How to Open a Dispensary

Posted on April 1st, 2022 to Cannabis

At this point in time, only 5% of people in the U.S. do not live in a state that has either medical cannabis or full legal recreational. This means a lot of opportunity for people who want to get their own piece of the green rush. Ever wondered what’s involved in opening a dispensary? Here’s a guide to get you started.

Looking for state-by-state help? Take a look at our state-specific guides below…

Get Funding

While seemingly obvious, you will need to be able to fund your dispensary venture. This can sometimes be a difficult task as banking laws are different when it comes to cannabis. Since cannabis isn’t federally legal, federal banks will not provide loans to cannabis businesses.

In the meantime, cannabis businesses should look to private investors or support from family and friends. While not ideal, private investing is the only real option until cannabis becomes federally legal.

Start Your Business Plan

In many ways, a dispensary is just like any other business. As such, you’ll need a business plan that can guide your actions and show investors that you have done the necessary research.

Where do you plan on opening your dispensary? Is it close to the highway? Is it near a state border? How do you plan to accept payment? What type of products will you carry? Which POS system will you be using? Where is your funding coming from? Is it stable?

The business plan is a great place to outline every part of your business. It can help sort out future problems, provide a proposed direction and much more. Need help getting started? Here’s an awesome guide from HubSpot.

Identify Location Needs

Area

When you are applying for a license to open a dispensary, you’ll probably have to provide a prospective physical location. When choosing a physical location, your first priority, of course, is ensuring that it is legal to operate there. See if your state has restrictions regarding proximity to schools, as well as any other relevant zoning concerns.

Aside from legal constraints, consider these additional suggestions:

  • Adequate parking for pick up and walk-in customers
  • Visible by drive-by traffic and easily accessible from the road
  • Near high traffic areas (food spots, gyms, etc.)

Dispensary Design

The aesthetics and style of dispensary architecture have a significant impact on consumer perception. Is your dispensary going to be just that? Is your dispensary going to be an experience?

A dispensary:

  • Stop in, buy weed, leave

An experience:

  • Thought out interior design
  • Shows off cannabis products
  • Provides expert cannabis guides
  • Niche & mainstream cannabis selection

It’s not enough to “sell weed.” Dispensaries are businesses, and real businesses require the necessary thought to be successful.

Get Creative with Your Marketing Plan

Simply having a storefront for your dispensary isn’t enough–you have to market it! For cannabis companies, advertising options can be very limited. Vague content policies on social media, restricted channels for paid advertising, and state regulations that restrict sales and promotions can make it difficult to stand out. So how will your dispensary reach new customers? Here are some things we’ve seen success with for our clients:

  • Developing a memorable and impactful brand and logo
  • Engaging with local vendors and organizations
  • Using their website as an online storefront
  • Utilizing SEO strategies to drive the right traffic to their website
  • Educating their customers to promote brand loyalty and support larger basket sizes
  • Controlling their messaging through email marketing

1. Build Your Brand

Build an awesome logo & brand that is true to the persona of the dispensary you’re building. Here are a few things to think about:

  • Use colors that reflect specific moods
  • Identify the font(s) you’ll be using in your marketing assets
  • Design a scaleable logo with secondary and tertiary applications
  • Create branded digital assets aside from your logo.
  • Take photos that represent your target customer.

2. Design Your Website

Design a website that reflects your brand and personality. Here is a list of things to focus on as you design your website:

  1. Keep it simple!
  2. Strive for mobile-friendly (responsive) design features
  3. Make sure to use an age verification tool.
  4. You’ll need a menu platform.
  5. Easy navigation and information architecture for search engine optimization (SEO)
  6. Different Types of Pages (products, blogs, locations, etc.).
  7. A newsletter sign-up form.
  8. A content-filled blog.

Learn: Dispensary Website Design Guide & Top 5 Best Cannabis Dispensary Websites (2022)

3. Plan Your Digital Marketing Strategy

Now that you have a website, now it’ll take some work to show it off. Here’s a general outline:

4. Use Billboards/Community Partners

As we know, digital marketing for dispensaries is difficult. Restrictions this, regulations that… it’s easy to get mixed up. Here are ways dispensaries are marketing without using digital platforms:

  • Buy billboard ad space in strategic locations (highways, state-bordering towns, etc.).
  • Partner with local businesses to incentivize visits to each location (look at local restaurants, yoga studios, etc.).

Read More: Dispensary Marketing Guide 

Think Strategic Branding & Design

Building your brand? Consider your target audience and your messaging.

People will gravitate to stores that speak to their needs and interests. Are you going for a wellness-based approach? Or do you want to apply to connoisseurs with a craft approach? At a minimum, your brand should speak to the vision you have for your company and communicate that to your desired audience. Key brand components:

  • Logo with variations to apply to different uses
  • Color palettes, fonts, and usage guidelines
  • Mission and value proposition
  • Cohesive appearance and messaging

Know Your Legal Needs

The dispensary application processes change from state to state. First, review the applications in your state. You should make sure that you, any partners or investors, and any staff you’d like to have can pass a background check. Cannabis businesses are subject to more complicated restrictions than most other forms of business.

Then, get the paperwork going. There are many steps through the court that are required before any cannabis dispensing happens. It’s always a good idea to consult an attorney in your state that understands the laws and intricacies that make business formation so difficult.

Hire Personnel

In store

The passion and knowledge your dispensary conveys become the image your dispensaries portray in the minds of consumers. From managers and budtenders to owners, hiring the right people will make all of the difference. As your dispensary scales, you’ll need the same input and strong employee framework to be successful.

Production

Your state’s laws will come into play when it comes to sourcing your cannabis products. In some areas, retailers can be vertically integrated, which means that they can grow and process their own products. In others, you will need to make connections with licensed growers and processors in your state.

Even if you are able to cultivate your own, you will likely be unable to meet the demand for a wide enough variety of strains and products. Work with providers with strong established reputations, as well as those who are offering the products your prospective clientele will want.

Use Software & Operating Tools

You’ll need a…

  • Website (CannaPlanners)
  • Menu Provider
  • POS System
  • Email Marketing Service Provider (Klaviyo)
  • Inventory Software
  • Loyalty Program Software

You got this! We can help…

In most states, opening a medical or recreational dispensary is a time-intensive, expensive process. You will need great attention to detail at every phase to ensure that you are adhering to the laws in your jurisdiction. And, you’ll also want to be sure that you have a marketing and branding plan that bring in customers and ensure your success. With the right mix, you can secure yourself a place in this flourishing industry.

SEO Expert

This post was written by Zach Santarsiero, CMO at CannaPlanners.

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