Every day, more and more people are transitioning into the cannabis business community. Without a doubt, there is money to be made, and owning or managing a dispensary is a dream shared by many. The reality is that it takes hard work, patience, fortitude, and planning, to succeed. If you have questions about how to open a dispensary and someone were to create an honest job description for a dispensary owner, it might resemble something like this:
“Wanted: We’re seeking a tireless, trail-blazing individual with extensive problem-solving skills, a steel will and a heart of gold. Do you see challenges as opportunities? Can you handle mountains of technical paperwork and ever-changing regulations with the grace of a Buddhist monk? Are you OK with investing blood, sweat, and tears along with vast sums of (other people’s) money for an endeavor that remains federally illegal, and banking services may be canceled without notice? If this is you, apply today.”
If you’re contemplating how to open a dispensary our Top Ten tips have got you covered!
1. Know Thyself
While the job description above is fictitious, it raises some very good points. Namely, you have to be honest about whether you’re a good fit for running a cannabis dispensary. While the rewards can be great, so is the commitment to seeing it through. You need to know your personal strengths and weaknesses to build a strong, complementary team.
2. Research the Cannabis Laws and Regulations in Your State
Cannabis laws, regulations and licensing requirements vary from state to state but they all share one thing in common: legal, regulated cannabis is a new industry and even government officials are learning their way. An owner or manager must have a solid grasp of the complicated legal landscape, and this may require working with attorneys and compliance specialists as well. The old adage “look before you leap” is really good advice.
3. Costs and Capital
According to a 2018 report by the National Cannabis Industry Association (NCIA), opening a dispensary can cost anywhere from $250,000 to $750,000, or more. Opening a dispensary in California can easily cost millions of dollars even before your doors open for business. In the Golden State, you’re going to need a lot of gold and access to serious money is a journey unto itself.
4. Finding a Property
It is not superfluous to say there are many regulations on the physical location of your dispensary. Aside from normal commercial zoning requirements, cannabis dispensaries are commonly banned from areas close to schools, daycare centers, churches, government buildings, etc. You must do your homework to see if a potential location meets the regulatory requirements. Keep in mind that some states require the physical location to be set prior to submitting your application. This is a process that can take months so capital costs must be considered because no money will be earned during the application process.
You also need to deal with the vast physical and electronic security measures required by your city’s codes. Also, while it may not be a deal killer, how will your potential business neighbors react to your dispensary? You may need the skills of a diplomat as well. Being a good neighbor means also being a good ambassador.
5. Get With the Plan
No matter your level of business experience, you’re going to need a formal business plan. It not only serves as a guide for you, but investors and possibly regulators may also insist on it. This is a crucial part of how to open a dispensary, so don’t take it lightly. Part of any business plan analysis requires SWOT for analyzing your Strengths, Weaknesses, Opportunities, and Threats.
6. Now Taking Applications
Many cannabis entrepreneurs believe applying for and opening a dispensary is akin to building an airplane while it is flying. Regulations and policies frequently change which may affect the licensing process. This is a team game, so ensure you have the right people who understand the application environment. After all, a denied application can stop you in your tracks, or at the very least, require a costly change in direction.
7. Run It Like a Business
You’re going to need software to run your business. Aside from your state’s seed to sale tracking requirements, having a cannabis software partner like Blaze can make many day to day operations much easier to implement. Again, you’ll need to do your research, ask the right questions, and have the right partner in place before customers walk through your doors.
8. The Cannabis Marketplace
Selling cannabis products to patients and adult-use customers is a very rewarding way to earn a living. A key element is providing the right mix of cannabis products for all your customers. Who is going to make purchasing and inventory decisions? What kind of experience do they bring to the table? What is their relationship with cultivators, brands, and distributors? How many skews do you envision providing in your shop and how will you manage all of it? Again, having a cannabis software partner like Blaze that can help manage inventory, shelf life, POS, delivery options, and customer relations data is incredibly important for operating a successful dispensary.
9. Your Staff
Payroll is one of the most costly elements for owning a dispensary. It’s not just the budtender teams, you have to pay for security, purchasing managers, marketing staff (even if outsourced) and operations personnel. But the costs are only part of the issue. What type of environment do you plan for your dispensary as this may affect your clientele? Who are you trying to attract and have coming in on a regular basis? In the end, your staff helps shape the dispensary’s environment, so have a plan and choose wisely to attract the customers you seek.
10. Revel in What You Are Building
Operating a dispensary is a challenging yet tremendously rewarding way to earn a living. You’re going to need solid business instincts and experience along with the right people, capital, and software platforms in place. In the end, you’re helping people with their personal health and wellness which hopefully brings you joy each and every day.
Everyone at Blaze understands your passion so let us know how we may help. Schedule a demo with us.