While there are certainly reasons to be excited about the approaching legalization of recreational marijuana, California dispensaries are faced with a few major challenges ahead of the new year. Many of these challenges are due to the increased regulations and dispensaries are rushing to make expensive changes before the new laws take effect.
In this article, we’ll discuss some of problems cannabis retailers are dealing with and a few ways to remedy these obstacles.
Applying for a commercial cannabis business license requires a lot of documentation regarding your business, owners, and operational procedures. Compiling all of this information isn’t easy especially when running a busy dispensary. Add the hefty cost of a business license/city permit including application fees and it’s easy to see why this is a challenge.
This past week, the BCC launched their online application portal for cannabis retailers. This will certainly be helpful when applying for a business license but securing financial backing for the impending fees has been difficult. Many businesses have sought out angel investors who can assist in paying the startup costs associated with the recreational transition.
New regulations require increased security measures at commercial cannabis retailers. California dispensaries have dealt with multiple major security companies who are unwilling to offer services in fear of the associated stigma. Meeting the new security guidelines is not only for storefronts but for the transportation of product and currency.
Fortunately, specialized security providers for the cannabis industry have been growing to meet this demand. Companies such as Cannaguard and Omni Security soley work for medical marijuana dispensaries. The provide both surveillance and transportations solutions at an affordable rate.
Banking has always been an issue for California dispensaries since the federal government considers marijuana to be a Schedule I drug. Cannabis retailers are predominantly cash businesses and using revenue to pay expenses is a real challenge.
Many marijuana dispensaries use armored trucks to take their cash to a federal reserve banks which is then deposited into local credit unions. Setting up these accounts is another big expenditure as opening cost can range anywhere from $10,000 to $50,000 for financial audits and criminal background checks. Additionally California dispensaries are charged recurring monthly fees up to $7500 for due diligence. It’s for this very reason many dispensaries setup fictitious LLC companies to open an account in FDIC insured banks.
State and city regulations are also requiring certain specifications when it comes to your dispensary floor plan. While some dispensaries are already design to meet these mandates, many are not. Renovating the storefront interior may be the only way to satisfy the state regulations and may require closing the business during renovation. This will cause cannabis retailers to lose thousands of sales, not to mention pricey building permits.
In addition to interior renovations, many dispensaries will now be required to be handicap accessible. Installing ramps and creating handicap parking spaces will allow disabled veterans and customers to enter your establishment with ease.
All California dispensaries should consider updating their point-of-sale system. The challenge here is not installing new marijuana POS stations, but choosing which software fits the needs of you cannabis retailer. Utilizing a dispensary POS software capable of creating customer profiles, tracking inventory, sending marketing campaigns, reporting compliance, and managing staff is essential when converting to recreational marijuana sales.
IndicaOnline is by far the most advanced marijuana POS system on the market and meets all state regulation requirements. To help California dispensaries save money when choosing a new POS software, we’re offering a FREE all-in-one POS unit when retailers sign-up for a six month pro plan. Sign-up today to prepare your marijuana business for the transition from medical marijuana to adult-use cannabis.