Cannabis Retailer Guide For Starting Your Own Dispensary

Perhaps you’re one among the many entrepreneurs rushing to open a dispensary. As more states allow the selling of recreational marijuana, the number of business prospects will grow. It’s no surprise that cannabis is today’s gold rush (or “green rush” if you’re feeling particularly dadish), with tremendous profit margins and a largely insatiable consumer market. In fact, the value of the cannabis business is predicted to treble to almost $30 billion by 2025. This will be exacerbated by the increased use of CBD.

However, opening a new dispensary is a difficult undertaking. It’s expensive to get started, with the average dispensary costing $775,000 to open. It’s also strictly regulated, so business owners must make sure to buy weed online and have all of the necessary permits and licenses. If you don’t have them, you’ll face significant fines or perhaps the closing of your store. And, while we’ll go through some of the essentials of how to open a dispensary in this blog article, because of the legal ramifications, you should get legal advice before getting started. This guide should hopefully get you started and motivate you to learn more about the first steps to opening a new cannabis retail store.

  • Plan Your Financials and Hire a Great Dispensary Team
  • Locate an Appropriate Location for Your Dispensary
  • Make a business strategy.
  • Select a Legal Entity
  • Create a state and federal tax system.
  • Open a business bank account and credit line.
  • Obtain all cannabis-related licenses, permits, and insurance for your business.
  • Promote the Grand Opening of Your Cannabis Shop
  • Create a website and an online presence for yourself.

1. Put together a fantastic dispensary team.

Retail employs millions of people in the United States. It’s not always easy to discover the right fit for your store because there’s a lot of demand for exceptional retail staff. To staff their stores, all merchants search for people that are diligent, passionate, and relatable. This is particularly true in the case of dispensaries. Members of the team must have a keen eye for detail, in-depth understanding of each product, adherence to strict cannabis legislation, and the capacity to customize the shopping experience for each customer. Consider the following when looking for the perfect team to operate your dispensary:

Employ a variety of hiring methods.

Start by revamping your website to make it easier for people to apply and to make it obvious what types of positions you’re searching for. This should not be a criterion for eliminating candidates. Keep it simple, keep it up to date, and include important details.

Dispensary owners should also hunt for applicants on other sites. You should use technologies to reach a bigger audience because not all of the finest new hires will find you. Make use of third-party job search and headhunting websites. Include critical information in these postings, just like you would on your website, but don’t make them too long or frightening.

Prepare for interviews in advance.

Interviewing is a dreadful experience. Both sides will benefit. You should, of course, expect all applicants to prepare, so you should as well. Make sure you can articulate exactly what you’re looking for in a team member at your dispensary and define your company’s identity. It’s also crucial to be able to articulate each role’s responsibilities and expectations so that candidates know what to expect if/when they start the position.

Pose the appropriate inquiries.

Allow the interview to flow naturally, as if it were a conversation rather than a stiff, official event. Allow enough time for the interviewee to react thoughtfully and completely. Introduce them to other staff and management. A cannabis employee will need to collaborate closely with their coworkers. They’ll also be spending a lot of time in front of customers, so they’ll need to be well-versed in the things your store sells. Inquire about their favorite items to see how enthusiastic and informed they are.

Remember that dispensaries prefer to hire people that are outgoing, friendly, and enthusiastic. They’ll be the face of your company, and they’ll be in charge of how much you sell. Give this step the time and attention it needs as part of the process of starting a new dispensary.

2. Make a financial plan

Setting up your financial details and ensuring that you have a solid business in place is a less exciting part of launching a cannabis dispensary.

In reality, state rules require all new dispensary applicants to produce proof of capitalization as well as a particular quantity of liquid cash on hand. The greater the number, the better.

Opening a new cannabis dispensary is both difficult and costly. Entrepreneurs in most states will face stiff competition from other candidates. And the amount of cash on hand at the outset is sometimes a deciding factor in which enterprises get the essential permits and which don’t. Because most banks will not lend to dispensaries, the state will need to show that you have the necessary funds to get the business off the ground. In general, you’ll require a minimum of $250,000 to be accepted.

