Now that recreational marijuana is legal in California, more and more people want to start a marijuana dispensary. In fact, you can find a Marijuana Dispensary in California more often now than you would find food chains and stores. But even though many dispensaries are successful and thriving, there are also others that are generating far below the industry revenue average. This is because this type of business is challenging, especially for new entrepreneurs.
So before diving in, here are a few things that you need to know.
Nobody Is an Expert in This Business
Having all the confidence in the world upon entering the cannabis industry is not enough. But how hard could it be? Well, if you ask marijuana entrepreneurs, it’s hard! Many have lost millions because of costly mistakes, failure of ideas, and missed opportunities. This is why it is very important to seek counsel right from the start.
For newcomers, those who have been in this business for a long time, it’s advised to partner with people who have contacts in this industry as well as those who own, operate, and already work with the successful dispensary. When it comes to your accounting, security, your taxes, insurance, and other legal and government affairs, hire an accountant who has already had the experience and knowledge about the business and knows the ins and outs of the industry.
Getting a Dispensary License
Before you can apply for a marijuana dispensary license, you should be able to prove that you’re going to be a good operator. This means that once you apply, you should already have the experience or you should be able to show that you’re capable of executing a dispensary plan that is well thought-out and one that is primed for success.
If you’re new to this industry, seek help from an expert counsel in order to gain the necessary insight regarding this business. During the application, you would be asked to demonstrate and should have answers to tough questions that surround this business. You need to have legitimate answers or else you will not have a license to operate.
Banking Is Possible With Cannabis
Some entrepreneurs do not get to have a good relationship with their banks because of this business. This is why it’s very important that you find the right bank for you. But this is not going to be easy. Even so, banking in the cannabis industry is very possible. In order to secure an account, you need to find the banks that identify themselves as those who are willing to work with your business.
When choosing a bank, don’t go for the big ones. Choose a smaller credit union as well as regional banks. Once you’re able to find the right bank, be straight and honest about your business. However, proceed with the knowledge that they would accept your dispensary and might, later on, tell you that you need to cancel your account.
Capital and Loads of Patience
Whether you will be operating for medicinal-only or for recreational use, you need not only to be optimistic but also realistic in your approach. When it comes to the cost of this business, launching a dispensary can require a huge amount of money. According to the National Cannabis Industry Association, you need to prepare a good capital to start the business as well as for your licensing and other legal fees.
Many people think that upon entering this business, they are going to get rich in an instant. But remember that a good return in this investment is not a sure thing. The moment you start, there will be or will be no immediate cash-flow. It may also take a few months, even years before new businesses like this can get on their feet. Also, the rollout can be delayed. So in this type of business, know what to expect.
Working with Other Vendors
In this business, there are many suppliers who are afraid of working with entrepreneurs in this industry. They are scared that it could affect their reputation or it can get them into trouble. To avoid this kind of problem, work with someone who has already been in this industry for years or has trusted connections. In order to run a successful dispensary, be compliant and profitable.
Opening up a marijuana dispensary is not going to be easy. It takes lots of time, patience, and capital. You have to make sure that you are ready to tackle all of the factors mentioned above. Like other businesses, this type is also not going to be easy. Once you get used to it and find people and partners that you can trust to work with, then you can become successful in this field.