How Much Money Do I Need To Start A Marijuana Dispensary in the US?

Many US states voted to decriminalize marijuana in the 2020 elections, with the growing demand for marijuana, starting a marijuana dispensary is a viable business idea.

Different things determine the cost of starting a marijuana dispensary, but mostly it is down to the size of the dispensary, and the range of products.

The cannabis industry is super competitive. You have to have a creative approach and perseverance before your business becomes profitable.

Depending on your state, getting licensed can be a major challenge. There are too many laws and regulations you must be compliant with before you operate a marijuana business.

Tips for Starting and Operating a Marijuana Dispensary

First off, check to see whether marijuana is legal in your state for medical or recreational reasons. Considering how resource-intensive a marijuana business can be, it’s not prudent to flout these laws.

You must perform background checks against all the people you want to collaborate with including investors and employees so that you’re not denied a license.

Ensure that you understand the laws around cannabis cultivation and sale as well as the laws that will take effect in the future.

Some of the things that would surprise you are that in certain states, your marijuana business is restricted from having proximity to institutions like churches, schools, and residential zones.

Ensure that you have a business plan, so that you may see many things that aren’t so obvious, and so that you eliminate mistakes during launch and operation.

Make sure you’re precisely aware of what your budget is worth. The idea is to stretch your dollar as hard as can be.

Make your research to see what services you can substitute with technology and save money.

The Cost of Opening a Marijuana Dispensary

Generally, starting and operating a marijuana dispensary usually requires more resources than the average small business.

1. Licensing

Before you start a marijuana dispensary you need a license, and operating without one would be taking too much risk. The ease of getting licensed typically varies from one state to another. Fees related to licensing might be anywhere from $1000 to $10000.

2. Real estate expenses

You must take your time when looking for the perfect location for your marijuana business. Ideally, the premises must be highly-visible and have great foot traffic. Renting these strategically-placed locations might cost you up to $100K per year.

3. Operation costs

Once you’re through the initial hurdle of getting licensed, you also need to regularly pump money into your business to ensure that customers don’t suffer any inconveniences. You have to have money for various installations too.

4. Staffing

The number of staff members you require depends on the size of your business. High-traffic marijuana dispensaries require a greater number of employees than small-time dispensaries. But also remember certain technology exists to minimize hiring people and enable you to reallocate funds.

5. Security

When you have a marijuana dispensary, expect to attract undesirable people (thieves), and you had better invest in foolproof security. The expense is determined by the type of security you have. Hiring guards is more expensive than installing surveillance systems.

6. Marketing

The marijuana market is slowly getting crowded, and you have to have a special angle to stand out. Marketing enables you to build brand awareness and attract your target customers. You have to have the perfect marketing system or else it becomes a tremendous money drain.

7. Sponsorships

It’s not mandatory that cannabis businesses sponsor events, and even though sponsorships might be expensive, the returns are usually well worth it. Your brand becomes a household name and it enhances customer loyalty.

You Need Anywhere from $200K to 1M

The amount of money you require to start and operate a marijuana dispensary is mainly determined by the size of your business. The cost may be between $200K to 1M.

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