In 2015, the North American cannabis industry was worth $5.04 billion. In 2016, it grew to $6.73 billion–a 34% increase. By 2021, it’s expected to grow to $21.6 billion. People in the industry, or aware of the industry, call this amazing development the “green rush”.
Many entrepreneurs and venture capitalists are looking to invest their money in the prosperous cannabis industry. One of the best ways to do that is by opening a dispensary.
Are You Committed?
While running a dispensary certainly has its enjoyable moments, it’s not all fun and games. This is a new industry that can become volatile with the political tide, so it requires a serious commitment.
Although people nicknamed it the “green rush,” don’t expect a fast return on investment. You need to prepare to be committed for the long term if you want to feel satisfied in this field.
Long before you’re officially opening a dispensary, you’ll need to do extensive research on legislation and regulation. You’ll not only need to learn about the laws already in place but proposals of laws that may be passed in the future. Consulting a legal professional is almost necessary.
Additionally, there are different tax codes for dispensaries, so it’s also wise to consult a CPA.
Maintaining a 100% legal facility will be a constant battle, but it’s worth it if you’re passionate about this business.
Choose a Location
Before you even consider the cost of your location, you have to find one that fits all the requirements. Your dispensary must be at least 1000 feet away from any schools, churches, residential zones, and other dispensaries.
Of course, you need to consider that cannabis laws are always changing, and the compliant property you have one day may not be compliant the next.
Write Your Business Plan
One of the biggest components of your business plan will be your cash flow. You’ll need to write out your access to capital and your proposed budget. There are a lot of moving parts to opening a dispensary. Here are some of the big ones.
Due to federal law, you won’t be able to get a bank loan for this venture. With all the regulation and competition nowadays, you’ll need $300,000 to $500,000 just to start up.
Pay the Fees
To apply for and attain your license is a lot more expensive than more people realize. Some states even charge up to $15,000 for a dispensary license. Plan for that expenditure.
Opening a dispensary will also open up dispensary jobs. You’ll probably only need a few employees, but make sure to budget their wages, as well as rent, marketing and advertising, security, and furnishing your business. Don’t forget that many cannabis products require special appliances.
Secure Your Products
Some dispensary owners choose to grow their own product, and some don’t even have a choice–it’s legally compulsory.
There are not only seemingly endless options of cannabis, there are many forms of cannabis itself. Look at wholesale options in the forms you want to focus on, whether it’s dabs, edibles, or oil.
Keys to Opening a Dispensary
While this guide gives you a basic outline for developing your dispensary business plan, there are always unforeseen hurdles.
If you’ve run a dispensary business before, don’t hesitate to send us a message and share your experience.