As more and more states across the country choose to legalize medical marijuana, cannabis dispensaries are popping up at an unprecedented rate. With the growing demand for cannabis, opening a dispensary can be an excellent opportunity for budding entrepreneurs. However, if you are considering opening a cannabis dispensary, there are a few things you should know. Operating a business in this industry can be challenging–there are still many laws that place heavy restrictions on the cultivation and sale of marijuana products–and you need a solid understanding of how to work around them. That said, here is a look at some essential components that every cannabis dispensary needs, so that you can avoid legal action and focus on building your business.
1. Know Your Industry
It is no secret that the cannabis industry is booming. With cannabis legal in more than half of the United States in some form, getting on the bandwagon early on can help you beat out your competitors. However, it is important to fully understand how the industry works and what legal troubles you could potentially face in the future. The industry is full of strict regulations, unforeseen obstacles, and steep taxes that could affect your business in a variety of ways. By knowing this early on, you can be more prepared when issues arise.
2. Develop a Business Plan
While every business should have a solid business plan in place, those working in the cannabis industry require guidance more than anyone. Think of your business plan as a blueprint for your success. It can help you keep track of your progress and help you focus-on both your short-term and long-term objectives. Your business plan should also contain your financial projections, current market trends, and the unique opportunities and risks you face. It is the ultimate strategic tool for entrepreneurs.
3. Purchase Insurance
If you do not already have a good insurance policy in place, you need to get one. Opening a cannabis dispensary is risky business and one small mishap could result in costly settlements and the possible closing of your business.
With the possibility of a patron having a negative reaction to a cannabis product being higher than nearly any other industry, general liability insurance is an absolute must. However, as a cannabis dispensary, you can be at risk for a vast variety of claims, making general liability insurance is not enough to protect you from all possible liabilities.
A solid cannabis insurance package should include other policies, such as product liability insurance, commercial automobile insurance, equipment breakdown insurance, crime insurance, cyber liability insurance, workers compensation insurance, loss of income insurance, excess liability insurance, property insurance and EPL insurance.
4. Maintain a Positive Reputation
No matter what type of business you run, maintaining a positive reputation is crucial for your long-term success. You want your business to appear professional at all times. This means always providing friendly and honest services and developing professional relationships with your customer base.
5. Hire a Good Lawyer
Having a good lawyer on standby is another wise choice if you are opening a cannabis dispensary. The marijuana industry opens up your business to a wide range of risks and it is easy to overlook certain laws and regulations. A good lawyer can guide you through the legal implications of your chosen industry and ensure that you are complying with all local and national laws. They can also help your business secure property, review contacts, and obtain the proper licenses.
6. Secure Business Funding
Starting a cannabis dispensary is not cheap. Unless you have the startup capital already available, you will likely need to look elsewhere for funding. Some businesses prefer to take out a business loan, while others seek investors. While there is no wrong or right answer, you will want to consider what resources you currently have, what you will need in the future, and how much it will cost you to cover them.
7. Choose an Accountant
In addition to having a good lawyer on your side, you will also want to have an accountant. An accountant may assist you with creating your business plan, help you with your loan applications, and perform other common duties such as filing taxes or with general record-keeping. An accountant with experience in the cannabis industry can also help make sure that you are in compliance with strict state and federal regulations that could result in steep penalties.
Obtaining Cannabis Insurance
If you thinking about opening a cannabis dispensary or are already in the process of doing so, it is important to consider your insurance options. Cannabis insurance is now available in all U.S. states where recreational and medical cannabis is legal. To learn more about what type of insurance you need for your cannabis dispensary or to obtain a cannabis insurance policy, contact the cannabis insurance brokers at MFE Insurance.