The year 2016 marked a significant turning point for California, as it embraced the legalization of cannabis.

This landmark decision not only changed the social landscape but also paved the way for a surge in cannabis dispensaries throughout the state.

The sales value of legally sold recreational marijuana in California is projected to hit $6.59 billion USD by 2025 , a significant increase from $2.69 billion USD in 2016.

If you’re an enthusiastic future business owner with aspirations of establishing your very own cannabis dispensary, you’re in luck! We’ve put together an in-depth roadmap to assist you in getting your venture off the ground.

Planning a Cannabis Store – Follow This Step-by-step Guide

Start with thorough research

The first step is to learn more about the industry and familiarize yourself with the market and customer preferences.

You’ve got to be on a first-name basis with all the laws, rules, and regulations that California has laid out for this kind of business.

It’s like making sure you know all the house rules before you step into a new place – you definitely don’t want any surprises.

The industry being sensitive and having loads of rules and regulations set around it, you ought to be thorough in your research.

By the time you go to the next step, make sure to have a thorough knowledge of the industry.

This phase most importantly should consider competitive analysis. Look around at how your potential competitors are functioning and how they started out.

Take lead from them so you can avoid the mistakes they made.

Estimate the funding needed

The next thing on your to-do list is to figure out how much money you’re going to need. It’s a good move to get a solid grasp of this, so you’re not caught off guard by the financial side of things.

First off, you’ll want to get a clear picture of what the real estate costs will be, along with any expenses related to setting up the physical space.

Don’t forget about the fees for licenses and applications, the ongoing operational costs, what you’ll need to pay your staff, and the expenses tied to hardware and software. And oh, don’t overlook the taxes that will be part of the package.

Given that you’re just starting out, it’s smart to be ready for any surprise expenses that might pop up. It’s a good idea to have a little extra tucked away in your budget for unexpected emergencies.

Remember, having a solid estimate of the funding you need and being prepared for potential financial twists and turns will put you in a stronger position as you set out on this venture.

Apply for the Cannabis License

Before applying for the licenses, make sure you are fully prepared with the list of documents that you will require.

Make sure you have local permits, ownership and background information, government issues IDs, financial documents, personal tax identification number, social security number and all the other important documents needed to apply for the license.

Since there are heavy regulations on the Cannabis industry, the laws keep on changing.

Just make sure that you are familiar with the latest updates, so the licensing process is not delayed.

There are many firms in California that can help you procure your license and get through the entire process from start to finish. All you need to do is pay a fee to them and they take care of everything.

Suggested 5 firms for Cannabis Consulting in California

1. WeCann – Expert Cannabis Licensing & Business Consultants in California

WeCann provides a comprehensive range of consulting services for cannabis businesses that consists of everything right from obtaining licenses, locating legitimate cannabis real estate and properties, and ensuring strict adherence to all marijuana regulations.

2. Canna Advisors – Cannabis Business Consulting Professionals

Canna Advisors help support cannabis entrepreneurs in securing business licenses, fine-tuning facility layouts, streamlining operations, and ramping up business growth.

3. Point Seven Group – Cannabis Consulting

Point7 Group is a women owned firm that helps cannabis businesses right from cannabis operators and joint ventures in licensing services, dispensary design and operations, branding and marketing services.

4. Be Green Legal – Cannabis Consulting and Licensing Experts

With over a decade of experience, the Be Green Legal crew’s expertise extends beyond industry, covering areas like land planning, permitting, and staying on the right side of licensing rules. In an industry packed with regulations on where and how businesses can run, their skillset shines brightly.

5. 3C Cannabis Consulting – Cannabis Consulting Company

3C Cannabis Consulting works with you in crafting solid business plans, finding real estate that’s above board, crunching the numbers with financial models, setting up and following standard operating procedures that meet local, national, and even international standards. They are pros at facility design, forming partnerships across the globe, and navigating the process of snagging those essential cannabis business licenses.

Acquire the funding

In California, getting your hands on a dispensary license means shelling out $1,000 upfront for the application. Once you get the nod, the actual licensing fee falls somewhere in the range of $4,000 to a hefty $120,000. Yeah, that’s quite a spread and depends on how big your operation is on paper.

Now, don’t forget the real estate factor. Setting up shop in California comes with a price tag of around $50,000 to $100,000 a year. And let’s not ignore the other initial costs that’ll be knocking on your door.

The Golden State isn’t exactly budget-friendly in terms of living expenses, so when you’re hiring your crew, you’ll need to dig a little deeper into your pockets. Plan to pay your budtenders roughly between $30,000 and $40,000 per year, which is a tad higher than the national average.

Wrangling all these numbers together, the upfront investment for launching a dispensary here ranges from $80,000 to a quarter million dollars. Once you’re up and running, you’re looking at ongoing monthly expenses between $30,000 and $70,000.

Source: How Much Does it Cost to Open a Cannabis Dispensary?

It’s a big financial move, but with these digits in mind, you can navigate the dispensary game in the sunny state of California.

Suggested 5 firms for Cannabis Business loans in California

1. FundCanna – California Cannabis Loans

2. Canna Business Resources – Direct Lender in Cannabis

3. Mortage Vintage Inc. – Cannabis Business Purpose Loan Program

4. AVANA Capital – cannabis financing California

5. Diamond Business Loans – Marijuana Business Funding

Find the dispensary location

The importance of location can’t be stressed enough.

You are in for a challenge when it comes to locating budget-friendly real estate for your California cannabis venture.

Navigating through zoning laws can often feel daunting, making it quite the task to grab an affordable property for your cannabis operations. This could easily become one of your major expenses on the journey.

Access to a skilled workforce can be another critical factor that could affect the decision of your ideal location for cannabis store.

