Home » Medical Marijuana Blog » Concentrates » Legalization Is Paving the Way to a Greener Society: 5 Things You Need to Know Before Opening a Dispensary

Legalization Is Paving the Way to a Greener Society: 5 Things You Need to Know Before Opening a Dispensary

A few decades ago, you couldn’t open a cannabis dispensary in any state without facing the wrath of the state laws. This is now a thing of the past in most states, thanks to the legalization of the sale and use of cannabis in these states.

There are a lot of opportunities that have been brought by this legalization. You could be interested in opening a dispensary to take advantage of such opportunities but are not sure where to begin.

Perhaps some few essential tips are all you need. Good news is, we’ve prepared a list of everything you’ll need to know before opening a dispensary. Please read on.

The Business Plan

A business plan is very important before starting any business. It’s a roadmap to your success in the business that provides a bigger clarity on all aspects of your business. It’s a sign of seriousness in the business and it separates you from other businesses in the industry.

These are the essential factors that a good business plan puts into consideration.

Your Dispensary Budget

You’ll need a clear and concise budget. It’s important to know the different costs you’ll have to pay for the efficient running of your dispensary. Among the costs to be considered in the business includes the cost of the product, licensing, workers’ salary, rent, security, and transportation and storage of your product.

The Capital

The budget will give you a rough estimate of how much you’ll need to open and run the dispensary. You’ll now need to consider how you’re going to access capital. The business requires a good amount of money to open. There is much competition and regulations put in place are a bit strict and you may need about half a million. You’ll need to source funds from your personal finance, family, friends, and angel investors since you’ll hardly get a bank loan for opening a dispensary.

Competition in the Industry

There’s a great challenge in this business both from the licensed operators and unlicensed operators. These unlicensed operators are the biggest challenge in the industry since they can hardly be convicted. The dispensary advertisements will guide you on the unlicensed operators in the area. Check to see also if the unlicensed operators are allowed to operate freely or there are plans put in place by the law enforcement to get rid of them.

Market Research

The plan helps you to identify your potential customers. You’ll need to research your demographic and psychographic. Conducting market research will be important to determine the marketing and pricing strategies you’ll use for your dispensary. Digital marketing accounts that encourage customers to give useful reviews can be very effective tools to apply in marketing your dispensary. For instance, you may use social media accounts with proper SEO strategies that will keep your website updated. You can learn more about the strategies and how they can benefit your business from Foottraffik.

The Compliant Property

When it comes to operating a dispensary, finding an efficient compliant property is vital. There are a lot of considerations to make before arriving at a decision. Normally, for the property to be compliant, it has to be located at least 1000 feet from a worship center, 1000 feet from a residential area, 1000 feet from a school, and 1000 feet from another compliant property.

However, the environment of the legal marijuana industry is ever-changing. This means that property deemed compliant now might not be, say, in five years to come. Therefore, you should ensure to be keen when accessing the property. Choose a property that will be consistent with the new laws that took effect recently. Of course, you won’t want to open a dispensary that might be shut down for running afoul of the new laws.

Perhaps you can get a map showing all the compliant properties in your state to help you identify one of the properties to use. This will save the hassle of having to move from one place to another doing the research of whether the property can be compliant or not. A compliant property in one state may not be in another state. Therefore, you’ll need to inquire to know what is deemed as a compliant property in your state.

You might also find a compliant property but the landlord or the members of that community may be hesitant to allow you to open a dispensary in the property. You should communicate with the landlord and inform them about your plans of opening a dispensary in the place then let them tell you what they think about the business. You should also ask the landlord if they have been under any pressure from law enforcement concerning renting their property for those intending to open a dispensary.

Do some research on areas where the better part of a community supported the proposals on marijuana laws. This will help you avoid the areas where the members are against the idea of having marijuana business in their areas. You may opt to access the ballot proposals on the laws for your area of interest and use the information to make your decision.

The place you’ll choose for your business will determine if the business will be successful in terms of reaching a good number of potential customers. You won’t just decide to rent a place just because you liked the place or you can afford the rent. You need a place where you can reach your target market conveniently. This means that you need to first identify your target market, who will then guide you in finding the best location for your dispensary.

Business Licensing

Unlike other businesses where obtaining a license for opening the business is cheap and easy, it’s not that simple when it comes to a legal marijuana dispensary. The legal expenses involved in obtaining the license will cost you a good amount of money – perhaps a few thousands of dollars. The cost and regulations for obtaining the license differ from state to state. Each state also has a unique set of laws and regulations that need to be followed by every seller.

Compliance is also time-consuming and you’ll need to be prepared with a lot of resources for the process. You’ll need to do some research to know exactly what you’ll need to keep up with the compliance in your state to avoid being kicked out during the process. Don’t forget to check your local city and county laws. You can join groups such as the National Cannabis Industry Association (NCIA) to stay updated on the legal changes and requirements.

Obtaining Your Product

You’ll need a good and legal product for your dispensary in order to be successful and to avoid any problems with law enforcement in your state. How are you going to obtain your product? Will you be purchasing it or will you grow your own marijuana? In some states, it’s mandatory for every dispensary to grow their own marijuana. Therefore, you should inquire to find out if growing the product is mandatory in your state.

However, it’s always advantageous to have your own cultivation facility even when it’s not mandatory. You may opt to start by opening a retail facility then, with time, start your own cultivation facility. There are different forms of legal marijuana that you can sell in your dispensary. Apart from the typical form, you can sell oils, edibles, concentrates, or dabs depending on the available demand. You’re after enhancing your sales force and this is what should guide you in the forms you’ll be selling.

Your Business Type

The decision of business ownership is very important when opening any business. And a cannabis business is no different. You’ll need to make a decision of whether to own the dispensary yourself, form a partnership or to form a separate entity. Each has their advantages and disadvantages.

If you’ll decide to operate as a sole proprietor or as a partnership, you’ll be able to enjoy the benefit of low cost of operation. However, you’ll be liable for the debts, obligations, and liabilities of the dispensary as the owner.

On the other hand, a separate entity like a corporation or LLC will be liable for the debts and not the LLC members and shareholders of the corporation. To form any of these, you’ll need to file a formation document with the business entity filing office of your state and pay a fee. The formed LLC or corporation will then have to appoint and keep a registered office and agent, pay a franchise tax, and file an information report. Should the LLC or corporation be interested in doing business in another state, it will have to register and obtain a certificate f authority in that particular state.

You’ll need to decide on whether you’ll want pass-through income taxation such as an S corporation or to have a separate taxable entity such as a C corporation.


Legalization of marijuana in most US states has opened doors for numerous opportunities in the industry. Starting your own dispensary can be the best way to enjoying all the benefits that come with the legalization. However, there are a lot of considerations that you need to make prior to making a decision of opening a dispensary. Some of these considerations have been explained in detail above to help you make informed decisions concerning the business. You can also look for other relevant themed blogs to learn more about opening a new dispensary.

Check Also

Is Weed Legal in California?

Did you know that nearly 50 million Americans claim to use marijuana? Although many people …

Medical Marijuana Blog

Accessibility Tools