With the marijuana industry on the rise, many growers are looking to take the next step and open their own dispensaries. And why not? Breaking ground in a newly legal industry can be exciting and potentially lucrative.
However, while right now there may seem to be a flood of opportunities pouring down, five years from now the medical marijuana industry is probably going to look very different from what it does today.
We’ve all heard the statistics. Most new businesses fail within their first year. In some areas dispensaries seem to be popping up like Starbucks on every corner, and many of these will likely go belly up leaving their once hopeful owners broke and disappointed.
But thousands more will succeed, building sustainable incomes, ingratiating themselves into their communities, hosting fundraisers and holding bake sales.
How can you be sure yours will be one of the thriving businesses?
Get Ready For Regulation
The first and foremost step in moving from grower to dispensary is licensing. You should be prepared — or prepared to pay a lawyer — to wade through a mountain of documents and forms, in some places 1,000 pages or more.
These sometimes bizarre regulations can be a major obstacle in opening a legal dispensary.Every state (http://www.ncsl.org/research/health/state-medical-marijuana-laws.aspx) has its own regulations. And so does every county, city and township. Are you too close to a school or park? Is your signage the correct size and not too obtrusive? Or does it need to be made even more obvious? Are there neighborhood fees or restrictions you need to be aware of? What sorts of edibles will you sell? And does the color of your gummies comply with code?
Once you do get through the paperwork, there’s still no guarantee the community will welcome you with open arms. Some neighborhoods are glad to see the arrival of legal marijuana, while others are busy passing anti-tolerance measures. Be prepared to deal with local hearings, similar to a new bar opening.
There’s No Business Like Grow Business
One thing the new marijuana laws will do is to introduce healthy competition into the marketplace, so if you want to go from grower to dispensary, now is the time to build a strong foundation for future success. A southern California realtor that works with growers and dispensaries says city officials are looking for people with strong business backgrounds who are able to handle large multimillion-dollar corporations.
So educate yourself. You don’t have to get an MBA, but you do need to be willing to put some time into learning about the ins and outs of running a business such as writing a business plan, creating a marketing strategy, maintaining a budget and all the other basics that go into starting and growing a business. Public relations may be especially important because, in many cases, you will also need to win over community support. As marijuana moves into the mainstream, there are bound to be changes in the industry. Make sure you have your bases covered.
Be Prepared to Partner
In some cases, simply having an extensive background in growing isn’t enough. You’ll need to provide bank statements and have a certain amount of cash behind the operation. This had lead to a number of “shotgun marriages” in the industry, where growers and financiers must team up to form a dispensary that can look good on paper. Some growers hire private investigators to learn everything they can about a potential partner. Others will look to build a larger team, meaning that no one person has total control over business decisions.
If growing is where your skills are, don’t presume to know the business-side of the dispensary game. With all of the records and documentation required, you may wind up diverting too much energy away from the backbone of your business: your cultivation facility. Finding talented office managers and records controllers means keeping your focus where it needs to be. It can be difficult to delegate that much control to another person in your company, but it will pay dividends and reduce the stress on you. And your plants.
Photo Credit: Dank Depot
Author: Leslie Clary