What to Consider Before Starting Your Own Weed Dispensary

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As you may know, the cannabis industry is blowing up right now, making it a perfect time for new entrepreneurs to enter the market. In 2022 alone, the industry is projected to be worth a whopping $33 billion. Dispensaries are one of the best money-making opportunities because demand is only increasing. However, while you may have dollar signs in your eyes, opening a dispensary is a bit more complex than you may imagine. 

So, to help you avoid some of the pitfalls of this industry and succeed in your new venture, let’s break down some of the things you need to consider before opening a weed dispensary. 

Step One: Rules and Regulations

One of the most significant challenges you’ll face when opening a dispensary is figuring out the various legal hurdles you’ll have to overcome. Unfortunately, because cannabis is still illegal at the federal level, each state has a patchwork of laws and regulations. Some states make it easy to open a dispensary, while others make it needlessly complicated. 

So, the first thing to do is determine the local laws for your state and county. From there, you can worry about elements like licensing, permitting, and zoning. Here’s a breakdown of the different aspects to pay attention to before opening a dispensary. 

States Where Weed Dispensaries are Legal

Currently, there are only four states where all cannabis is fully illegal. So, if you live in one of these areas, you’ll either have to move to a nearby state or wait until the laws are changed. These states include: 

  • Idaho
  • Wyoming
  • Kansas
  • South Carolina

On top of these states, seven more only allow CBD products, even those with trace amounts of THC. Those states include: 

  • Wisconsin
  • Iowa
  • Indiana
  • Kentucky
  • Tennessee
  • Georgia
  • Texas

Next, there are states where cannabis is decriminalized. In this case, the substance is technically still illegal, but police and prosecutors won’t go after individuals for using it. These locations include: 

  • Nebraska 
  • North Carolina

Seventeen states allow medical marijuana, and some have also decriminalized all cannabis use, whether medicinal or not. In these areas, dispensaries are allowed, but you’ll have to jump through some hoops to get licensed. These states include: 

  • North Dakota
  • South Dakota
  • Minnesota
  • Utah
  • Missouri
  • Oklahoma
  • Arkansas
  • Louisiana
  • Mississippi
  • Alabama
  • Florida
  • Ohio
  • West Virginia
  • Maryland
  • Deleware
  • New Hampshire
  • Hawaii

Finally, the remaining 20 states have allowed all cannabis usage, both recreational and medicinal. If you’re planning on opening a dispensary, it’s best to do it in one of these locations, including: 

  • Alaska
  • Washington
  • Oregon
  • Calfornia
  • Nevada
  • Montana
  • Colorado
  • Arizona
  • New Mexico
  • Illinois
  • Michigan
  • Virginia
  • New Jersey
  • New York
  • Connecticut
  • Rhode Island
  • Massachusetts
  • Vermont
  • Maine

Recreational vs. Medicinal Cannabis

As a rule, you need to obtain more licenses to sell medical marijuana than you do for recreational. Because customers must have a valid medical marijuana card, you need to work with reputable companies to verify these cards are genuine. In areas where cannabis is both medical and decriminalized, you have a bit more wiggle room, but decriminalization usually applies to users, not dispensaries. 

Overall, it’s best to work with a cannabis-related attorney to help you navigate through the murky legal waters so you can ensure everything is above board. Otherwise, the state could revoke your license, and it’s pretty hard to get back on track after something so devastating. 

Certificates and Licensing

Each state has its own licensing standards for dispensaries, and some states help expedite these permits while others may drag their feet. For example, opening a new dispensary is pretty easy in Oregon and California but much harder in Nebraska or Oklahoma. Also, some counties may complicate the process by adding extra steps, so you need to know everything before getting started. 

Step Two: Sourcing Your Product

As with any other business, you need products to sell to your customers. As a dispensary, you get to pick what you sell and how you sell it. Because competition is so fierce within the industry, you need to find high-quality sources to ensure you’ll get repeat customers. Here are some factors to consider with this step. 

Working With Growers vs. Growing Your Own

One of the great things about cannabis is that it’s relatively easy to grow and cultivate. While you’ll need quite a bit of capital to develop an operation, it’s much more straightforward than manufacturing other products. Ironically, it’s probably easier to grow cannabis buds than it is to make the pipes to smoke it. 

As a new dispensary, you’ll probably work with local growers and source different strains. However, as you earn more money, you may decide to cut out the middleman and grow your own weed. In that case, you need to work with a high-quality seed bank to get reliable, consistent results. 

Sampling Different Strains and Products

If you’re not a cannabis user, it can be hard to tell which products will sell the best. In this case, it would make a lot of sense to hire a consultant who can tell you which strains work better for specific customers. For example, Sativa cannabis is ideal for those who want a creative energy boost. So, marketing these strains to creative professionals or college students makes sense. Conversely, Indica cannabis can help individuals relax and fall asleep. In this case, you’d want to promote these strains to those with anxiety or insomnia. 

Overall, having a weed connoisseur on your planning and preparation team will be a wise investment. Even if you do partake, you may not want to get too high off your own supply. 

Step Three: Location, Location, Location

Depending on your state, you may find it pretty tricky to set up a dispensary. Many states and counties have strict zoning laws for these kinds of things, so you’ll have fewer options than you might realize. That said, you shouldn’t just settle for whatever is available. Instead, focus on these factors: 

High Traffic Locations

Ideally, you want a dispensary that will get a lot of visibility from many different people. For example, putting a dispensary in an outdoor shopping mall makes sense because the mall draws big crowds already. However, since that’s not possible (yet), you’ll have to settle for locations that are easy to find while driving. 

On-Site Parking

When customers come to your dispensary, will they be able to park on-site or close by? If parking is a huge issue, you’ll lose a lot of business. Also, consider alternative transportation options like scooters, bicycles, and mass transit. For example, if you have multiple bike racks out front, you may be surprised by how many customers use them. 

Lounging vs. Grab and Go

Typically, a dispensary is a lot like a convenience store. A big part of this is due to regulations since customers can’t use their purchases on-site. However, you can make the experience a bit longer and more enjoyable by offering concierge services and lounging areas. Even if your customers can’t smoke or get high, they can still sit back, relax, and enjoy their stay. Both options have pros and cons, so consider what kind of clientele you’re trying to attract. 

Step Four: Marketing and Promotion

Once your dispensary is on track to open, you need to create a brand and start promoting online. Again, regulations can limit how much you can market your business, but you can find creative workarounds. For example, instead of discussing your products at length on social media, you can talk about some of the benefits of your “all-natural” items. Also, you can find groups and sites dedicated to cannabis and promote your brand on those platforms. 

The Bottom Line

Although opening a dispensary can be a lucrative endeavor, it’s a bit more involved than starting most other retail businesses. But as long as you know what to expect and do your homework, you can succeed and thrive in this industry. 

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