As cannabis reform barrels ahead like a freight train, entrepreneurs everywhere are eyeing ways to get in on the green rush. And for those without the background or interest in cultivation or manufacturing, cannabis retail can be a very alluring — and lucrative — prospect.
Of course, that’s not to say there won’t be work involved. Just like any other business, opening a cannabis dispensary requires a lot of planning, paperwork, and, of course, capital. It also requires a lot of additional compliance hurdles not often encountered in other industries.
Today, we’re looking at the seven essential steps you’ll need to address as you seek to launch your own cannabis retail venture.
Seven Essential Steps to Opening a Cannabis Dispensary
Find a suitable location.
While it might seem counterintuitive to talk about location before licensing, the fact is that in most jurisdictions, you’ll be required to have a prospective retail location identified before you can even begin filling out the licensing paperwork.
Naturally, your dispensary location will have to align with all applicable regulations, including local zoning ordinances and state-level mandates. Researching your state’s guidelines shouldn’t be too difficult, as most maintain a checklist on their official government websites.
Obtain a cannabis retail license.
This step is easier said than done — but in the end, no license means no dispensary. Each state has their own cannabis retail licensing and application structure, so once you’ve locked down a potential location, you’ll want to begin researching the requirements and getting all the paperwork in order.
Obtaining a license may take up to a few months, so you’ll be able to work on the other components of your dispensary as you work through the licensing process. But you definitely want to know exactly what you’re up against as early as possible.
Estimate your costs.
The total cost of opening a cannabis dispensary varies greatly by state and local jurisdiction. Application and licensing fees alone can range between a couple thousand dollars up to $20k. Again, you’ll need to research your state and local permitting guides to find out exactly what you’re looking at in terms of licensing fees.
Other major cost considerations will include:
Physical location (real estate rental/purchase as well as renovation, furnishing, and finishing costs)
Professional fees (insurance, legal, financial, etc.)
Payroll
Capital investments (security/surveillance system, dispensary technology, etc.)
Write your business plan.
No serious investor is going to consider bankrolling your operation without seeing a solid cannabis retail business plan. Financiers want to know that you’ve covered all your bases, and your plan should address the following key areas:
Finances
Compliance
Dispensary staff
Sales and marketing
Logistics/operations
Security
Of course, detailed information about your planned location will need to be addressed as well.
Secure your capital.
As quickly as the industry is progressing, federal cannabis banking reform could be here sooner than later. But until then, cannabis-friendly financial services are still very hard to come by. That means your primary source of funding will likely be private investors, friends, family, or yourself. There are also some well-established cannabis-specific investment groups out there that are worth looking into.
Consider your dispensary technology needs.
As a cannabis dispensary owner, you’re going to need a technology solution that not only keeps up with the typical retail performance burdens but also satisfies your state’s compliance requirements — in other words, seed-to-sale reporting.
Compliance reporting (a platform that can tie in directly to the state’s system and automatically report all necessary data can save you untold time and labor costs)
Reliability
Ease of use
Determine your product sourcing procedures.
Finally, you’ll need to determine how you’ll source your products. This is another area that you’ll need to reference your particular state’s rules and regulations on; some states prohibit dispensaries from being involved in cultivation, and others highly encourage it. Either way, you’ll likely have to obtain a separate license if you want to get into cultivation.
Start by identifying and interviewing local cannabis producers. This is also a good opportunity to determine the types of products you’ll want to offer and ways you can incorporate them into your marketing.
Want to Learn More about Opening Your Dispensary?
Get a more in-depth look at everything involved with launching your own cannabis dispensary by downloading our How To Open A Cannabis Dispensary e-book — it’s absolutely free.
Gary leads Cova’s charge into the legal cannabis space by guiding the vision, strategic development, ‘go to market’ plans and culture.
Before joining Cova, Gary was a principal in over a dozen tech start-ups in the mobile communications industry ranging from small VC funded companies to Fortune 100 firms, including Onavo, which was later acquired by Facebook. In those companies he led sales, marketing, business analytics and market expansions. He has also held a multitude of leadership roles with Verizon and AT&T.
Gary holds a degree in finance with a master’s in marketing from the University of Colorado.
Member Blog: 5 Things You Can Do While Waiting for License Approval
Your state passed a cannabis legalization bill and licensing applications are underway! Hooray! Now, you’re gearing up to start your canna-business. With your business plans in-hand and your application sent in, the fee paid, there is nothing to do now but wait… or you can prepare. These 5 steps can help ensure your business is ready for a successful, stress-free opening day, and beyond.
Find Solid Employees
It’s important to look for candidates, if not expressly experienced in the cannabis industry already, to at least have transferable skills; anything from customer service to professional horticulture. It’s also helpful to look into the less-obvious employee options, as in, not just growers and budtenders.
Considering the amount of technology licensed cannabis operations requires, whether it’s maintaining your dispensary point of sale hardware, or ensuring your lights are properly wired to your timing system, IT and technology professionals are vital to any well-run business.
