cannabis dispensary franchise

12 min read

Is A Marijuana Dispensary Franchise Right For You?

October 14, 2021


Everyone knows about famous franchise chains, such as BurgerKing, Macdonald’s, Interim Healthcare, and Ace Hardware. They all have one thing in common – they have grown over the years to become household names constantly on the lips of everyone. 

Buying a franchise is a popular marketing strategy many business owners opt for when it comes to business expansion. However, if you want to franchise cannabis, be rest assured that your plans are not futile. Most entrepreneurs venture into the marijuana business as an experiment without weighing the risks and trying to understand the laws regulating it. Only taking into account the main regulations and difficulties you may face can help you successfully germinate your ideas into a full-blown household name franchise. But first things first.

What Is Franchising

In a franchising arrangement, one party, known as the franchiser, licenses or grants some rights and interest to the other party, the franchisee. This arrangement creates a contractual agreement between both parties. The franchisee has the authority to market, sell the franchise’s products, goods, and sometimes services using the brand name and trademark, and even learn the trade secrets of the franchise. The franchisee furnishes consideration in return which can be payment of a one-time fee or commission or some agreement of a revenue share with the franchiser. A franchise, in its turn, is a joint venture that is beneficial for both parties. The franchisee may market its products by operating as a branch of the parent company or selling these products under its business enterprise. 

marijuana dispensary, cannabis business, franchising, pros and cons

To put it simply, the three essentials of creating a franchise agreement include association with the franchiser’s trademark or brand name, payment of a fee, and substantial control or assistance from the franchiser. 

What Makes A Cannabis Franchise Different From Other Industries?

In fact, the same business model used for operating franchises in other industries is now being transported into the cannabis industry. At the same time, there are some differences you need to keep in mind.

First, cannabis businesses are restrained from shipping products across state lines since cannabis is still illegal at the federal level. Hence, all cannabis products must be grown and sold in-state. 

marijuana dispensary, cannabis business, franchising, pros and cons

Second, a lot of money comes in and out of the cannabis business. The expenses and profits require safekeeping, and ordinarily, any company will resort to banks and other financial institutions for this. However, a marijuana store franchise cannot. This federal illegality is perhaps the most significant challenge any marijuana franchise can face. Marijuana is still illegal on the federal level. Therefore, any financial institution or bank that handles money connected with the marijuana business can face charges for money laundering. Due to this fact, most banks would rather not furnish financial services to companies of this nature. Hence, United States cannabis franchises are forced to conduct their daily transactions without protecting electronic transactions accords. They have to operate without bank accounts and credit card payments and instead deal in cash or other alternatives like cryptocurrency or cash-less technology systems.  

Last but not least. There is also the profitability aspect that differentiates a cannabis business franchise from others. The bitter truth is that a marijuana franchise might not be as profitable as other traditional franchises. As a potential franchise owner, keep it at the back of your mind that cannabis is still illegal in many states, unlike hamburgers or pizza. This element of illegality should guide you in making conscious business-related decisions. 

Should I Franchise A Marijuana Business?

Now to the million-dollar question. Is it advisable to expand your marijuana business by franchising it? 

The U.S. franchise industry is currently valued at $451 billion. It is not surprising that entrepreneurs of the cannabis world are attracted to this opportunity. The massive spurt of growth in the marijuana industry has led businesses to consider this well-known business expansion technique. Even though there is still great prejudice against operating a marijuana business, many risk-tolerant business owners, as well as investors who understand the pros and cons of a cannabis business franchise, are bold enough to take a step further and start operating or investing in a marijuana-related business.

If you already operate a dispensary, the first step towards franchising your marijuana business is to refine your brand and file a trademark for it. In no time, you can become one of the best cannabis franchises. 

Pros Of Franchising A Cannabis Dispensary for Franchisers

Some of the significant merits associated with operating or investing in a cannabis dispensary franchise are:

Smooth Start

Franchising allows entrepreneurs to enter the cannabis market without starting from scratch and dealing with the challenges of establishing an independent dispensary. They can capitalize on an already established marijuana dispensary, making a profit by using the brand’s name and marketing the products or services they provide. 

