For those interested in getting into the cannabis industry, owning a dispensary is a solid option to pursue — and it’s less intimidating than you might think. Dispensaries are a great learning ground because they’re less intense and have a lower barrier of entry than other cannabis-related fields.
Currently in the U.S., dispensaries have an expansive footprint. Like Starbucks, many cities have a dispensary on every corner. In other words, aspiring dispensary owners don’t have to worry about market saturation or limited opportunities.
Plus, since the cannabis industry is so new, you don’t need an extensive cannabis background to get started, and you can easily open a dispensary without having to grow your own product.
Read on to find out if owning a dispensary is the right path for you and how to get started.
Who Is Best Fit for the Dispensary Path?
Owning a dispensary is such a great entry point because it’s pretty across-the-board as far as who can get into it. Anyone who’s interested in cannabis and wants to start a business has the opportunity to do so.
Colorado recently opened a social equity program to help those who were disproportionately impacted by the war on drugs by removing barriers in the marijuana licensing process. Other states are putting forth similar efforts, as well, so this may be your shot to get into the industry.
Of course, realizing your dream of owning a dispensary is easier in some states than others. In Oklahoma, for example, the running joke is that it’s easier to get a cannabis license than a fishing license.
Although the number of retail cannabis licenses in Oklahoma declined by 8% in 2020, according to MJBizDaily, the state still issued 565 new permits throughout the year and remained the state with the highest number of retail licenses, overall.
Pros of Owning a Dispensary
For many reasons, owning a dispensary is ideal for those looking to break into the cannabis industry. To name a few, a dispensary:
- Is less intense in terms of tracking and compliance. The tracking software is easier to master than in other types of facilities, making dispensaries a great place to learn.
- Has a lower barrier of entry, comparatively. Cultivation requires a botany degree, while manufacturing and extraction usually require some level of college education. Running a dispensary, however, doesn’t require you to meet these standards.
- Is the quickest way to cash for investors. Building out a retail dispensary takes less time and money than building out a cultivation or extraction facility.
- Is less technical and detail-oriented for owners. Even with inspections and other regulations, a dispensary is still easier to design and inspect than cultivation and extraction facilities.
- Typically follows a plug-and-play situation. Retail dispensary operations are all fairly similar, so you have a template to work from.
- Has a smaller footprint and is a smaller investment. Unlike extraction facilities, dispensaries don’t use expensive equipment. They also take up less space — some can be as small as 1,000 square feet, whereas cultivation requires many times that amount of space.
Is varied in terms of the experience you want to create. If you want to be the Apple store of dispensaries, you can certainly spend more to remodel and upgrade to more expensive equipment. But you can also keep it smaller and more simple if you prefer.
If you’re new to the industry and want a point of entry with fewer prerequisites and a faster timeline to get started, owning a dispensary may be your best choice.
Cons of Owning a Dispensary
Despite the advantages, owning a dispensary is not without its challenges and restrictions that you’ll need to be aware of if you decide to go this route. Owning a dispensary means you:
- Are reliant on wholesalers (unless you’re vertically integrated). If your wholesaler’s crop goes, you’ll have to figure out what to do to sustain your business.
- Will face high competition. Since there are so many other cannabis dispensaries, your potential customers have many more options.
- Might have trouble finding real estate. Choosing a strategic location isn’t as simple as choosing where to put a typical restaurant; a dispensary can’t be located near schools, day care centers, rehabs, pools, etc. Plus, you’ll face more limits and restrictions that will depend on your county and state.
- Can’t even be near another dispensary, in some cases. In Aspen, Colo., for example, you’re likely to see dispensaries lined up one after the other, whereas in Arizona, Nev., dispensaries can’t be within a certain distance of one another; the exact distance varies at the local level.
If you do choose to open a dispensary, make sure you are prepared with due research to meet all of the requirements for your area.
Owning a Dispensary: Where to Start
If you’ve decided to open up a dispensary, start locally. Choose the area in which you want to operate, and really get to know the regulations and community members.
It’s important to work with someone in real estate who is familiar with cannabis so they can help you comply with the area’s setback restrictions. Have them help you write a proper real estate contract and application that will accurately reflect the cannabis industry.
Keep in mind, too, that the exact license and application requirements will vary by state. Georgia, for example, has strict regulations and an extremely competitive application process that only awards licenses to six companies compared to Oklahoma’s much shorter list of regulations and hundreds of licenses.
Owning a dispensary is a great way to break into this fast-growing industry. As long as you pay close attention to requirements for your location, you have plenty of opportunity for growth and success.
If you’re interested in owning a dispensary or getting into the cannabis industry, get in touch with Higher Yields Cannabis Consulting. We can provide you with the right tools and connections to set you on the path to success.