5 Challenges Legal Marijuana Presents for California Dispensaries

There were real reasons to be excited about recreational marijuana in California. Still, dispensaries faced several major challenges as the market shifted to adult-use. Most of these hurdles came from tighter regulations, and many operators had to make expensive changes before the new laws took effect.

In this article, we’ll walk through the biggest problems cannabis retailers dealt with during that transition. We’ll also cover a few ways to solve them, since the same lessons still apply to new operators today.

Licensing and Permits

Applying for a commercial cannabis business license requires a lot of documentation about your business, owners, and operational procedures. Compiling all of it isn’t easy, especially while running a busy dispensary. On top of that, the cost of a business license and city permit, including application fees, makes this a real challenge.

To streamline things, California built an online application portal for cannabis retailers. That portal helps with the application itself. However, securing financial backing for the fees has remained difficult. As a result, many businesses turn to angel investors to help cover the startup costs of going legal.

Increasing Security

New regulations require stronger security at commercial cannabis retailers. For years, California dispensaries struggled because major security firms refused to serve them, fearing the stigma. Moreover, the guidelines cover not just storefronts but also the transportation of product and cash.

Fortunately, specialized security providers for the cannabis industry have grown to meet this demand. Companies such as Cannaguard and Omni Security work specifically with cannabis dispensaries. They provide both surveillance and transportation solutions at an affordable rate.

Financial Institutions

Banking has always been an issue for California dispensaries, because the federal government still classifies marijuana as a Schedule I drug. As a result, cannabis retailers remain largely cash businesses, and paying expenses out of that cash is a real challenge.

Many dispensaries use armored trucks to move cash to a Federal Reserve bank, which is then deposited into local credit unions. Setting up these accounts is another big expense. In fact, opening costs can range from $10,000 to $50,000 for financial audits and background checks. In addition, some California dispensaries pay recurring monthly fees of up to $7,500 for due diligence. For that reason, some operators historically set up separate LLCs to open accounts at FDIC-insured banks.

Dispensary Renovations

State and city regulations also set specifications for your dispensary floor plan. Some dispensaries already meet these mandates, but many do not. In those cases, renovating the storefront interior may be the only way to satisfy the rules. Unfortunately, that can mean closing during construction, which costs thousands in lost sales plus pricey building permits.

Beyond interior work, many dispensaries must be wheelchair accessible. Installing ramps and adding accessible parking spaces lets disabled veterans and customers enter your establishment with ease.

Point-of-Sale System

Finally, every California dispensary should consider updating its point-of-sale system. The challenge here isn’t installing new stations. Instead, it’s choosing software that fits your cannabis retailer.

A dispensary POS software that creates customer profiles, tracks inventory, sends marketing campaigns, reports compliance, and manages staff is essential for adult-use sales. IndicaOnline is one of the most advanced marijuana POS systems on the market, and it meets state regulatory requirements. Sign up today to prepare your marijuana business for the demands of California’s regulated cannabis market.