The current “green rush” of legalized cannabis in many states has awoken the inner business owner in a lot of people.
As more and more states open themselves up to legalized marijuana retail, business owners from all over have been looking into what it takes to open their own dispensary, retail store, trim business, and the like. However, the realities of the cannabis business mean that a little more foresight and planning is needed than with many other businesses.
Marijuana retail is much more strictly regulated than even other types of controlled substances (like alcohol or tobacco), and even in states that have allowed for its sale, these regulations need to be followed to the letter. With as much time as it usually takes to open a small business, the need to adhere to these regulations can add additional time for planning and compliance.
Knowing the sort of timeline you need to successfully open a marijuana business – while avoiding the numerous complications along the way – can help you plan for a much smoother start.
Before starting: Plan to succeed
Before you really get into the weeds with your cannabis business, you need to ask a few questions of yourself – and of the area you plan to open in.
The first question should always be, how committed are you? As Bplans explains, understanding your own motivations, as well as your own ability to stick with the whole process, will be vital. Are you just in it for the money, or do you think your community can benefit from your business in some way, whether through the benefits of your product or the effect you may have on the local economy?
The second question should be, what are my local cannabis regulations? Even as legalized cannabis grows more widespread, the regulations from state-to-state – or even county to county in many cases – will be vastly different. Certain states such as Michigan already allow for legalized marijuana sales, whereas states that have ratified these laws more recently such as New Mexico may not allow for retail sales yet, or may not allow for sales of certain types of products. Understanding these requirements will go a long way towards making the rest of the process go smoothly.
Nine months out: Get licensed and find a location
From there, you’ll need to start planning on the amount of paperwork needed for your business, as well as the specific licenses you’ll need.
As mentioned in the previous step, each state will have different regulations. Canna Advisors explains that many states have differences in how they regulate the sale of marijuana – some states require you to only sell the products you grow yourself, others may require separate licenses for cultivation and distribution, and the like. By now you should have a good idea of what your business will specialize in, so this should give you plenty of time to apply for the proper licenses and understand what you need to fill out before continuing.
Getting licensed also means you’ll need to have a finalized location for your business (as the licenses may be issued in the business’ name in certain cases, and not your own), so make sure you have a storefront and other needed facilities picked out by now.
Six months out: Marketing and capital
Even with six months to go, your business should be taking enough shape that you can start to develop a plan to get the word out – and a plan to keep paying for it all.
Even if it’s a small local marketing scheme, making sure your new community is aware of your impending business and ready to get excited about your products is going to make or break your first few months. Reach out to other businesses in the area, see what you can do to get media attention (small local newspapers for example, or local radio stations are still powerful outlets), and make sure everyone knows exactly where you’re located, when you open, and what you offer.
By now, your financing concerns have probably started to become real as well. Even above and beyond any start-up investment, you’ll need to start understanding how you’ll handle daily business transactions, loan repayments, and so on. While a lot of banking solutions exist for businesses these days, it may be more worth your time to find an institution that specializes in cannabis banking. As Aery Group explains, the cannabis industry is prone to more potential audits and reviews than most, and finding a financial institution with cannabis experience could help prevent a lot of headaches down the road.
Three months out: Final inventory check
Hopefully at this point, you’ve dotted all your I’s and crossed all your T’s, and your business is nearly ready to go. This would be a great time to make sure your inventory, storage, and store equipment is all set for the big day.
Do you know where you’re getting your products from? Are you able to grow it in-house or do you need to get it supplied elsewhere – and, if so, do you already have an agreement in place? The lead times on cannabis can be tough to navigate, even for businesses who already have a supplier in place, and having a plan – and maybe a backup plan – will be crucial.
Furthermore, is your store equipped to organize and sell the products as needed? Cannabis storage is closer to something like food storage or pharmaceutical storage in the fact your shelves need to be safe enough to keep the plants alive, and secure enough to prevent them from being touched by anyone who shouldn’t have access to them. Companies like Applied Handling and Shelving Inc can offer specific cannabis storage options for various points along the growing/selling process – by using specialized marijuana storage, your products will remain safer and viable for longer.
After this is all in place, your business should be off to the strongest start it can be, and will be much better prepared for the various roadblocks that can – and inevitably will – arise.