Guide to Developing a Marijuana Dispensary Business Plan

Few industries have ever experienced the meteoric rise of the cannabis sector. From complete prohibition to a multi-billion-dollar business – it’s nothing short of extraordinary. In fact, it’s estimated that overall retail sales could increase between $32.5 billion and $35 billion annually by 2024.

Such extraordinary growth has, understandably, attracted the attention of entrepreneurs hoping to make their next million. But starting a marijuana business isn’t as easy as it seems. 

While there’s a lucrative market available, there’s also plenty of competition – as everyone vies for a piece of the pie. You’ll need an impeccable marijuana dispensary business plan to make a genuine impact. Or, if you’re interested in entering cultivation, a rock-solid business plan for growing marijuana.

We know the challenge ahead; we’ve helped many marijuana businesses through their growth pangs. That’s why we’ve put together this guide to developing your marijuana dispensary business plan.

Let’s get started.

Developing a marijuana dispensary business plan

Generals often remark that no plan survives first contact with the enemy – that’s true in business too. Rather your plan guides your objectives, providing a method to the madness. It should describe your product, marketing, hiring, financing options, and more.

Here’s what your marijuana dispensary business plan needs to include:

• Funding. No money means no business. You’ll need to determine how you’ll start raising funds to build or purchase your dispensary and acquire stock. It could be family and friends, remortgaging your property, or bringing on board an outside investor. Of course, you’ll also need a complete business plan to ease nerves about lost money.
• Location. Where your cannabis dispensary is located is critical to its future success – and it determines the vast chunk of your startup costs. Building a marijuana dispensary from scratch will likely cost you over a million dollars. Other options include strip malls or free-standing buildings; both have their benefits and costs. In addition, you need to be near your customers – there’s no point in finding a cheap location centered in a senior-dominant neighborhood.
• Licensing. Like funding, getting a license is imperative to opening any kind of marijuana business. Depending on your state, acquiring a license could be simple or extremely difficult. If you’re finding it too hard, you may be able to purchase an existing marijuana business alongside the property and license – bids are likely to be high, however. 
• Banking. Marijuana banking is a complicated topic. As the federal government still considers it a Schedule I drug, major financial institutions tend to shun marijuana businesses. In their place, specialized financial institutions like Safe Harbor exist to provide financial services to marijuana businesses. From banking to contactless payments, you’ll need a bank to help simplify your finances and minimize the cash stored on-site – a major incentive to thieves.
• Protecting and security. Thieves know marijuana businesses are cash-rich – and stock can be sold illegally on the black market. Determine how you’ll protect your assets: be it with cameras, guards, security doors, and more. You should also train staff on the potential risk of a robbery.
• Staffing. Decide how many staff you’ll need, their roles, and how much you’ll pay them. Store managers may not be necessary if you’re planning to run the dispensary yourself, but budtenders are likely to be a priority no matter your staffing levels. 
• Inventory. Where are you going to purchase your marijuana and other products from? You’ll need suppliers who can meet your demand and an inventory system to keep track of what you’ve got in store. Prioritizing a reliable inventory system can take a lot of the headache out of running a dispensary – and mean you don’t waste money on unnecessary stock. 
• Marketing. Who is your target market? With approximately 40 million cannabis consumers in the US, marijuana is no longer a “stoner” drug; it’s a normal part of the culture. Find out who your target market is, and develop marketing strategies to catch their interest, turning your dispensary into the marijuana hub for your area. Think apps, hosting events, special deals, stocking certain products, email marketing campaigns, SEO, and more.

Business plan for growing marijuana

The more adventurous – and cash-rich – entrepreneurs may decide to open a marijuana cultivation business instead. (Or, if they’re a fan of stress, create a dispensary and cultivation business in one). 

Some steps in a business plan for growing marijuana are the same as for dispensaries. You’ll need funding and a license as a minimum. However, the cultivation business can need more seed funding – as the cultivation area is typically bigger, at least with indoor facilities. 

Ask yourself these questions:

• Where am I growing marijuana? Indoors or outdoors – the answer depends on your climate, access to land, and prior growing experience. Outdoors significantly reduces investment costs but also reduces the scale of the harvest and quality of the cannabis. Indoor facilities, however, will need grow lights, ventilation systems, water systems, and more.
• Who am I selling to? Cultivation businesses need to partner with a dispensary to sell their product. If you’re planning to start growing, you need to know there’s a local, regional, or national market for your product – in accordance with local legislation.
• What am I growing? Marijuana is a remarkably diverse plant with thousands of strains. In fact, new strains are being cultivated every year, and it’s what separates the best cultivators from the rest. You need to decide what strains to grow and how you’re going to grow them. There are age-old classics, like Sour Diesel, but you’ll also want to mix it up with newer strains – or even create your own.

Follow these steps and answer the questions above to begin developing your marijuana business plan.