Is the entrepreneurial zeal within your mind and heart hinting to the formation of a cannabis dispensary?
And that too in Vegas?
If that is so, then you have come to the right place and taken the very first step towards becoming an owner of a successful dispensary in the not-so-distant future.
Weed junkies and potheads won’t be called as such if the thought of opening up a cannabis dispensary did not cross their minds at least a dozen times.
Even if you don’t identify as a cannabisseur, you would be kidding yourself to turn a blind eye to the lucrative and expanding weed industry. It has been the talk of the town for over a decade now.
Surely, the idea is complemented by a sense of excitement and uncertainty.
Addressing the uncertainty and unfamiliarity linked to the title is the agenda for this article.
We will adopt a methodical approach towards understanding the dynamics of a cannabis dispensary, what things you should consider before opening one; the legal requirements; and the possible hurdles that can be easily avoided through the aid of this guide.
Let’s take a deep dive into the topic!
How To Start A Cannabis Dispensary?
Let’s address the elephant in the room right away. What does it take to start and run a successful dispensary? A bit of everything! Let’s go through them step by step.
In Nevada, where Vegas takes the spot of the 28th most populated city in the US, opening up a cannabis dispensary comes with a hefty initial expenditure in terms of license and application fees.
You will be expected to pay the following:
- $5,000 application fee (non-refundable)
- $20,000 license fee
There are five types of retail licenses, and you can choose the one as per your preference:
- Retail store
- Product Manufacturing Facility
- Cultivation facility
- Testing facility
You should be ready to undergo an extensive background check before the process formally starts. This step ensures that you are off to a legal and compliant start.
The US has seen rapid growth in the legalization of recreational and medical marijuana.
In Las Vegas, medical marijuana was recently legalized, whereas recreational marijuana was legal to use since 2016.
There are a few technicalities related to a cannabis dispensary which are detailed in the following documents:
- Cannabis Control Board (Effective Jan. 1, 2020)
- Statue 453D: Regulation and Taxation of Marijuana
- Chapter 453 D: Regulation and Taxation of Marijuana (Revised)
- Bill 164: Agent Cards, Advertising, Penalties
Further details are described in the following paragraphs.
Any aspiring dispensary owner should have at least $250,000 in liquid assets. The individual(s) also need to provide documents for the proposed establishments under which the dispensary is supposed to run.
The property may either be under the owner’s name. In case someone else owns it, the written permission of the original owner would be required.
The criminal records, if any, would also be needed in the process. Your fingerprints will be used by Central Repository for Nevada Records of Criminal History to ascertain the involvement and nature of any past criminal activity.
For this purpose, you will be requested to provide authorization for the use of your fingerprints.
Lastly, the age requirements for opening a cannabis dispensary is 21 years and older. This information will be cross-checked from a government-issued identification document.
Just like any routine business venture, opening a cannabis dispensary requires a lot of thought and brainstorming.
The major chunk of mental effort is dedicated to the business plan.
This document is a comprehensive endeavor that provides the aim, goals, vision, and nature of the business. It also details the likely costs, revenue, and future profitability.
This information signals the attractiveness of your business to the investors.
Since a business plan is a technical and holistic document, we recommend that you hire an expert resource for the preparation of a successful business plan.
The expert would ideally be well-acquainted with the dynamics of the cannabis industry, particularly its retail aspect.
Moreover, it is always suggested to have a lawyer on board who can review if your line of action follows the legal framework of the state.
A successful business model will have a clear legal aspect embedded in the document.
For a summarized view of the business plan, the following components will give you an idea of what is expected of you:
- Company overview
- Organization chart
- Corporate structure
- Market structure and analysis
- Pricing strategy
- Marijuana industry forecast
- Expected gross margins and profits by year
- Cash flow statement
- Forecasted balance sheet and budget tables
- Forecasted profit and loss statement
Additionally, you may visit the U.S. Small Business Administration website as it is a dedicated resource for aspiring small business owners.
Although the information on the marijuana business will be limited as it is federally illegal, you should still acquaint yourself with this government resource.
Funding and Investments
You may have realized by now that setting up a cannabis dispensary is not a cheap idea. It requires a lot of money to even start the process. How can a smart person go about?
Secure external funding!
In this regard, banks won’t be welcoming since marijuana is illegal at the federal level. The banks are reluctant to provide funding or loads. This reality makes the formation of a business plan all the more important.
Another route to secure funding is pitching your idea or business to potential investors. Seasoned investors are receptive to high-risk, high-reward ventures and a cannabis dispensary falls in the category.
Since you will be needing anywhere around $150,000 and $2,000,000, it is never a bad idea to look outwards for the source of finance.
Given the high significance of financial matters, the idea of a cannabis dispensary should definitely include a professional accountant.
For instance, a Certified Public Accountant (CPA) can handle the financial aspect of your business.
Complement a financial professional with a legal attorney is the recommended combo to ensure that you can survive both the initial and ongoing process of setting up and running a dispensary.
For any business occupying a physical space, the location is a key decision to make. It plays an important role in determining your customer base and daily revenue.
However, for a potential dispensary owner, the location has a significant legal angle, too.
- Dispensaries can not be located within 1000 feet of a public or private school.
- Dispensaries should be outside the 300 feet locus of a community facility such as parks, churches, etc.
For a preliminary analysis, you can use data on traffic and demographics of a potential area to check the feasibility of opening a cannabis dispensary.
The store should ideally have a parking footing to make the store accessible and welcoming to the public. You can find dispensaries near me in vegas.
What and How Much Can You Sell?
If you are a fan of diversity, then there is some restrictive news for you.
In a cannabis dispensary, you will only be restricted to sell marijuana products, as outlined by the legal requirement of being hemp-produced.
Selling of food, nicotine, and beverage will not be allowed within the premises of the dispensary. Apart from what can be sold, there is also a legal cover related to what can be sold.
A cannabis dispensary owner can sell marijuana products that comply with the following limits:
- 1oz of usable cannabis (unconcentrated)
- Edible marijuana product with no more than 3500mg of HTC or one-eighth (1/8th) ounce of concentrated cannabis
- 1/8thoz of concentrated cannabis with less than 3500mg of HTC
Each product should have the following statements affixed on the marijuana product.
- “THIS IS A MARIJUANA PRODUCT”
- “This product might be unlawful outside of Nevada”
You will also be required to state legal labels about the product that should consist of the following pointers:
- Marijuana should be kept out of the reach of children
- The health risks associated with consumption of the product
Anything entrepreneurial always comes with a set of risks and rewards. It is also filled with the possibility of doing things your way, within your means, and take complete ownership of whatever you do.
A cannabis dispensary will be a dream-come-true for a risk-loving individual who wishes to combine the passion for a personal venture with the individual trait of a weed junkie. An uncanny but a remarkable combo, if you ask us!
Just be mindful of the factors we highlighted in this guide.
Financial aspects and legal requirements demand a thorough deliberation that may take some time.
The exercise may be dry, but it is worth the mental effort. Make sure that you understand the industry and follow the rules to the T.
Conclusively, you may have to become a jack of all trades, but that means a significant step nearer to your admirable goal of becoming a successful owner of a renowned cannabis dispensary soon.
Good luck with your new found journey!