Business Expansion

Every business craves expansion in size and customer base, and franchising creates an avenue for this. You can expand your existing business model by partnering with individuals who are ready to invest. Franchising grants you access to a broader customer base. You can introduce these customers to your products as the industry’s best and safest cannabis products.  

Training and customer support simplification

You spare yourself the stress of hiring and training employees in the ethics and techniques of the cannabis business when you operate a franchise. Training staff becomes the sole responsibility of the franchisee. You do not have to expend the cost or time on training staff members. Using modern POS systems like IndicaOnline also reduces the risk of making a mistake by your employees. These systems are designed specifically for the cannabis industry to be compliant with state laws and regulations. 

Pros Of Franchising A Cannabis Dispensary for Franchisees

marijuana dispensary, cannabis business, franchising, pros and cons

Performance Optimization

Not only does franchising rebrand your dispensary, but it also refines it for optimal performance. It allows a business owner to pay more attention to discrepancies and focus on the business’s strengths. You can concentrate on marijuana products that sell and remove the ones that customers don’t fancy. 

Risk minimization

While every business has risks involved, partnering with a brand that is already recognized and has a working business playbook and built-in support lowers this risk a lot compared to establishing a new business. 

Cons Of Franchising A Cannabis Dispensary for Franchisees

While the undeniable merits of franchising a cannabis dispensary have been noted, balancing the scale by stating some demerits is necessary. 

Legal Risks

The extent of the risks associated with a cannabis franchise is being emphasized for valid reasons. Apart from the legal risks every cannabis dispensary is prone to when it comes to compliance with regulations on a federal level, there are also issues arising from federal illegality. Since most dispensaries are compelled to deal strictly in cash or other alternatives, this unsurprisingly poses several operational problems in accounting, money security, payroll, and other financial activities. While entrepreneurs experience a few functional and economic uncertainties, only creative and flexible individuals can reap the most in this ever-evolving industry. 

To manage your payments, you can use cashless ATMs integrated with the IndicaOnline POS system. This solution is tailored for cannabis retail because and it solves the problem with cash-only payments for dispensaries. 

More Corporate System

With expansion comes rebranding and consolidating the operation of the stores. Strict guidelines are also established and enforced by the franchiser. So, although you are your own boss, you have to adhere to the operational rules laid down by the franchiser. The design and layout of the dispensary, the products offered, and the prices charged are all likely to change. 

Lack of Creative License

Although you get to capitalize on the already established business model of the franchise, the brand, and the products or services they render, you lose your creative license as a dispensary franchise. You no longer have the privilege to implement new ideas regarding sales tactics, marketing products, or personalizing your business without the franchiser’s approval. This lack of control can prove difficult for cannabis business owners who enjoy the freedom of making all the decisions related to their business.

How Am I At Cost Control?

Note that cannabis businesses have a high tax burden, and they must pay this federal tax on their gross income. The 280E tax law prevents dispensaries from deducting their operational expenses from their gross income. Since they get fewer deductions, they pay more in taxes and make fewer profits than other franchises. Now, include the monthly royalty remitted to the headquarters, payroll, and other miscellaneous expenses. The costs of running a franchise could usurp the profit if the owner is not careful. To consolidate this profitability issue, you need to learn to control costs in your cannabis franchise. Carefully controlling costs will help you stay in business. You can achieve this by maintaining a high-profit margin to consolidate all the amounts lost to tax payments.  

Current Marijuana Dispensary Franchise Options

The legal cannabis industry is just emerging, but we are just a few years from having the ‘Starbucks’ or ‘BurgerKing’ of cannabis. Nevertheless, with the numerous scientifically proven benefits of cannabis recently coming to light, combined with the legalization of medical marijuana in 37 states of the United States, the cannabis industry has experienced considerable growth over the last few years. States that are yet to get in line with legalization also have entrepreneurs ready to jump into the industry at any slightest indication of legalization. It does not matter whatever aspect of cannabis has caught your interest. 

