With the medical marijuana industry exploding in popularity, and with cannabis becoming legalized in an increasing number of regions, now is an excellent time to consider getting into the industry.
However, opening a dispensary isn’t a quick, overnight project to take on. To make your new venture a success, there are multiple steps to follow and important decisions to make.
Understand the Knowledge and Funding You Require
Some people think that because they’ve been marijuana users for years, or have run a business before, that opening a dispensary will be well within their wheelhouse. Unfortunately, things aren’t that simple. Running any venture in the cannabis industry is tough, and dispensary operations in particular have their own set of challenges to deal with. There are many considerations unique to dispensary ownership when it comes to things like compliance, insurance, accounting, taxes, security, government affairs, finance, marketing and the like.
As such, don’t rush into opening your own company in this sector. It takes time to learn what you need to know to make a dispensary a success. Plus, it’s wise to surround yourself with the right people who have extensive experience in the industry and helpful contacts. You might hire consultants or choose to partner with these in-the-know people. Either way, obtaining assistance should help you avoid costly mistakes and missed opportunities.
Also, if you plan to get a loan to start your dispensary business, this may not be as easy as you expect. Traditional loans are rare in the cannabis industry. These types of ventures may be compliant with state laws but still break federal laws; as a result, many lenders don’t want to put their money into organizations that deal with marijuana.
If you need outside investment, it’s best to approach private investors or bring partners on board. Funding-wise, focus on angel investors, venture capitalists or even the cannabis-specific funding firms that have launched in recent years to help fill the gap. Many people are excited by how much the marijuana industry has exploded recently and want to back well-considered players in the market.
It’s also necessary to comprehensively research the marijuana market if you want to get ahead in it. The more you know about the current state of the sector, who your potential customers are and who your competition is, the better. Learn where the major growth areas are now and what’s likely to be on the up in the next five to 10 years.
When it comes to the target market, investigate who your likely clientele will be. Be clear on who these people are, why and how they want to buy marijuana what their lifestyle and work is like, what budget they have for purchases, when they like to shop and if they have a need that’s not currently being met by the market.
Get a good idea of the types of products your ideal customer will be after, too. For instance, are you focusing on frequent users who like stronger products, such as the Bruce Banner strain? Or will you be catering to users more interested in CBD oil added to things like gummies, baked goods, drinks, creams etc.?
As for competitors, learn about other dispensaries in the region where you plan to open. What is the state of their premises, and what is their customer service like? What do they sell, specifically, and when are they open? Where do they market their business, and who do they target? There are many factors to research, so do your due diligence.
Find a Point of Difference
Once you’ve done your research, you will be more successful to create a point of difference for your dispensary. When starting a new business, it’s vital to have a way to stand out from the crowd, so you interest customers and draw them into your premises rather than losing them to a competitor. For instance, you might decide to create your own, unique edibles line or open at a time of day or night when other dispensaries are closed. You could offer classes or workshops on the premises as a value-add for clients or create a fun, exciting brand that gets attention.
Lastly, as you’d imagine, compliance is particularly important when opening a dispensary. You can come up with the best ideas and get plenty of funding, but if you don’t follow the necessary steps to obtain a valid license and comply in other ways, you could end up having to pay hefty fines or even have your dispensary shut down.
The regulations for operating a dispensary are complex and often confusing, so research the laws in your state carefully. Also, get assistance from an experienced attorney and other appropriate counsel as necessary to ensure your business is legitimate.
Opening a dispensary has the potential to bring you plenty of rewards, but only if you take the steps needed to make your business work. Take things step by step, learn what you need to, and don’t cut corners, and you should be able to create a venture that sets you up for the long term.
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