Follow along this step by step guide for the 7 best ways to start a cannabis dispensary in 2021. Have you ever kicked yourself for missing an opportunity that was right in front of your face? Maybe you’ve ignored a promising trend, procrastinated on a business prospect, or missed the boat altogether. It happens to the best of us, and you are not alone.
Cannabis is in high demand, the industry is still fledgling, and the outlook looks as bright as the end of a freshly lit spliff. The cannabis market value is projected to triple by 2025 to over $30 billion. Add CBD to the equation, and this number is likely to be a lot higher. All of this bodes well for dipping your toes into the green sea and claiming your piece of the pot pie.
If you’re an entrepreneur looking to enter into the cannabis market with your dispensary, here’s a look at the essential steps you need to take to get started in 2021.
The cornerstone of any great business is its business plan. Without one, your chances of succeeding are slim to none. Your business plan is your road map and is an essential tool to know where you want to go and how you want to get there. Do you want to be a small ‘mom and pop’ shop? Or do you want to strive to be a company that has grown into one of the world’s largest privately held CBD companies with over 100 employees? Your business plan will be something you often refer to monitor your progress and measure your success. A good business plan will include:
All business plans are unique, and with the cannabis industry, you’ll also want to address things like sourcing your product, environmental factors, and regional laws.
First things first, you’ll need to register your business name with your local government and choose an entity type. Your entity type will have an effect on how it is taxed, asset transfers, ownership interests, and liability. Dispensaries typically have four options (Sole Proprietorship, Partnership, LLC, Corporation), and you’ll need to do some research and decide what is best for your business.
Next, you’ll want to acquire all the necessary permits. As expected, there is a litany of laws involved in the production and sales of cannabis, and businesses must abide by these laws and attain all necessary permits. You can find an extensive list here.
When it comes to general licensing requirements, it can vary from state to state. Since some states require an open application time to offer licenses, other states can be a bit restrictive. The government subjects permits and registration for tax, public safety, and other specific reasons. For any dispensary to operate legally, it is vital to submit your business formation, tax ID number, general business license, DBA filing (doing business As), sales tax permit, and other permits, deepening on your state authorization.
Opening a dispensary can be a pricey venture. If you already have the funds, way to go. You’re ahead of the game. But for most people, their business is going to require funding. This is where it can get a little tricky in the murky waters of state and federal laws. Because marijuana is still illegal under federal law in the United States, big banks are usually not an option.
If you plan on opening in a state where marijuana is legal, you might be able to obtain a loan from a smaller bank or institution. But if that’s not an option, you’ll likely need to deal with an investment firm or an angel investor.
So, you’ve decided to open a dispensary. Now you need to determine what products you’re going to sell. You’ll likely want to sell THC, CBD, and hybrid products in various ways for consumption. Gone are the days when marijuana was just a plant to be smoked. Now the options are seemingly endless with CBD gummies, oils, topicals, cookies, chocolates, and more.
Next, you’ll want to find your supplier. It’s imperative to partner with a reliable and licensed vendor that you trust and can grow with. This isn’t a process to be rushed and will require a significant amount of research and vetting to narrow down your options. A good place to start would be researching online on finding and working with cannabis vendors.
Location, location, location. We all know that location can make or break a business. Like with any retail business, you're going to want to look at factors like foot traffic, road traffic, demographics, competition, and available parking.
Read a cannabis dispensary guide to learn even more things to think about regarding the law. It's paramount to check your state's zoning laws to ensure you're in the clear before you sign a lease. Some states can have extremely tight restrictions that can make finding a desirable location a challenge.
Now that you've found your physical location, it's time to start building your business's online presence and marketing. A nice, clean website is essential for any business and particularly true for dispensaries.
Having a well-organized site with a full menu of products and descriptions will go a long way in attracting customers, especially customers that know little or nothing about marijuana. This is your chance to educate them and hook them as a customer.
Depending on how savvy your marketing skills are, it might be a good idea to outsource a professional to help you with your online presence with things like:
There are sites like Fiverr and Upwork where you can likely find someone to do this at an affordable rate.
There's nothing worse than walking into a cannabis dispensary to be greeted by someone that knows nothing about the products they are selling. A knowledgeable staff is especially essential in the marijuana business because of how young the industry is. There will be curious customers who have never tried cannabis before looking to get educated, so having an enthusiastic and well-informed staff is of the utmost importance.
There's no denying that the cannabis industry is here to stay, and opening up shop now could be an incredible opportunity for savvy entrepreneurs.
But it's important to do your homework and know what you're getting into before you dive. It's undoubtedly exciting to want to be part of a booming industry in the early days. Still, there can also be many pitfalls along the way – especially with all the regulatory challenges in an industry that isn't yet federally legal.
Spending ample time on research and reading cannabis dispensary guide and the industry's ins and outs will be essential in helping you make your decision. There will be a lot more to learn along the way, but these steps should provide a good starting point for getting the ball rolling and have you on your way to opening a dispensary in 2021.