds to buy equipment or materials, pay salaries, or cover specific bills.
Make sure you clarify if this is debt (that you pay back) or ownership (equity). Include a description of how investors get their money back. Include a projected return schedule.
Joining the multi-billion dollar marijuana industry is a sure way to grow your money. The risks are high and hard work is required. However, with a good blueprint for success, the right attitude, and effort, you will be on the right path.
We’ve laid out how to open a marijuana dispensary, now get out there and go do it! For ideas on keeping customers happy, personal traits of successful people, or even conflict resolution on the job, keep reading this blog!