3. Locate a suitable location for your dispensary

Dispensaries, like any other retail store, must choose the best location. Cannabis retailers, on the other hand, face the extra problem of needing to follow additional regulations while locating their location.

Dispensaries cannot be located within 1,000 feet of a school, church, or community center, according to state regulations. They must also be housed in their own structure rather than being part of a strip mall or shopping complex.

You’ll also have to decide whether to buy or rent a building. When you buy a property outright, you have complete freedom to do whatever you want with it. However, dispensaries may face extra scrutiny and outright denial from property owners if they are operating under a lease. If you rent, it’s vital that you let the landlord know what you plan to do with the property ahead of time to avoid long-term legal issues.

Finally, when it comes to opening a retail site, cannabis stores will have to manage more traditional considerations. Parking, foot traffic, nearby businesses and competition, and overall busyness in the region are all factors to consider.

4. Create an effective business plan

The business strategy is the part that no one wants to deal with. It is, nevertheless, undoubtedly the most crucial phase in the process of establishing a new dispensary.

Begin by identifying your company’s goals and your dispensary’s mission statement. Do you want to focus on delivering high-quality medicinal marijuana or will your shop cater to recreational marijuana users? Do you want to help local citizens with steady jobs and income?

You’ll also need to get into greater detail about the products you’ll be selling and who you expect to buy them. Again, there is a lot of competition in the cannabis industry, so you must demonstrate to potential investors and state authorities how your company will stand apart.

You must also put out your operational, marketing, and financial strategies. These show that you have a good understanding of how your company will be structured, what employee remuneration and perks will be, how you’ll hire, and so on. This shows your initial strategy, as well as contingency in case things don’t go as planned.

However, dispensaries require additional elements in their business plan:


This outlines where you’ll get your cannabis from and how it’ll be grown. Remember that cannabis sales must be documented along the supply chain, from seed to sale, therefore applicant assessors will want to know how you intend to grow the crop.


To protect soil, air quality, runoff, and other environmental factors, every firm that grows a cultivated crop must adhere to severe environmental rules.

Fire Prevention

Greenhouses and dispensaries are also required to adhere to all standard fire safety rules.

Inventory Management

As previously stated, cannabis sellers are required to trace each individual seed until it is sold. To completely comply with this, you’ll obviously require a large inventory management system. This is where your dispensary’s point-of-sale (POS) system comes in handy! KORONA has partnered with Dauntless to fully integrate with any appropriate tracking software, allowing dispensaries to track and report their product from beginning to end.

Product Security

Because you’re selling a consumable item, you’ll need to follow all safety precautions to guarantee that your customers are safe.

Staffing and security

Every dispensary is required to recruit security guards and a sufficient number of employees at any given moment. It’s critical to protect against theft because the commodity being sold may be prohibited in nearby states or counties.

5. Select a Legal Entity

Begin by notifying your local government of your business name and any DBAs. If you wish to trademark your name and prevent others from doing so, you’ll need to contact the United States Trademark and Patent Office to secure the necessary permission.

Copyright laws must also protect any intellectual property that your company owns. These can include creative work, product names or themes, logos, slogans, and more, in addition to your business name.

Dispensaries, like any other business, must register with the IRS to obtain an employer identification number so that employees can properly file taxes with their employer.

Finally, decide on your legal form. Dispensaries will typically have four options:

Sole Proprietorship – The most unusual for a dispensary of this size, a sole proprietorship means that the firm is owned and operated by a single individual.

Partnerships have many partners, but taxes are paid from personal income tax returns, just like sole proprietorships.

LLC – The most prevalent type of business entity, LLCs shield partners from some financial obligations.

Corporations pay taxes through the corporation rather than a single person or group of persons because they have no owner.

Set up State and Federal Taxes, if necessary.

Both recreational and therapeutic marijuana fall under this category. The FDA does not prevent medical cannabis from being taxed because it can only be advised, not prescribed.

As a result, cannabis sellers must apply a tax on each sale made through their point-of-sale system.

Cannabis taxes differ greatly from state to state, so check with your local authorities. This resource provides basic information on cannabis tax regulations in each state where it is legal for a quick glance.

7. Open a business bank account and credit line.

Traditional banking is unlikely to be an option in most circumstances. Cannabis is still illegal on the federal level, therefore banks have stayed aside so far to avoid potentially damaging legal battles.

