6 Steps to Start a Dispensary in Today's Market
There’s no denying the cannabis industry has been booming in recent years. Experts have predicted it will keep growing to more than $73 billion by 2027.
As an entrepreneur, you’re wondering how you can get in on the action. One of the options you’ve been considering is starting a dispensary.
This guide will help you start a dispensary in today’s market.
1. Do Market Research
If you’re wondering how to start a CBD business or a cannabis business, your first step needs to be market research.
If you’re looking at starting a dispensary, then you’ll want to think about a few different factors. These include:
- How many dispensaries already serve your geographical area?
- Do you plan to sell online?
- What products will you carry?
- Is there a demand for those products?
- Is it legal?
You might decide to open a cannabis dispensary in a very small town that currently doesn’t have a shop. You may find there’s not enough demand. There might be competition from a larger center that has better product selection.
If there’s already a cannabis dispensary but no CBD shop, then you might consider that option instead.
Legality is a big issue right now since it’s not legal everywhere to operate a dispensary. Even in states where adult-use cannabis is legal, you might find cities and counties that have banned it.
Market research is key, especially given legalities. There are also concerns about increasing competition and market oversaturation. Market research will shed a light on all these potential challenges and help you determine where your dispensary fits.
2. Determine Licensing and Eligibility
The cannabis industry faces some steep legal challenges right now. Even if cannabis is legal where you want to open your store, you may run into issues around licensing.
Most states require licensing for cannabis businesses. They may also have some strict requirements for who can operate them.
In Oklahoma, anyone hoping to operate a medical marijuana dispensary must meet state criteria. These include:
- Selling a product grown in the state
- Residency requirements
- Passing a background check
- Proof the business is a certain distance from the school
There are other criteria as well. Different states have different requirements.
If you don’t meet eligibility requirements, you won’t be able to get a license to open your dispensary. There are ways around this, such as bringing in partners or changing ownership structures.
Always check in with your state and local governments to see what the current criteria are.
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3. Write a Business Plan
Next on your list should be writing a business plan for your new dispensary. A business plan is an excellent document for any business to have.
The plan will help you visualize a future for your business. What is your mission, and what do you hope to achieve in the next few years? This is your opportunity to outline your strategic plan for opening and growing the business.
It’s also a chance to assess opportunities and risks facing the business. Are you opening into a very competitive market? Is there a niche market or gap you can take advantage of?
You’ll also outline what you need to get started. You’ll want to think about inventory, technology, and even staffing.
Cannabis recruiting can be quite tricky, so it’s a good idea to outline the roles you’ll need to fill. You can also research rates of pay, as well as compensation packages. You may even want to think about who to work with to fill these open roles.
A business plan will also help you access the funding you need. Getting financing for a cannabis company can be quite tricky, so start early.
4. Find a Space to Start a Dispensary
Starting a dispensary is an adventure full of challenges. One of the biggest ones can be finding an appropriate space for your new business.
You may want to consider renting since you may need to move as laws change or your business grows. Even if you own a property, you may not be able to operate your dispensary there.
Oklahoma, for example, has rules about how close a cannabis or CBD business can be to a school. Other states may have different laws on the books.
Once you get past the legal hurdles, you may find not every landlord wants to rent to a cannabis business. Some may be concerned about damage or theft. Even local residents may express concerns about the location of your business.
5. Source Your Products
Now you have a license and found a space. You’ve done market research and written a business plan. You’ve used that to get the financing you need, and you’re hiring the help you need to serve your future customers.
It’s time to think about the products you’ll carry. Your inventory may speak to your business’s purpose. Do you carry only medical-grade products, or are you focused on the general consumer?
You may want to focus on wellness products, like bath bombs and salves. You may even decide to focus solely on CBD products and leave cannabis to other stores.
6. Market Your Business
No guide on how to start a CBD business or cannabis dispensary is complete without a mention of marketing. You could create the greatest shop ever, but no one will shop with you if they don’t know you exist.
Research cannabis advertising laws in your area. Then plan a campaign to help raise awareness about your business. Don’t forget to allocate some budget for this effort.
Growing Your Business and Your Career
After completing these six steps, you’ll be well on your way to start a dispensary successfully. The market today may be competitive, but there’s still room for innovative entrepreneurs.
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