Hiring a cannabis compliance officer can be another vital employee to consider while defining the ideal operational structure. Finding a solid compliance officer isn’t an easy task – it takes an individual who has in-depth knowledge of cannabis compliance and regulations. Not only that, but finding someone who is a problem-solver and understands how to navigate even the murkiest of regulatory waters will be essential in growing across U.S. and international borders.
Develop Your SOPs
Standard Operating Procedures (SOPs) serve as the backbone of your day-to-day operations and define how employees can stay compliant while performing tasks, outline safety and regulatory requirements, and construct standardized steps to comply with cannabis business regulations. Implementing those steps and enforcing them creates consistency from employee to employee, even in the event of turnover and new hires.
Find a Software System that works FOR You
Whether you’re a grower, manufacturer or dispensary, you’re going to have to rely on a track and trace software to keep you compliant and keep your operation running smoothly. It’s important to find a software system that works FOR you, not the other way around. Many cannabis software solutions have rigid workflows and limited functionality, which leaves you with no other choice than to operate in a way that syncs up with the software. Others offer flexibility and can be customized to match your process.
Establish Your Brand
From logos and overall design to messaging and developing a social media presence… as Jeff Bezos says, “Branding is what people say about you when you’re not in the room.” With hundreds of other canna-business out there trying to make a name for themselves, developing a strong brand has become vital in the cannabis industry. Outstanding products have come and gone, so differentiating your business in the market can be the difference maker. As the embodiment of essentially everything your business does and represents, developing a solid and unique brand identity will take plenty of thought, and plenty of time.
Keep Track of Compliance in Your State
Do you know the ins and outs of cannabis compliance in your state? If you’ve already sent in your license application, odds are you’ve mostly wrapped your head around it. But understanding it and maintaining it in your day-to-day operations are two different things.
Each state has unique cannabis laws, which as we’ve seen many times are subject to amendments. It’s up to businesses to stay up-to-date on your state’s regulations and any potential changes to them, as well as keeping your operational workflows up to speed. Keeping smart on the proposed, and sometimes implemented regulations, will enable you to stay ahead of compliance changes and implement swift changes to address them.
It can be frustrating the pace at which the cannabis industry progresses, but as one of the fastest growing and emerging industries in the world, the one thing you can’t afford to do is tread water. There’s always something you can do to prepare so when you do open your doors, you’re already 10 steps ahead of your competition.
Leading the sales team at BioTrackTHC, Steve Flaks has helped to establish the company as a leading cannabis software provider operating in over 2,000 business locations. Mr. Flaks has been featured in a variety of industry panels and publications as a subject matter expert surrounding licensed cannabis operations discussing topics including SOP’s, operational workflows, cannabis software, and seed-to-sale compliance.
Cannabis Industry Sector: Information Technology and Software
NCIA Member Since: July 2016
Tell me a bit about your background and why you launched your company?
My name is Joel Milton and I am the co-founder and CEO of Baker. I’ve spent the last 8 years in the software industry, and have been working with my co-founder and Chief Product Officer, David Champion, for that entire time. Our third co-founder and CTO, Roger Obando, has been a developer for the past 20 years.
The three of us got interested in the cannabis industry in 2014 as adult use was rolling out in Colorado. We saw an opportunity to bring our years of software expertise to the industry as it was coming out of prohibition. We knew there would be a lot of issues specific to the industry, and we saw there were few entrepreneurs with technical backgrounds trying to tackle them.
What unique value does your company offer to the cannabis industry?
We proudly boast that we are on the dispensary’s team.
The Baker team at Representative Jared Polis’s fundraiser. Glenn McElfresh (Business Development) David Champion (Co-founder and CPO) and Roger Obando (Co-founder and CTO)
When we first started, we saw vendors come to the industry to take advantage of dispensaries. They had a misconstrued image of cannabis businesses: safes full of cash, lines out the door, and that businesses couldn’t stock shelves quickly enough. As a company that only serves the industry, we understand real issues like 280e, marketing restrictions, and constantly changing regulations. Due to these misconceptions, many of the early players were charging outrageous fees for basic services (like 10 cents for a text message vs. 1 cent for ours) because few companies were willing to work with dispensaries to begin with.
Additionally, everyone in this space was competing for the same end customer – trying to get them to their dispensary, download their app, go to their website, etc. We saw a dangerous “race to the bottom” on price, and realized there was an opportunity to help dispensaries engage with their customers directly.
Today, we help more than 500 dispensaries in 14 states build their brand, connect with customers, and generate more revenue. We are on the dispensary’s team and our goal is to make them have more successful businesses. We are a true business to business cannabis tech company, and we take pride in showing our clients the ROI they see by using our platform.
Cannabis companies have a unique responsibility to shape this growing industry to be socially responsible and advocate for it to be treated fairly. How does your company help work toward that goal for the greater good of the cannabis industry?
We have been NCIA members for over a year now, and have made sure to contribute not just money but time as well. We send our regional reps to quarterly NCIA caucuses all over the country to keep a pulse on local and national initiatives to see where we can help. We also try to attend and sponsor cannabis events in the regions where we operate and beyond.