Furthermore, opening a dispensary is a high-risk venture. The Federal Deposit Insurance Corporation insures banks against failure (FDIC). This safeguards both banks and their clients by ensuring that money will always be available when needed. The insurance is invalid if a bank deals with businesses that break federal laws. It’s improbable that lending to a dispensary will cause a bank to fail, but the risk is simply too great for them.

However, there are other options for obtaining finance.

Equity Investment in Dispensaries

The sale of shares is how equity finance raises money. A dispensary can sell shares of a firm in exchange for cash. This money is typically obtained through venture capital, angel investments, crowdfunding, or good ol’ friends and family. You can even try to seek funding from Snoop Dogg if you’re feeling brave. For years, his Casa Verde Capital has been lending to emerging cannabis businesses.

Debt Financing for Cannabis Retailers

Another alternative is to use debt financing. It is feasible to qualify for large personal loans or credit cards with big limits if you have good credit. Both come with a high rate of interest, making them unsuitable for many fledgling business owners.

As additional states legalize cannabis, the funding scenario is expected to change. Banks and other regular lenders will accept these loans after marijuana is legalized nationwide (though they may still be high-risk and difficult to obtain), offering new dispensary firms more options.

8. Obtain all cannabis-related licenses, permits, and insurance for your business.

Cannabis cultivation, manufacturing, sale, and usage are all governed by a plethora of laws. It’s also critical for business owners to follow all applicable city, county, state, and federal laws. Licensure, permits, and insurance are all important parts of this.

As of the end of 2019, 34 states, as well as the District of Columbia, Guam, Puerto Rico, and the US Virgin Islands, allow for the sale and consumption of medicinal marijuana. The remaining 16 states and territories have made it illegal to use marijuana.

Let’s go over some of the typical paperwork things you’ll need if you’re starting a business in an area that allows it:

Permission granted by the seller

Many firms require a one-of-a-kind permission to sell things in a certain niche. Cannabis is no different. This is where you should begin.


Most states provide temporary or permanent sales licenses. Permanent licenses are often need to be renewed every year.

Seller’s license for cannabis

Cannabis requires additional license in addition to a standard seller’s permit, which includes an application and annual payments.

a business strategy

Most states demand a business plan that includes the topics mentioned above. In other states, the business plan is required to meet even more criteria. Again, this is an area where you should get legal advice.

The permits and costs differ significantly. They can be as low as a thousand dollars in some areas and as high as tens of thousands in others.

To safeguard against common dangers, insurance is also essential.


This is required by landlords and states to safeguard individuals from losses or injuries caused by your business.


This insurance covers your product, equipment, and any other high-value items in your company.


In-store or on route during transit, dispensaries must protect against product loss.

9. Promote the Grand Opening of Your Cannabis Shop

After you’ve completed all of the difficult tasks, devise a strategy for pre-opening marketing and the grand opening.

Begin by registering your dispensary on all relevant websites, including any that are specifically for dispensaries. But don’t forget about Yelp, Facebook, Google My Business, and other sites. These are extremely important for increasing brand awareness and image. They also make it simple for potential customers to locate your store as well as any basic information such as reviews, pricing, and hours.

Make your grand opening a one-of-a-kind experience for your first-time customers. You want to express gratitude to those who come out on the first day, generate a large crowd, and urge them to return shortly. Measure your margins ahead of time using your point of sale’s inventory management and sales reporting software — you don’t want to provide a deal that is too good to be true.

10. Create a Fantastic Website

Finally, it’s critical to concentrate on creating a fantastic website for your business. Cannabis shops don’t require much, but it should have basic product information as well as store information.

Despite the fact that cannabis products cannot be purchased with credit cards, making internet shopping difficult, dispensaries should create online menus that allow remote buyers to pre-order items. This allows users to place an order online and pick it up later. It makes the experience more convenient by allowing them to skip queues.

The online menu should work in tandem with your POS inventory management system to ensure that all inventory listed as in stock on the website is correct. You don’t want customers ordering things you don’t have on hand. This is just another way that KORONA and Dauntless work together to deliver a truly all-in-one solution for our cannabi sellers.

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