If you are eying a rural area for your dispensary, it could get a bit difficult. Though, the metropolitan locations offer decent enough options to get skilled staff of your choice.

Before you plant your flag, ensure your chosen location complies with the rules and regulations that mark an ideal dispensary hotspot.

Make sure to go through your tenant agreement thoroughly and try to get an expert to look at it before signing it.

And here’s a nugget of wisdom: If your license application is stuck in the approval pipeline, we advise you to negotiate for a contingency clause. This could be your saving grace if the city gives your operation the thumbs-down.

Choose the right Cannabis Distributor for quality products

Selecting the right distributor for your menu items is a crucial decision in establishing a successful operation. When you’re sourcing all the products on your menu, you want to ensure reliability above all else.

Transportation costs can quickly eat into your budget when dealing with distribution channels. Here’s where a local distributor shines. They’re the answer to your logistical concerns.

Why, might you ask? Well, for starters, they’re right in your neighborhood or city, so there’s no need to worry about long-distance shipping fees.

Local distributors often have established relationships with nearby suppliers, which can result in quicker deliveries and better prices.

Moreover, working with a local distributor can foster a sense of community and support local businesses, which can be a selling point for your establishment.

In essence, choosing a reliable local distributor is a smart move that not only helps streamline your supply chain but can also positively impact your bottom line and your community ties.

Suggested 5 Cannabis Distributors in California

1. Nabis — One-Stop Shop for Cannabis Wholesale

2. Talarya Brands

3. Humboldt Distribution Company – California

4. Emerald Supply | California’s Bulk Cannabis Distributor

5. Bear Humboldt – Bringing You the Best Cannabis Experience

Hire Cannabis Store Staff

The staff that you hire at your Cannabis store is going to determine the end customer is going to perceive your dispensary.

The kind and quality of customer service will be crucial and how your employees deliver it is to be taken into consideration.

Here are some of the top service providers in California who can assist you in hiring the best staff for your newly opened dispensary:

Suggested 3 Cannabis Staff Hiring Consultancy / Website

1. Marijuana Jobs Cannabis Careers – California Cannabis Jobs, California Employment

2. CannabizTeam – Cannabis Staffing & Executive Search

3. Vangst – Cannabis Jobs & Professional Network

Understand Compliance

Once you have opened up the dispensary, there are other sets of protocols or compliance standards that you and your customers need to follow.

In California, they’ve got this system called Metrc to keep tabs on everything.

So, there’s this Department of Cannabis Control that’s in charge of keeping an eye on the whole legal weed scene in California.

If you’re a grown-up in California, you’re allowed to buy up to 28.5 grams of regular cannabis, 8 grams of the concentrated stuff, and 6 baby cannabis plants every single day.

And if you’re using medical marijuana, you’re good to grab up to 8 ounces of the medical stuff each day.

So, remember, it’s crucial to be on top of these rules, even if your customers aren’t thinking about them.

Stay in the know!

Choose right technology for Cannabis Dispensary

The type of technology and vendors you collaborate with will play a big role in how efficient and successful your dispensary is overall.

It’s really important to make sure you’re starting off with the right kind of investment, or it could seriously affect how well your place grows and operates.

You’ll want to get a great-looking website that’s informative and encourages action.

The very first piece of tech you should investigate is the POS system. It’s crucial that it’s cloud-based and tailored to your industry. This way, you can better determine if it’s worth your time and money.

In addition, having a well-designed cannabis digital menu board solution and reliable accounting software would also be key.

A digital menu board would help you save a lot on redundant paper menu costs and accounting software will not only streamline your finances from the start but will also help you gain valuable insights on financial planning every quarter.

Dot Signage – Cannabis Dispensary Digital Menu Boards

DotSignage is one of the most sought out digital menu board solution in the Cannabis industry. With beautifully created weed menu templates , you can easily engage your customers with order driving tv screen menu. DotSignage helps you gain control over your costs and time when it comes to managing your menus.

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Dot Signage – Cannabis Tablet ordering Menu for Customer

Give your customers enough time and space to browse through your menu via cannabis tablet ordering menu and help them make an informed decision. With the image for each menu item the system makes it easier for everyone to make purchases and enhances the customer experience.

Note down your marketing plan

Before you get started on this segment, please take note that there are a set of rules that are to be followed when it comes to the marketing that needs to be done for your newly opened cannabis store.

Here are the set of guidelines defined to be followed:

Advertisements and marketing efforts need to focus on individuals who are 21 years old or older.

Customers can buy cannabis from the retailer, and have it delivered to them while they’re sitting in a vehicle parked just outside the licensed store.

Advertisements are not allowed to provide false or deceptive information.

When it comes to cannabis advertising, it’s not allowed within 1,000 ft of places like daycares, schools covering kindergarten to grade 12, playgrounds, or youth centers.

Businesses can’t hand out cannabis products or accessories as freebies or promotional items. However, they are permitted to donate legal cannabis to a patient.

Starting from January 2021, it’s against the law to have billboards or similar signs along an Interstate Highway or a State Highway that crosses into California.

Refine based on Customer Needs

After you’ve got your marketing strategies in place, the next move is to dig into your earnings for the quarter and see if you’re turning a profit.

The initial few months in any business can be a bit of a rollercoaster. Yet, if you’ve done your homework right from the get-go, you stand a good chance of raking in some solid earnings.

Keep in mind that what’s successful for someone else might not necessarily be the ticket for you. It’s a good idea to pinpoint what aspect of your business resonates most with your target customers and really concentrate on that.

Make sure you’re really familiar with all the products listed on your menu and can tackle any questions that come your way about them. People should see you as an expert and a trusted guide when they’re looking for advice.

In the cannabis industry, this is especially important because you’ll likely encounter plenty of newcomers who could really use some solid guidance before they decide what to buy.