It’s a new era, and cannabis is king.
Legal marijuana is projected to reach $73.6 billion in sales by the year 2027. Now almost Everyone is looking to corner their fair share of the market. Of course, that doesn’t mean everyone will find success in this new industry despite its ongoing and powerful growth spurt.
If you have green dreams of your own, you’re probably wondering how to open a marijuana dispensary—and keep it open. If this sounds right, stay tuned. We’re about to divulge to you how opening a marijuana dispensary is done.
How to Open a Marijuana Dispensary Successfully
Opening a marijuana dispensary is similar to opening any other type of business. Except, there are state and federal laws to consider. There’s also the stigma attached to the happy little plant, and that stigma mixed with the various laws makes it challenging to get regular business loans and so on.
Plus, the startup costs are high. Exponentially high, ranging anywhere from $250,000 to over $750,000. When all is said and done, you could end up spending a cool two million just to get your dispensary doors open.
It’s safe to say that opening a marijuana dispensary is no easy feat—but it can be done, and it can be a wonderful success. The laws are everchanging as we continue to give medical and recreational marijuana and hemp CBD products a chance. Every day it seems as if they change more and more in our favor.
Now, here’s what you need to do to ensure that your future marijuana dispensary is a success:
Make Sure You Have All the Right Paperwork
There are many laws regarding the growth, production, sale, and activity of cannabis businesses. It’s non-negotiable that you adhere to all federal, state, and local laws. That means acquiring the following paperwork before you do anything else:
- Seller’s permit
- Cannabis-specific seller’s license
- Your business plan
- General insurance (to protect your individuals and your physical business)
- Product insurance (to protect your product, equipment, etc.)
- Medicinal insurance (to protect against loss of product in-store or during transport)
You’ll also need to provide business paperwork such as your dispensary floorplan, inventory procedures, a Labor and Peace agreement, transportation process, security protocols, and so on to get your business license. All of this documentation will be part of the business plan you present to potential investors, your legal team, and the appropriate government officials.
Find a Prime Location
With marijuana dispensaries, it’s all about location—just not in the way you may think. Sure, you want a prime spot that garners a lot of foot traffic but depending on your state and local laws, that prime spot may not be viable. For example, you may find the perfect storefront on a busy street, but it’s within the vicinity of a school, church, or community center—and that’s an unfortunate no-no.
Not only do you need to find a prime spot that meets all the local criteria, but you also want to set up shop in the midst of a supportive community. If your potential location comes with an anti-cannabis community, it could work against you. So, make sure you can win over the locals.
Hire the Right Team
From growing to transport to retail sales, your team will be the backbone of your operation. Not only do you need to ensure that the people you higher are attentive, knowledgeable about the product and how to sell it, but you also need to make sure you can trust them to do their jobs responsibly and remain compliant.
One weak link in your chain, and you could lose your license.
Assembling the right team will ensure that your business thrives and remains on the right side of the law.
Assemble a Legal Team
You don’t need to have an entire flock of lawyers at your disposal. That would be incredibly expensive. However, you want to find a lawyer specializing in the cannabis industry to protect your business investment and keep you compliant.
It’s also necessary to hire a certified public accountant (CPA) because you’ll be operating a cash-rich business. Most banking services are limited to what they can do for a cannabis company considering the laws, so having a CPA you can trust to handle your cash flow and taxes is key.
Choose a Legal Entity
You’ll need to officially register your business with the IRS and get an employer tax ID number to become a legal entity and employ a staff. You can choose from the following:
- Sole proprietorship: You own and operate the business alone
- Partnership: You have one or more partners but pay the business taxes from your personal income returns
- LLC (limited liability corporation): Protects you and your partners from certain financial liabilities
- Corporation: There is “no owner,” and business taxes are paid through the corporation rather than a single person or partnership
LLCs and corporations are among the most popular legal entities within the cannabis industry.
You’ll also need to decide if you want to trademark your business or not, which will cost extra. A trademark prevents other businesses from using your name and intellectual property freely. Trust us; it’s worth the extra copyright fees.
Set Up Your State and Federal Taxes
The tax laws on cannabis vary from state to state, and since medicinal marijuana can only be recommended—not prescribed—the FDA doesn’t regulate how it’s taxed.
And your marijuana dispensary will get taxed up the wazoo!
Because of this, you need to ensure that you assign a tax amount to every single sale through your point of sales system. You’ll also want to get an idea of the cannabis tax laws in your state, country, and city.
Put Your Dispensary on the Map
Besides knowing how to open a marijuana dispensary, you also need to know how to market it. We can help you with that. Contact us today to learn more about how we connect cannabis dispensaries with consumers all over the United States.