For one, in Medical Cannabis Franchise, the mental, physical, and emotional benefits of marijuana have led to it becoming a pharmaceutical miracle used for medicinal and recreational purposes in the United States and around the globe. The health benefits that cannabis offers are hard to deny, so if you decide to own a medical cannabis franchise, it will most definitely flourish with the right strategies and staff members. 

Can I Fund This Investment?

As a potential cannabis franchise owner, you should be prepared to make a significant investment in your business, and you can’t do this without access to enough capital. Securing a store, licensing, hiring competent employees, and implementing marketing strategies do not come cheap. The cost of opening your medical dispensary, of course, differs from that of the next person as there are many variables you need to put into consideration when calculating your capital requirement. 

You might find it challenging to secure an investment or loan. The trouble with securing investment is incidental to launching a business in a sector currently operating in the grey area of the law. Yes, it can be difficult but not utterly impossible for serious potential cannabis entrepreneurs to secure a legitimate investment. While a franchise in another industry can be funded with a small business loan or other investment opportunities, a cannabis franchise might not be so lucky due to the federal illegality of its products. 

Franchise Opportunities

The fascinating thing about franchising is, it opens the door for people who would ordinarily be unable to find their way into any industry and, in this instance, the cannabis industry. If you are searching for a cannabis franchise opportunity or looking to buy a cannabis franchise, there are a few legitimate opportunities out there. Different companies are hoping to create a consistent customer experience across states by establishing franchise chains, and they are always ready to partner with cannabis enthusiasts. These consist of notable cannabis franchises, which are some of the best cannabis franchises in the USA. Let’s take a closer look at them.

ONE Cannabis 

marijuana dispensary, cannabis business, franchising, pros and cons

One Cannabis is a veteran in the industry, one of the first marijuana franchises to introduce the franchise business strategy to cannabis. Headquartered in Denver, Colorado, One Cannabis is an integrated, multi-state cannabis operator dedicated to defining the modern retail cannabis experience by creating a conducive environment and quality products for customers. They strive to ease the market entry of entrepreneurs, thereby making cannabis entrepreneurship attainable to a broader group of consumers. 

Miracle Leaf

marijuana dispensary, cannabis business, franchising, pros and cons

Miracle Leaf is a medical cannabis health center based in Florida. They offer franchise opportunities in some cannabis-approved states in the United States and Canada. 

Dutch Love

marijuana dispensary, cannabis business, franchising, pros and cons

Perks that come with being a Dutch Love cannabis franchise include lease or property acquisition, licensing, banking, staffing, etc. They provide substantial support to their franchisees by offering them services that enable the latter to focus on its day-to-day operations. Rest assured that a team of skilled professionals is watching their backs. 

Green Man Cannabis

marijuana dispensary, cannabis business, franchising, pros and cons

An award-winning franchise under the ONE cannabis brand, Green Man company hopes to launch 50 new franchises through a partnership with established, independent cannabis dispensary owners. Business owners who take advantage of this opportunity will receive guidance and support from this leading cognoscente of the cannabis industry. Green Man already has a successful business model that has led to hundreds of loyal business relationships.

Having a familiar name associated with your brand is enough to attract customers to your cannabis store. To know if the companies you wish to partner with are legally qualified to offer franchises, you need to check their website for franchise offer details. 


Although it is a spectacular business opportunity, operating a cannabis franchise is not for everyone. It requires the right mix of risk management, creativity, training, professional legal support, and product quality to make your cannabis franchise dreams more than just wishful thinking. Looking up ‘Cannabis biz franchise reviews’ will tell you that opening a dispensary on your own is hard, and franchising makes it more accessible. You need to understand these pluses and minuses. Then carefully weigh them to determine if the pros outweigh the cons for you or if it does not. The results of your analysis decide whether you should venture into a marijuana dispensary franchise or not. 

It is noteworthy to state that the land space of the cannabis industry requires a specific kind of mindset when faced with challenges or risks. Only those with a mature and successful operation after considering risks can leverage this opportunity. In determining if a cannabis franchise is right for you, you need to conduct the requisite investigation and do your due diligence regarding the business entrepreneurs you are in talks with. In no time, your enterprise could identify as one of the best United States cannabis franchises.