5 Questions to Ask Before Opening a Cannabis Dispensary – The Pre-Checks
Starting any business is like skating on thin ice. However, if you decide to open a cannabis dispensary, it is a different ball game altogether! In addition to all of the standard business risks, you have to face some unique challenges that come with the industry. So, before you ask to take the big leap, pause and ask yourself the following five questions first and see if you are ready.
The Dispensary Pre-Checklist
1. Are you qualified to get a license?
Check with your local authorities for the latest eligibility criteria. In general, anyone of legal age who is a resident of the state and has no criminal records (even your spouse, in some states) qualifies for applying. Go through the must-haves and the red flags (things that will lead to disqualification under any circumstance) before you put down the hefty (and non-refundable) application fee.
2. Do you have the resources and funding to get a license?
Getting a cannabis dispensary license is quite complicated and, not to forget, expensive. There are various financial and criminal background checks, and each state has a different policy they follow. To increase your chances of licensure, hire a lawyer with good experience in the area. A typical application costs anything between 5,000 to $20,0000, and even a small error can cost you rejection. So, tread carefully.
3. Do you have the right location in mind?
Your favorite ex-game parlor may not qualify as a spot for your dispensary! Local zoning laws are different for every state that restrict dispensaries in particular zones (near schools, medical facilities, housing areas, etc.). So, you should check before leasing out a store. It is worth the extra money to hire lawyers who can help you pinpoint permissible zones for your dispensary.
4. Do you have the right technology to run a store successfully?
Much like the business model, running a dispensary is very different from other retail stores. To answer the question, how to start a dispensary, take note of the following things – In addition to the typical operating procedures like hiring a good team of budtenders, managers, etc., and taking care of their paychecks, you also need to invest in the latest Point-Of-Sales (POS) systems (preferably the ones made for the cannabis industry). Cash transactions usually don’t favor the cannabis business in the long run.
5. Would you rather open a coffee shop?
The cannabis business is full of risks and may not give returns for a long time. Even if all the above questions work in your favor, this last question is the deciding factor. You must be passionate about the business and be willing to live with it for the rest of your days. Anything less than hopeless passion, and you should not go ahead with the idea.
For anyone deciding to open a cannabis dispensary, the count-down to the launch day and the entire journey itself is the most terrifying and rewarding one. There is simply too much at stake, even if you are a seasoned entrepreneur. So before saying yes to the idea, use the questions above to understand if this is the right choice for you.