How to Start a Dispensary: The Essentials

Thinking About Starting Dispensary?

Licensing, marketing, and compliance, oh my! If you’re getting ready to start a cannabis business, you might be feeling like it’s much easier said than done. By now you’re probably staring down a list of financing issues, complicated planning, and licensing uncertainty. Oh yeah– I’ve been there!

Read on to learn some practical tips on how to start a dispensary. We’ve boiled it down to the bare necessities.

How to Start a Dispensary

You’ll Need A License

Legal, compliance, and licensing issues will be your main hurdles to starting a cannabis business. Take these seriously and get as informed as possible. First, you’ll need to do everything you can to get a license. 

Licensing requirements vary from state to state. While you can apply all year in some states, there are plenty that will accept applications during set time-frames. In California, the organization you’ll get the license from varies, while in Michigan there is only one regulatory body: The Department of Licensing and Regulatory Affairs (LARA). Do a deep dive with Google search to find where and how to get a license in your state. The type of license you’ll need will depend on location and type of cannabis business. 

As a cannabis retail front, you’ll need to show that you can provide security services and of course product. There are some additional legal requirements inherent with any business that you’ll need for your license. These include:  

  • Incorporating your business: You’ll need to have a business formation (sole proprietor, LLC, etc.) and all your incorporation paperwork filed.  
  • DBA Filing: Your “Doing Business As” Name is simply the name of your business. Filing your DBA allows you to name the business something different from your own legal name. 
  • General Business License: In addition to a cannabis business license, you’ll need a general business license authorizing you to operate in your state. 

Get Help Keeping It Legal

Next, you’ll need some outside help to make sure you’re doing everything on the up and up. Most websites recommend hiring an experienced cannabis attorney to help you with all of your legal needs. Legal issues in cannabis are incredibly complex, and like the licensing process, vary from state to state. 

Chief Strategy Officer for The Blinc Group, Arnaud Dumas de Rauly, has this to say on the imperative of knowing the rules, and following them: 

“The cannabis industry is new and not yet fully regulated, making it very important for people entering the space to get in touch with their local institutions and industry groups and follow their guidance wisely. The vaping industry was in a similar position a few years ago, and it’s now facing huge regulatory challenges, some specifically caused by entrepreneurs that didn’t take the time to do things right when first setting up their businesses, such as not acquiring licenses, using bad branding, labeling, and sales channels, and marketing to children.  For the cannabis industry to grow properly, it’ll need to avoid giving extra ammunition to regulatory agencies and opposition groups that seek to destroy it.” 

The only way to succeed in the cannabis industry is to learn the laws of operation, follow them, and always take compliance seriously. If you cannot afford a lawyer, check out for advice without the hefty retainers. A lawyer will be a large chunk of the startup costs of a cannabis business. 

touCanna offers State Integration in its Compliance function, which will keep you on the up-and-up.

Finance Your Cannabis Business

Remember the security guards and large product lines I mentioned? You’ll need to pay for them and many other cannabis business startup costs–and you won’t be able to pay for it all out of pocket. This means you have to garner outside funding for your business. 

How do you go about gaining funding? Have a few critical documents done and be ready to make your pitch over and over again. The main document you’ll need is a business plan. While the individual pieces of a business plan go beyond the scope of this article, it requires research, deduction, and planning. You’ll need to have financial projections, a summary of your business, research on who your customer is, and much more. 

Then, you’ll be looking for cannabis investment groups. A general investment group may not be willing to take on the risk associated with a cannabis business, but a cannabis investment group specializes in taking on this risk. The bank will not be your friend. They are also risk averse. 

So, focus on private investors, cannabis investment groups, and never be too proud to get on or Thinking outside of the box is necessary in an industry so fledgling as cannabis. Get your business plan, PowerPoints and documentation in order (you’ll want to show you’re close to getting a license) and come up with a ten, thirty and sixty minutes long version of your presentation. In your pitches, you’ll essentially be presenting the business plan. 

Market Your Cannabis Business

We’ve heard it said– a business without marketing is just a wish. While many local and ecommerce businesses can get away with just running Google and social ads, cannabis is prohibited from using these channels. You’ll have to think differently (I hope you’re sensing a pattern here) and try some unorthodox things, from social media to social influencers and everything in between.  

If you’re not able to handle the marketing yourself–and you’ll be so busy that you will not be able to–consider finding a consultant. A marketing consultant will most likely be the most affordable consultant you’ll take on (a lawyer will not). Search for them on cannabis industry directories, do a Google search, or get a referral. 

What you’ll look for in a marketing consultant will come down to what you’ll look for in your business, and in your marketing. Do you feel you need a strong brand, or a strong website? Search for the agencies that specialize in those facets of your business. Do you want practical solutions with measurable results? Find a marketing consultant who can prove their track record with case studies and statistics. 

It comes down to finding someone you’re comfortable working with, who you can afford and who can do what you’re hiring them for. Try to inform yourself of popular marketing tactics and trends so you can gather an idea of what you want and guide your consultant to achieve that. 

touCanna’s  Dispensary Operations Management Software (DOMS) provides help with marketing in the form of loyalty programs and surveys and customer feedback.

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touCanna is a dispensary operations management software that combines all operations in one place.

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