First time running a cannabis dispensary? Interested in learning how to start a cannabis business?
Medical cannabis was first legalized in 1994, and now, in 2017 there are 750,000 medical cannabis patients in California. There are between 500 and 1000 dispensaries statewide. Roughly 500 tons of cannabis are consumed in California annually according to 2009 data from the State Board of Equalization.
The cannabis industry in California raises $109 million in annual tax revenue, and the industry was projected to experience a 70.25% growth in employment opportunities in 2015 alone. In short, the industry is booming. Now that recreational cannabis has been legalized, it’s the perfect time to join the green rush.
That said, make sure you do it the right way. While California and nearly 30 other states have legalized cannabis dispensaries, the laws regulating operations vary widely by county and city, even in California.
Governing the Operation of Legal Cannabis Dispensaries
Take Los Angeles, for example.
On Dec. 5, the Los Angeles City Council approved a package of cannabis regulations governing the operation of dispensaries, as well as non-retail cannabis businesses such as cultivators and manufacturers.
Most notably, the new regulations contained what’s termed as a “social equity” program. Simply put, the program prioritizes communities in Los Angeles that have historically been affected by the “war on drugs,” law enforcement crackdown that led to many people in Los Angeles being arrested for cannabis-related offenses.
Under LA’s new law, thought to be the first of its kind in the U.S., those cannabis business operators that meet the “social equity” criteria will be moved to the front of the line for license approval.
Such businesses would need to meet criteria, such as have low-income status, a cannabis-related conviction, or being located in an area that has had a high number of cannabis-related arrests.
Penalties of Up to $20,000 Per Day
Any cannabis business, “social equity” status or not, that’s found to be operating without a proper license would subject to heavy financial penalties of up to $20,000…That’s per day.
California’s largest cities — Los Angeles, San Diego, Long Beach, Sacramento, San Jose, Oakland and Davis – each have approved their own set of cannabis dispensary regulations.
In particular, San Diego has some of the most progressive laws and policies governing marijuana businesses and the cannabis industry.
By contrast, many of the state’s smaller cities have either passed laws opposing such regulations or have yet to take a stand.
For example, Santa Cruz welcomes cannabis sales. Palo Alto is opposed. Richmond, in the East Bay, is in favor. Antioch, its neighbor, is against.
Surprisingly, Marin County, long the rural bastion of New Age lifestyles, is a “no.” Eight of its 11 member cities are saying the same thing.
Amid all the contradictory laws and regulations, one thing is clear: It’s a confusing time.
Make Sure What You Do is Legal
So be careful out there. Wherever you intend to set up shop, make sure what you do is fully compliant.
On the bright side, you’re about to enter an industry that figures to be California’s latest economic boom, with the largest legal cannabis market in the nation.
Much like the craft brewing craze of recent years, all it takes to succeed will be a combination of this magic elixir: The highest-quality products, savvy cannabis marketing, strict attention to detail, and adherence to the law (which exists to ensure the safety of consumers and medical patients).
And, of course, more than a little good fortune.
Ready? Here’s what to do first
- Prepare a comprehensive business plan
- Secure sufficient funding and investors
- Hire legal, marketing and accounting experts
- Develop an in-depth marketing strategy
- Buy or rent in a suitable location
Now you’re ready for next steps
- Do your homework: Determine whether it is legal to establish a marijuana dispensary in your area
- Research local zoning laws: Make sure you’re located in a legally commercial zone with all required permits and approvals
- Become an expert: Know every possible aspect about your product and what your customers will pay for
- Figure out your customer’s persona: Who is he? Who is she? What do they want? What are they willing to pay?
- Price your product accordingly: Find out, quickly
- Hire responsible, reliable employees: Focus on knowledgeable candidates
- Obtain proper security: Don’t take chances
- Market your business: Whether it’s website promotions, social media posting, or putting together community events, get the word out about your cannabis dispensary brand
Do everything possible to maintain a respectable, lawful operation
- Do: Focus on carrying high quality, lab-tested cannabis products
- Do: Ensure your store is clean and aesthetically pleasing, with friendly and knowledgeable employees
- Do: Abide by all applicable laws and regulations
- Do: Keep meticulous records of revenue generated
- Do: Pay your taxes on time, and in full
Finally, don’t do anything that might jeopardize your opportunity to be successful in one of the most exciting business opportunities of our lifetime.
2018 will bring about some major changes for cannabis businesses in numerous cities and counties, especially in California. Don’t get caught without a comprehensive business plan and cannabis marketing strategy in place.
Get in touch with us now at 4Blooms for a custom cannabis marketing and business plan that boosts your sales and performance.
As San Diego’s first cannabis-focused marketing agency, we are continually expanding our services to bring success to more and more cannabis businesses. Act now — the competition is already starting!