Now that marijuana use is permitted in most of the USA and Canada, a green rush has swept through the nation. Cannabis is now legal to some degree in over 95% of the U.S., whether for medical or recreational use.
Savvy entrepreneurs across America are acquiring their dispensary license and working out how to start a dispensary. Opening a marijuana dispensary requires time, effort, and planning, whether you’re looking to create a recreational or medical marijuana business.
New businesses in the marijuana industry are popping up all over the U.S. and Canada, making this a lucrative time for opening a marijuana dispensary. In this post, we’ll discuss how to start a weed dispensary, what licenses are needed to start a dispensary, and what kind of budget you’ll need to start a cannabis business.
Laws and Licensing
When figuring out how to open a dispensary, it’s worth noting that your state regulatory agency will definitely require a marijuana retailer license amongst other business licenses. Most states consider marijuana businesses as moneymakers, making licenses quite expensive.
For example, an annual license in Washington costs $1480. If you’re looking to start a medical marijuana provisioning center in Michigan, the initial application fee costs $6000, and there are annual fees on top of this figure.
Counties and cities can also administer licenses and fees. Therefore, opening a marijuana dispensary could cost you tens of thousands in city, county, and state fees before you even start trading.
For instance, when calculating how to start a marijuana dispensary in Kenmore, Washington, you’ll have to purchase a city-level marijuana business license every year for a total of $500 in addition to other fees. Make sure you calculate all the fees related to your proposed location and factor them into your budget.
Research and Planning
Some of the earliest steps in working out how to open a marijuana dispensary involve research and planning. The majority of states with relaxed marijuana laws provide an official checklist regarding dispensary applications and the processes involved.
It is worthwhile to check out all the licensed competition near your prospective location, and it’s also worth investigating unlicensed operators. Is local law enforcement cracking down on unlicensed operators? Or could these people undercut your business and offer their product 24/7?
One way to discover unlicensed operators is to check local publications for delivery advertisements. Additionally, you can research criminal activity and drug busts around the area. Are unlicensed dispensaries allowed to function freely? Or, are the police trying hard to shut them down? Use this information as part of your business plan.
Budget and Funding
To plan out how to open a weed dispensary efficiently, you need a clear, concise budget. As you create this budget, you’ll have to take 280E into account. Contact wholesalers in your area to calculate the cost of products and work out what your core products will be.
Aside from product costs, there are some other considerations to factor into your budget. These include:
- Rent cost
- Cost of license
- Licensing application fee
- Employee salary(ies)
- Transportation and storage of product
The average cost of opening a cannabis dispensary can range from $150,000 to $2 million. This includes costs of around $100,000 per year in rent, $50,000 for startup renovations, and $250,000 for annual staffing.
Location and Product
Acquiring a great product range for your marijuana dispensary and making sure this is done legally are crucial to opening a successful business. The majority of U.S. dispensaries grow their own cannabis, and this practice is mandatory in certain states.
When you open a dispensary, it is entirely up to you to determine the kind of products you focus on marketing. Many customers prefer oils, dabs, edibles, and concentrates over smoking marijuana flowers. Sourcing quality sellers for these forms of cannabis is easy as the market is currently booming across the U.S. and Canada.
Concerning location, in most jurisdictions, you’ll be required to identify a prospective physical location before you’re allowed to fill out your license application. For this reason, you’ll have to research all the potential areas where you’re considering operating,, paying close attention to local demographics, laws, regulations, and competitors.
Secure Working Capital for Opening a Marijuana Dispensary
There’s never been a better time for opening a marijuana dispensary and cashing in on the current ‘green rush.’
At L3 Funding, we provide a wealth of options to help your marijuana dispensary succeed. From small business working capital to micro loans to cannabis business loans, we have the financial solutions your business needs.
Here at L3 Funding, we make it quick and easy to apply for a business cash advance without undergoing lengthy processing times and complicated paperwork. Plus, you can easily apply for funding online. Get started today!