So, maybe cannabis just recently became legal in your state. Maybe you’re a long-time enthusiast or you’re an entrepreneur looking for your next big venture. No matter your reasoning, the fact is, you’re thinking about opening up your very own dispensary. However, opening a dispensary isn’t as easy as starting your very own corner store. As you may or may not know, the cannabis industry is riddled with a number of regulations you might not be aware of. Here are some key things you should consider before starting your new business:
1) Know Your Local Legislation
Even if cannabis is legal in your state, you still have to look at how your city or county views the substance. If your local government has passed legislation allowing for dispensaries, great! If your city or county hasn’t passed anything, it could be easy to assume they would follow the state’s ordinance. However, given the amount of money you will be investing into your new business, you should be sure there is no chance of being shut down, and thus should be sure your local government has explicitly stated their support of dispensaries. Regardless, it is vital that thorough research of your local legislation be involved in this first step.
2) Getting Your License
Now, it’s important to know that getting the proper licensing for a dispensary, even in a cannabis-friendly community, could still be very arduous. Different counties are going to have different applications; however, most applications are merit-based, so you should be ready to prove that you’re going to be a good, responsible operator. You should hopefully have some industry or business experience and be able to show that you can execute a well-thought-out plan. So, if you are especially new to the industry, it is vital that you seek expert counsel or possibly partner with someone with more experience.
No matter what, you will need to know the ins and outs of your business completely. Be prepared to know everything from how you might handle security to how you will store your products. It is likely that you’ll need concrete answers to many of these inquiries to receive
3) Securing Your Funding and Financial Management
Here, again, things are a bit more complicated than your average retail store. Small business loans are probably not an option for you. In fact, working with a major bank is unlikely due to federal regulations against cannabis. This means your funding may have to come from Angel Investors or Venture Capitalists, of which there are many within the cannabis industry. Crowdfunding is also an option, as well as self-funding, if you have the capital for it.
Once you’re operational, it is not necessarily impossible to work with banks, but it is largely dependent on where you are. There are a few banks, usually smaller credit unions and regional banks, that are willing to work with cannabis businesses. Other than that, many dispensaries operate on a cash-only basis, but that might require more onsite security to protect your assets. Although, the recent passage of the SAFE Banking Act should make it easier for dispensaries to work with banks.
Regardless, before even starting the application process, you should know how you will secure your funding and how you will manage your finances once you are operational. And these are just the basics. This list only serves as a primer for what to expect, and is in no way a comprehensive list of things you need to do to get your dispensary off the ground. My final piece of advice: do your own thorough research and seek expert advice from someone with industry experience before you start your new venture.