This is the How To Smoke Weed podcast. Where we answer 5 questions you wan to know about the cannabis industry.
#1. Is it more profitable to work on the medical or recreational side of the business?
The first thing you should know is that every state puts medical and recreational together and customers are just looking for the best deal. For example, if someone is smoking for medical purposes, but its cheaper at a recreational store this is where they will go. Same goes for medical dispensaries. A good way to decide which side you would like to get into is to decide if you are in it to help people or if you are looking to make a profit. Chances are if you are asking this question you want to make a profit and that’s great. The medical side is all about helping people and that should be your objective there. There is more of a profit to be made on the recreational side of the business because there are less restrictions.
#2. How much does it cost to start a dispensary?
You are going to need a lot to start. You will be needing somewhere between $6,000-$20,000 to lease a store front. You will need somewhere around $100,000 worth of inventory to get you started in your first month. You can get away with a little less if you need to. I would say bare bones minimum you will need $100,000 to get started but, I wouldn’t recommend doing this. You want to try and have at least a small buffer for unexpected expenses.
#3. What are the most common reasons dispensaries get shut down?
There are lots of reasons shops and dispensaries get shut down. I think the number one reason is that a lot of stores open just to test the waters. They want to see what will happen. They don’t do their homework or get any paperwork and get shut down quickly. Another common reason I see all the time is that they do not pay their taxes. It takes a while, but eventually you will get shut down if you don’t pay them. Then there are all the little things that happen like the owners or managers pass away or someone gets in trouble with the law. Lastly its common for shops to shut down because they can’t pay rent and they are not making profit.
#4. How much does it cost to set up a grow operation?
This can vary, but lets just say you are looking to grow the largest plot you can outside in Washington state which is thirty thousand square feet. Between fencing, security and plants you can get started for under $150,000. It is pretty cheap in comparison to opening a store. This is why so many people are doing it right now and why the prices on cannabis products have been dropping.
#5. Where can I find accurate information on the licenses I will need?
The first place you should look is at your states liquor control board website. You should be able to find a lot of information there. It is easier to find all the information online than it is to actually go to a location you can walk into because the people there probably won’t be able to answer all of your questions. You will need to be proactive. Normally the liquor control board is just the start. You will be needing to get licenses from the health department, your city and county departments and probably more. Rules and regulations are very different form state to state so you will have to do some research.