In the next month we will be attending events on both coasts, and at a few cities in between. We will also have a booth at the California Cannabis Business Conference (booth 204) if you will be there please swing by our booth or send us an email (marketing@trybaker.com) to set up a time!
We take pride in the professionalism we bring to the industry, and are constantly bringing a mainstream approach to the way we operate – from hiring people out of Fortune 100 firms into the industry, to building quality software products that’s on par with anything coming out of Silicon Valley. Our toolset is uniquely specific to help cannabis brands and retailers run better businesses. We have been approached by retailers in other industries, but our entire focus is on cannabis.
We also work with mainstream investors – many of whom are getting their first exposure to cannabis. It has been such a rewarding experience to promote the industry to influencers who can propel the industry forward with investment and leadership.
Lastly, we also are proud to have brought a lot of public and positive press to the industry. In the past year we have been featured in publications like Business Insider, Forbes, Fast Co, and dozens of others. We position ourselves as a professional company, creating jobs in our headquarters of Denver. We have 35 full-time employees and counting!
Our exposure in the mainstream media has helped millions of readers from around the country learn about cannabis in a more positive light. They can see that there is a large degree of professionalism in the industry and that it would not be a bad thing if it came to their backyard.
How do recent advances in technology, and how we use it, impact the growth and direction of the cannabis industry?
We believe this is a big industry and we have a responsibility to enhance the cannabis ecosystem – when companies cooperate, the sum is greater than its parts.
We are proud of the integrations we have with fellow members of NCIA. We work with POS companies like MJ Freeway, Green Bits, Treez, and Flowhub, as well as data companies like New Frontier (we contributed to their Report earlier this year).
Additionally, retailers across all industries have invested a lot in bringing their shopping experience into the digital age. Cannabis retail should be on par with other shopping experiences, and by providing beautiful, easy to use products, we can help make cannabis more accessible to a larger audience.
We are proud to bring retailers a modern experience that has been called the “shopify of cannabis.” We enjoy hearing stories from our clients about how our products have helped customers see that the stigmas around cannabis shopping are dissipating.
Baker at NCIA Lobby Days. Eli Sklarin (Director of Marketing) Carter Davidson (VP of Sales) Joel Milton (Co-founder and CEO) and Geoff Hamm (COO).
Why did you join NCIA? What’s the best part about being a member?
We are big believers in NCIA, it is an important group with a fantastic mission. I went to Lobby Days along with our COO, VP of Sales, and Director of Marketing. We were all impressed with how organized the experience was.
There is something special about getting the cannabis conversation started with influencers. Most staffers would be hesitant to bring it up, but if you go in-person and inspire confidence in the industry, you can watch the ball start rolling and it was very rewarding to be a part of that.
It’s fair to say that most businesses will have a higher rate of success when they utilize tools designed with their industry in mind. Running a retail operation in the cannabis industry is no different. In fact, the success rate is likely much higher due to the strict regulations put in place by states to address diversion, public safety and health concerns.
With that in mind, I think it’s safe to say that a cannabis point-of-sale system is one of the most important investments a retail operation will make when opening a dispensary. The right point-of-sale system will not only help operators maintain compliance, but it should also save time and money by providing inventory insight, maximizing sales per customer, and seamlessly integrating with other technology.
In addition to streamlining operations, dispensary owners should also feel confident that customer information is secure, and that fast transaction time is maintained even when traffic is heavier than usual. At the end of the day, your cannabis point-of-sale system should work for you.
Let’s be honest, today’s market is crowded. Dispensary owners now have more than 40 point-of-sale options that promote their ability to optimize operations, acquire new customers, and maintain that customer base. But there are only a few key players who do well in this space, and each of them has pros and cons.
As the industry grows, we want dispensary owners to know that not all cannabis point-of-sale systems are created equal. It’s critical that you take the time to examine each tool to determine what will work best for your operation, be it full vertical or one dispensary location.
That’s why my team and I created a guide as a primer on point-of-sale tech for both new and veteran dispensary owners. We’ve researched information from across the spectrum and organized it into categories to help you navigate this major piece of the dispensary ecosystem.
Gary Cohen, CEO of Cova, leads Cova’s charge into the legal cannabis space by guiding the vision, strategic development, ‘go to market’ plans and culture. A Denver native, he recently moved back to establish Cova’s HQ there. While he joined Cova only a year ago, he was a successful business partner to Cova’s parent company since 2011.
Before joining Cova, Gary was a principal in over a dozen tech start-ups in the mobile communications industry ranging from small VC funded companies to Fortune 100 firms, including Onavo, which was later acquired by Facebook. In those companies he lead Sales, Marketing, Business Analytics and Market Expansions. He has also held a multitude of leadership roles with Verizon and AT&T for the first 15 years of the wireless industry.
Gary holds a Degree in Finance with a Masters in Marketing from the University of Colorado. In his spare time Gary enjoys skiing, mountain biking, outdoor sports, travel and comfort food.
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Gary leads Cova’s charge into the legal cannabis space by guiding the vision, strategic development, ‘go to market’ plans and culture.
Leading the sales team at 
Baker Technologies
