How to Start Your Own Cannabis Dispensary: A Step-By-Step Guide

There are few industries that are growing like the cannabis industry in the United States. More and more states are starting on the path to legalizing cannabis, and that means big rewards for the people that cash in on this wave by starting dispensaries. 

Starting a cannabis dispensary might seem intimidating, but if you follow all the right steps in planning your dispensary, you’ll be rolling in green before you know it. In this step-by-step guide, we’ll show you how to open your own cannabis dispensary and ride this green wave. 

Step 1. Know the Law, Stay Ahead of the Law

If your state has made cannabis legal that does not mean that anyone can sell it. To sell cannabis in the United States, you’ll need different licenses and certifications from the state you live in. Depending on the type of cannabis dispensary (medical v.s. recreational) and your business plan, you’ll need different licenses. 

For example, in Colorado, you’ll need a license to operate a cannabis dispensary, but if you plan to grow your own product, you’ll also need a license to cultivate your own cannabis for sale. Make sure you do your research on the proper licenses and define what your store will include so you get the right license. 

Also, make sure to do research on the local laws and regulations surrounding selling cannabis. Each state will have its own regulations and guidelines for selling cannabis, including purchase limits and how much THC can be in a single serving. 

You also have to make sure that you know the tax laws surrounding selling cannabis in your state. Cannabis dispensaries are more taxed than most industries, so knowing the tax laws will keep you out of trouble and out of the red. 

If you have questions or concerns about the legality of your store or how to navigate the process, hire a cannabis consulting company or a legal advisor to help you. 

Step 2. Got Funding?

Once you’ve studied the laws surrounding the sale of cannabis in your state, it’s time to lock down your funding. Some states require proof that you have the money to start a dispensary, and with fees, down payments and taxes, you could need upwards of $500,000 or more to start your dispensary. 

This is one of the tougher aspects of starting a cannabis dispensary. Because federal law still outlaws the use of cannabis, large banks will not provide loans to companies or investors looking to start a cannabis dispensary. This is because, under federal law, the interest paid to the bank is considered illegal income. 

If you live in a state that has an established cannabis trade, you might be able to find small banks and institutions that will provide you with a loan to start a dispensary. If that is not an option, you’ll need to find the right partners to invest in your business. 

If you’re having trouble finding investors, you could speak to investment firms or “angel investors”, people who provide funding for businesses in exchange for partial ownership or equity. These firms and investors know the value of the cannabis industry, and if you have a good business plan, they might provide all the capital you need to start. 

Step 3. Pick A Location

Once you’ve secured your funding, you need to find the right location for your business. The most important part of picking a location for your dispensary is picking a place that adheres to the regulations and rules of your state or city. 

For example, in Colorado and San Diego, a dispensary cannot be within 1,000 feet of a school. There are similar regulations about a dispensary’s proximity to schools, residential areas, parks, and libraries, so make sure you know the regulations and pick a spot that adheres to the rules. 

There are also laws that relate the surveillance and security of your location. In Colorado, all entry points and windows must have locks and surveillance on them at all times, and you must report any disturbance or break in to the proper agencies. 

Step 4. Back to School

Once you’ve secured your funding and your location, it’s time to hit the books. In order to be a successful cannabis retailer, you have to know everything there is to know about cannabis. 

That means learning about things like the differences between Indica and Sativa, how to recommend dosage for edibles, what qualifies as a concentrate, and much, much more. Having this background knowledge will make you a better salesman and spokesperson for your dispensary. 

This is especially important if you plan to cultivate your own product. Taking horticulture courses, grow room design courses, and electrical engineering courses will give you the knowledge you need to set up a functioning grow room and get the best yield out of your crops. 

You should also take the time to learn what is trending in the world of cannabis. Different customers will like different products and staying on top of the new products in the cannabis space will give you an edge on the competition. 

Step 5. Craft an Image

Once you’ve gotten the procedural stuff done, it’s time for the fun stuff: crafting an image for your dispensary! You want to create a welcoming atmosphere that is warm and friendly, without falling too heavily into the “hippy” stereotypes. 

Furnishing your space with eye-catching artwork and keeping it modest will give your dispensary a modern, professional feel. You can also go with a more natural feel, with plenty of plants and exposed wood. The point is to create a space where every customer will feel welcome and comfortable. 

Another important note is to avoid using terms that will make you seem less professional. Avoid using terms like, “weed” or “dope.” These are outdated terms with a negative connotation that you don’t want to be associated with your business. 

Ideally, you want to use the word “cannabis” instead of the other less formal terms. Using the word cannabis across the board will ensure that every customer feels comfortable and as though they are in a professional environment. 

Off to Greener Pastures

With this step-by-step guide, you already have a head start when it comes to fulfilling your dream and starting your own cannabis dispensary!

If you have any more questions about starting your own dispensary or any of the steps in the process, please visit our blog



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