The Three Biggest challenges when opening a cannabis dispensary
You have always wanted to own a business that serves your community. You have some money stashed. You love cannabis and its medicinal benefits. So, this upcoming weekend, you can go ahead and open up a cannabis dispensary, right? Wrong.
Before you set on the journey of dispensary ownership, there are some important things that you need to consider. For instance, you may have to deal with government raids, security threats, and being shut down because of unhappy neighbors.
Still, opening a medical cannabis dispensary is one of the best business opportunities out there. Not only are medical marijuana dispensaries in Las Vegas legal, there's already a market for the product. In fact, ArcView Market Research reports that the legal cannabis industry is expected to grow 25% this year alone. This amounts to over $6 billion in sales. Furthermore, virtually all that cannabis will be sold at dispensaries.
As you can see, there's plenty of growth to be had in this industry. But, like with any business, success means research. In other words, you have to learn about the obstacles you may face so you can deal with them appropriately if they should rear their nasty heads. To help you get started in this endeavor, consider three of the biggest challenges:
Challenge #1: Legal Issues
One of the biggest challenges of opening up a cannabis dispensary is the law. Yes, medical cannabis is legal (on local and state levels) in at least twenty locations in the United States but, they have yet to decriminalize it on a federal level.
You also have to remember that you will be the owner of a retail space where your product is a medicinal plant. So, not only will you have to learn all the cannabis-related laws in your specific jurisdiction, you must also remain abreast of municipal, provincial and federal laws and bylaws about retail, zoning, public spaces, employment practices, privacy, and food safety.
To deal with this challenge, your goal should be to stay on top of the laws so that they don’t get on top of you. We're not saying that you will need a law degree to open up shop but, that an experienced lawyer will be a valuable asset.
Having an attorney in your employ will help ensure that you remain in full compliance with all the laws in your jurisdiction. This will cost some money but it's better than the alternative. In other words, you don't want to spend tens of thousands of dollars and go through the tedious process of opening a dispensary, only to find out that your operation is breaking a number of laws.
Challenge #2: Public Relations
When it comes to public relations, most people think that it involves press releases, marketing, and the image that the specific organization presents to the media. However, if you flip this term, you will gain a much more accurate picture of what this industry is really about.
Dispensaries must relate to the public, but not just through the channels listed above. Knowing what both your proponents and opponents think is important but, what's even more vital are the opinions of those who've yet to pick a side. If you would like to sway them to your point of view, you have to make every effort to understand their perspective and respond in a way that they will listen to.
Framing (or spin) is a vital concept here. This is usually considered to be a bad thing but it’s all about perspective. Selling the public on cannabis comes down to how you package it i.e. branding. For instance, using cannabis or marijuana in the name of your dispensary may seem trivial to you, but it may make the difference between whether your chosen community accepts the business or not. Words like marijuana, pot, and dope carry negative connotations to some people.
You must do everything you can to remain on good terms with your neighbors because just one complaint can land you in hot water. Thankfully, it's possible to use events and conferences to cultivate and maintain good relationships with the members of your community. Not only are these venues great for showcasing the benefits of your business, they also provide a great opportunity for you to network and make connections, which is excellent for raising the profile of your business.
You should also consider finding a physician to sit on your board of directors. This will help provide assurance to the community that your dispensary isn’t a drug-dealing shack.
Challenge #3: Sales and Marketing
Every business owner wants their venture to succeed. But, when dealing with this industry, you must understand that things can get a little complicated.
Cannabis dispensary operators are not privy to many of the advantages that most retail shop owners can use. For instance, getting a loan from a bank to finance a dispensary isn't usually an option, which means that you will have to deal with many of the expenses yourself.
Because a cannabis dispensary is essentially a retail business, you must do everything that is required of such a venture. You have to understand price options, cost projections, and basic display marketing. You should also have an inventory tracking system, a point of sale system and payroll and accounting software. Furthermore, this particular retail business deals with patient information. Thus, you will have to meet all the requirements of a medical office as well. For instance, you will need a system that protects and manages confidential information.
All these requirements equal to money going out the door, albeit for a good purpose. And, with all this money being spent, how can you recoup your losses? The most obvious answer is probably to sell more cannabis. But, while cannabis has many benefits and the knowledge/services that dispensaries offer are very valuable, you don't want to end up in a position where you are encouraging people to use more medicine than they should.
What's more? You can't market everywhere - even the internet places limitations on your advertising practices. For instance, Google and Facebook either restrict or flat out don’t allow ads for businesses in the cannabis industry. But, there is good news to be had. There are a large variety of cannabis friendly apps and sites where you can market your wares. Consider advertising in these places and at doctor's offices who provide marijuana recommendations to help boost your revenue.
The Bottom Line
While there are a number of challenges that come with opening up a dispensary, you have to remember there are a lot of rewards as well. To minimize any headaches, you must remember that preparation is key. Taking heed of the above three challenges will go a long way in ensuring that you remain on top and are not overwhelmed by obstacles.
Written by Essence Vegas
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