Any entrepreneur looking to get onto something big should look at the opportunities that the cannabis industry offers. Concrete extraction technicians, researchers, marijuana cultivators, marketers, marijuana processors, cannabis branding, and developers will all have a place in the industry. The medical marijuana industry is expected to reach an estimated worth of at least $148 billion by 2026. Now is the perfect time to open up a dispensary!
But before you do, make sure you have everything in order.
Here are five things you must have before opening a medical marijuana dispensary.
A Business Plan
Sure, medical marijuana dispensaries aren’t viewed as a traditional business. But when push comes to shove, opening a dispensary isn’t that different from opening an antique shop or restaurant.
You’ll need to plan to succeed.
Before you even begin shopping for a location, make sure you have a business plan that you can show investors. It needs to include your plans for funding, info on your demographic, milestones and deadlines, and your projected growth.
The more thorough your business plan is (ie, the more data you have) the easier it’ll be to fund your dispensary.
You do not have to open your own cannabis dispensary to get into the market. There are a number of ways that your skills can be used to develop a business. You could look ay business management, cultivation, design, marketing, financial services, activism, security, computer programming, and content creation. If you are able to do it then you can make a business out of it in this market.
Your business plan lays the groundwork for your future success. By allowing you to identify potential obstacles and to come up with ways to overcome them, you are far less likely to run into trouble if you have a business plan in place. Your business plan should address key considerations such as funding, marketing, competition, legal compliance, and other essential components of running your business.
Fund your Business
As with starting any business, you will need to have the funding to start your operation. You may already have the funding or you can seek a business loan. Due to cannabis businesses being considered high risk, banks will often not loan money. However, you can seek independent funding that offers business loans regardless of risk. They can fund all types of endeavors from grow rooms, dispensaries, marijuana kitchens, marijuana websites, retail stores, and more with dispensary loans, equipment leases, commercial real estate, and equity funding.
Be Active In The Community
One of the best parts of the cannabis market is the community that drives it and you need to use this to your advantage. Join MeetUp groups, participate in rallies, and volunteer in the community to get your name known. Websites like herbceo.com can help Cannabis entrepreneurs network and help one another grow each other’s businesses.
Networking will help your business visibility and will help you develop the connections to the community that you need to be successful.
The community also offers start-up businesses the opportunity to become a part of a larger collective. There are groups like Canopy Boulder and Women Grow which have specific missions that help cannabis businesses start. Women Grow is a network for female entrepreneurs and mentors, while Canopy Boulder has investors that are looking to sponsor the next big company, as long as they do not work directly with cannabis. The methods will also help ensure that your company prospers.
You will want to find other businesses within the industry to partner with. For instance, dispensaries usually have to work with wholesalers in order to obtain inventory that they can then sell to the public.
You also should put a priority upon seeking guidance from seasoned professionals who are experienced in retail sales techniques and customer service communications. Specially essential to the success of your new cannabis business will be how well your front-line employees perform in retail sales and face-to-face customer service exchanges. As a new cannabis business, you only get one chance to make a strong first impression within your local area.
Research Your Competitors
If you want to have an advantage then you need to keep close tabs on your competitors. This will help you target your audience and find new customers. You should also look at the services, products and prices that your competitors have to determine what your business model should be.
There are a few ways that you can track your competitors including:
- Online searches
- Engagement on social media
- Inquiries from customers
- Online surveys
Choose Where you Want to Set Up Shop
When you have a marijuana-related business, you can’t just set up shop anywhere. Instead, there are laws regarding where you can do business. Familiarize yourself with these laws so that you can choose the right location for your company.
Choose a Structure for your Business
Whether you decide to run your business as a sole proprietorship, a partnership, or a corporation, you will need to file the appropriate paperwork and get your business structure in place before you open your doors.
Market your company.
If you want to get customers, you need to spread the word about your business. Look into advertising opportunities such as local newspapers or online cannabis directories. Another good way to spread the word about your business is by going to industry-related trade shows.
Getting a business up and running in the cannabis industry is similar in many ways to starting any other type of business. The only difference is that there are additional rules and regulations that you have to comply with. Take the time to educate yourself about the requirements for your business so that you can get your company up and running the right way. Don’t be afraid to seek outside help if you need it
It makes sense that you’d need certain licenses like a business permit to open a dispensary. But that’s only the tip of the iceberg.
Since marijuana regulation is such a new topic, store owners can expect to jump through many hoops to secure proper licensing like making sure their store is a certain distance away from schools.
Aside from a basic business permit, you’ll need to look into your state’s individual requirements for obtaining permits.
Contact your area’s branch of the U.S. Small Business Administration to see what you’ll need to open shop.
Have Enough Product
The great news is that there’s never been a better time to get into the industry. However, that popularity can come back to bite you if you aren’t careful.
Before opening, make sure you have enough product. And not just for the first few days of operation.
You’ll need a constant stream of new strains to make sure customers leave your dispensary satisfied time after time.
Credit Card Processing and Banking
While the bulk of your customers will pay for their purchases with either cash or credit, some people will attempt to pay by using their insurance.
Though this is far less common than your standard medical marijuana transaction, it’s important that you’re still prepared to accept their business.
As such, it’s wise to invest in medical billing software so you can easily manage your reputations with insurance companies.
The age of cannabis dispensaries has made it difficult for dispensaries to find trustworthy banking and credit card processing. Banks have not been fond of supporting dispensaries in the fear that funds may get frozen by DEA or the feds. As legalization becomes more widespread, the options for banking and credit card processing are becoming more common and accepted. Find a legitimate credit card processor or bank that can support your business.
Video cameras are a fine enough start, but you can’t keep your eyes on the monitor at all times. You may find yourself in situations where you have to assist customers while others shop.
Since you can’t be in all places at all times, do the next best thing and hire security personnel or two.
Some states require ID checks before purchases, so this is also a great way to expedite the purchasing process.
If you have these things in order, you should be good to go! Opening a medical marijuana dispensary does require a ton of time and effort, and you might expect some pushback from certain members of the community.
Just remember to treat it like any other business and you’re golden! For more info on opening up your dream business, make sure to check out our blog.