According to Statista, revenue in the U.S. cannabis market is anticipated to demonstrate an annual growth rate of 3.36%, leading to a market volume of $55.43 Billion by 2030. The trend of investing in the industry started out strong and remains today, with many seeking ways to obtain their own piece of the pakalolo pie. If you’re exploring the steps to opening a dispensary, either brick and mortar or delivery, keep reading our guide on how to open a dispensary.
- Do your research on laws, zoning and eligibility. Because the cannabis industry is highly regulated, and applicable rules vary widely from state to state and even region to region, it is of the utmost importance to understand what is permitted and prohibited in the area you are hoping to locate your dispensary. Things to consider:
- Types of cannabis businesses allowed
- Zoning and restrictions
- Licenses needed and the process to obtain each
- Compliance measures
- Take note of industry peculiarities, like tax complications, fragmented regulatory frameworks, the effects of a federally illegal market, and banking or lender challenges.
- Build a detailed business plan that includes vital data such as proposed locations, target audience, product range offered, marketing strategies, regulation compliance, security measures, quality and inventory control, employee hiring and training, growth opportunities, and financial projections, including startup costs, revenue forecasts and operational expenses.
- Secure double the anticipated financing. There is always another cost around the corner in the cannabis industry. Many successful businesses utilize a combination of loans, self-funding, investors, grants, startup accelerators and loans to deal with these costs. Short-term funding can also include business credit cards and crowdfunding.
- Acquire real estate, if your state requires it as a prerequisite to licensing.
- Establish comprehensive operational systems per regulations, such as security systems, point of sale (POS) systems and inventory management.
- Apply for licenses and permits, then prepare to wait. The cannabis licensing process typically takes six to 12 months from application to approval, with additional time needed for build-out and final inspections before opening the doors of a new dispensary.
- Hire and train staff. Once approval is finalized, staff can be hired and trained per state requirements. In addition to daily operations employees, consider also designating a compliance officer or advisory board to oversee regulatory and governance updates.
Dispensary Costs to Consider
How much does it cost to open a dispensary? While the answer is not straightforward, it can be determined with some effort. The costs of opening a dispensary can be categorized into startup costs (including real estate expenses), ongoing or operating charges, and staffing costs. Numbers provided below are estimated and can vary wildly due to factors such as location, size, state and operation complexity.Dispensary Startup Costs
- Licensing and application fees: $2,500-$120,000 (not including renewal fees)
- Real estate costs: $100,000-$500,000
Dispensary Operating Costs
- Professional fees and services: $50,000
- Security, hardware and software: $25,000-$75,000
- Marketing costs: ~$100,000 per year
- Products: ~$1,500 per pound
Staffing Costs
- Employee salaries: ~$300,000 per year