Marijuana prohibition is receding one state at a time, and predictably, entrepreneurs are flocking to this growing opportunity.
There’s a full-on gold rush, or a green rush, in progress. But between conflicting laws and regulations, there is a bit of confusion with respect to how to get involved in this budding industry.
If you’re at all in the know, you’re aware that getting involved in the marijuana business usually means running a dispensary. But figuring out just how to open a marijuana dispensary can seem daunting.
But like any business, the process can be broken down into a few straightforward steps.
How to Open a Marijuana Dispensary in 5 Steps
Dispensaries came about when marijuana was legalized for medicinal use. Under federal law, prescriptions for marijuana couldn’t be filled at regular pharmacies, so dedicated dispensaries became necessary.
As recreational marijuana has become legalized, the dispensary framework was kept to make regulation of the product simpler.
So, getting involved in selling marijuana means opening a dispensary. To open a successful, and more importantly legal, marijuana business, start with these five points:
1. Do Your Homework
The laws regarding how dispensaries can conduct business can vary wildly from state-to-state. Even mundane details like how you are allowed to accept payments are subject to legislation and regulation, so you will absolutely need to research every aspect of the business in your area, down to the last detail.
And that’s in addition to researching the products you’ll be selling. Maybe you have the general knowledge to answer questions like “What is CBD?” but unless you’re a serious connoisseur, you’re not going to be able to give an in-depth explanation of every strain of marijuana you stock.
Between dealing with competition and the potential legal ramifications of the smallest oversight, research will be critical to your enterprise.
2. Find a Rental Property
Finding a property for a dispensary is a subject the requires its own set of research.
Different states and even individual municipalities have their own requirements for where a dispensary can be located. In San Diego County, for example, a dispensary must be more than 1000 feet from a church, 1000 feet from a school, 1000 feet from a residential zone, and 1000 feet from another compliant property. Many localities also require certain structural qualities of dispensaries.
And that’s to say nothing of dealing with your landlord. Many property owners don’t want to deal with having a dispensary on their property. They will also sometimes come under pressure from law enforcement to not lease space to dispensaries.
Location is always a key aspect of any business, but finding an appropriate space is an even more critical consideration in ensuring that your dispensary is both compliant and convenient for your customers.
3. Form a Business Plan
Because of the special considerations of the marijuana industry, it is extra important to have a plan in place.
For instance, due to still being illegal at the federal level, you won’t be getting a bank loan for your dispensary. So you will need to come up with alternatives to raise capital.
Determining how much capital you need will require a budget. You’ll also need to research your competition and come up with a marketing plan to set yourself apart from the herd.
You’ll need all of the details ironed out well in advance of opening day.
4. Get Licensed
Getting licensed is difficult, expensive, and non-negotiable. Strictly speaking, the only thing separating a dispensary from an organized crime operation is that piece of paper.
Different states have different requirements, which you will hopefully have read up on in step one. In addition to the licensing fees themselves, you’ll probably also want to set aside funds for legal expenses.
5. Get Your Product
Having secured funding, leased and appropriate location, and ensure absolute legal compliance, now you can actually start running a functioning dispensary. Which, of course, means stocking product.
Many dispensaries grow their own product, and in some states, it is actually mandatory that they do so.
In localities where it is permitted, you can also go through licensed wholesalers. This is often the favored choice as it allows you to keep a wider variety of products than most small dispensaries would be able to produce on their own.
Ultimately, it just depends on the legal requirements and your priorities in marketing your business.
Walk the Line
All business ventures carry risk, but because of marijuana’s precarious legal status, the risks here are a bit more tangible.
To keep out of financial and legal trouble, you’ll have to cross every “T” and dot every “I.”
But remember, they say that nothing worth doing is ever easy. Learning how to open a marijuana dispensary requires a lot of leg work, but should you rise to the challenge, it can be a highly rewarding venture.
Want more startup business advice? Keep reading our blog!