We get it. Starting and operating a cannabis dispensary has come of age. Laws have become reluctant, and the 35 million regular users of pot are in marijuana heaven. But, with this reluctance, a new generation of entrepreneurs have come up, salivating to get a piece of the now booming business. If you are one such ambitious business person, buckle-up as we take you through the steps you need to take to open and operate a successful cannabis dispensary.
Understand the risk
Before you take your hard-earned money and invest in a sinking ship, first understand the risks involved. Just because the government has relaxed some of the laws surrounding marijuana does not mean there isn't a grey area. For instance, marijuana is still classified as a Schedule 1 drug, which means it's classified as something with no medicinal value under the federal law. The difference comes where the federal and state law clash, which is what you need to be wary of.
Your best bet to understand this is by consulting a knowledgeable lawyer so you can understand both federal and state laws. Also, states' federal policies are not considered laws, which means they are subject to change under different administrations. This makes it crucial for you to hire the best attorneys and CPAs to ensure you comply with the law and the taxman.
Now, let’s get to business and show you how to open and run a successful dispensary.
- Start with research
- Find your location
- Have a concrete business plan
- Workout your team and operations
Local governments have a list of “must-haves” you need to fulfill before you are allowed to run your business. Some of these include:
- You, your investor, or license holder must not have a felony conviction
- Your desired location has to be at least 500 -1000 meters away from churches, schools, and restricted areas. These areas vary by state.
- You must have a business plan outlining costs, business licenses, property ownership, and much more.
- You must comply with safety regulations, such as having gloves, respirators, UV protectors, and other safety gear.
Once you know what’s needed from the government, you must determine if you have a viable target market for your product. The typical cannabis user doesn’t necessarily look like a stoned, messy-haired guy, lazing around on his couch. While 35 million Americans use weed regularly, it's essential to learn your target market demographics, psychographics, needs, and wants. This will show you how to connect with your customers.
Every corner you turn seems to have a dispensary insight, but that doesn't mean you can't find a great spot for your business. The idea here is to be patient and tactful in your search. The most important thing to remember is adhering to the regulations and rules set by your city. These include all the ones we've mentioned earlier and laws relating to security and surveillance. For instance, besides being at least 1,000 meters away from schools, parks, and libraries, all your windows and entry points must have locks and surveillance round the clock. You must also report any slight disturbance or break-in into your dispensary.
Once you spot the perfect location, you must take a lease, letter of intent, or proof of ownership if the property belongs to you to the government. Be sure to first speak to your lawyer, CPAs, and Dispensary Permit reps to discuss the pros and cons of ownership and leasing. If you have no option but to lease, a Dispensary rep will help you navigate brokers, landlords, insurance approvals, and real estate contracts.
I know, I know. Cliché, but this statement has been mentioned so many times because it stands true. Start by defining your goals, and build your dispensary’s mission statement around it. Make sure you know if your state prioritizes job creation and living wage or high-quality cannabis products so you can include it in your proposal. Capture who you are, your target market, competition, team, and financial summary. Also have milestone traction, cannabis producer, processor, and retailer. It helps to include the problem and solution you wish to solve with your dispensary. If you plan to have future products or services, mention them as well. Another critical aspect to remember is your execution strategy mentioning your marketing, strategic partnership and alliances, and operations plans, which brings us to the next crucial step.
In the first point, we mentioned something about CPAs and tax. This is where you need to set up strategies on how you will manage inventory. Remember, taxes on dispensaries are stringent, and the government will be watching closely to see if you comply. Ensure you use a point of sale software to help you streamline your operations, capture and increase your revenues, and help you calculate your tax returns by knowing the actual sales.
For instance, a system such as Service Ganja is user friendly, gives you the liberty to work online and offline, and doesn't require any installation costs. You also don't need any specific hardware to use it. Service Ganja also helps with compliance and ID verification, and they have an excellent customer loyalty plan. Customer service is available all year round to answer your questions and help with information or assistance.
Finally, let's face it. Successful dispensaries have optimal use for their space and make their stores look as beautiful as a marijuana store would. That's not all. The floor plan supports workflow and display of items where customers can easily see and pick them. This may look trivial, but you’ll be surprised to learn that 53% of customers said they left a cannabis dispensary because of disorganization. Making it easier for customers to find products, buy them, and exit should be a priority.
Now that you are ready to start your store, ensure you add a little personality to your brand, train your staff on handling and speaking to customers. Remember, 70% of shoppers say they spend most in stores that have excellent customer service.