7 Things I Wish I Had Known About Opening a Dispensary

I had no idea what I was getting myself into back in 2014 when I decided to pursue a dispensary license. Legal cannabis was new on the East Coast, and much of the red tape that I experienced was unique to that market. Without a blueprint, we gained experience through trial and error when establishing Mary & Main in Maryland. Here are 7 things I wish I had known about opening a cannabis dispensary, and important lessons I learned through the process.

1. Investors expect even new-stage businesses to show up with value.  

Develop your business strategy in a way that can easily be communicated to potential stakeholders. One of the biggest mistakes that many entrepreneurs make in early stages is to overvalue the license before they have a proven successful management history. Cannabis is becoming an increasingly more sophisticated industry, and investors are following suit. They are savvier on industry nuances and are looking to back companies with a proven track record and a reliable management team. This means that new-stage businesses should look to present themselves with as much value as possible. This will allow you to raise money in stages and maintain control of your business, especially early on.

2. Applications require careful organization and attention to detail.

Going through an application process can be very tedious and mentally exhausting.

The first is to stay organized. This may seem obvious, but as you put these packages together, you will find that they can range from 500 to 1,000+ pages of work, and that doesn’t just include written sections. Much of the application will include collecting sensitive paperwork (most of which will likely need to be notarized) from all the members of your team, your investors, and any affiliates of the company. This will all need to be organized in a specific order and oftentimes labeled in a specific way.                                                                

As you are collecting personal documents and information from multiple team members and vendors while working on responses in different documents, it becomes very difficult to keep track of everything. Due to the large number of applicants and the nature of the competitive process, your application is at risk of not being scored when even the smallest details of the submission process are not followed, so attention to detail is key.

Lastly, go all out with your application package. For example, if you can illustrate what you are describing in a section, add in a picture. If you can format your documents with your company branding, do it. The variety and illustrations can help your application stand out.

3. Identify your key team members early.

Remember that there are stages to building your company, and when it comes to team building, look to hire for what you need now and plan for your growth in the future. For first-time applicants, focus on key team members who can fulfill specific roles needed to get your company licensed. For example, you need both someone with technical writing skills as well as people with subject matter expertise in establishing cannabis dispensaries, including retail operations experience, inventory management skills and compliance know-how. At this stage, you may have to devote some equity to avoid high fees to bring on team members and subject matter experts (SMEs). For experience and high-level advice, you can build an advisory board with specific expertise to fill in holes. In your application, you will need to show a plan toward hiring key team members as your business grows, detailing the staff you anticipate for your sales team, packaging and labeling, receptionists and more.

Mary & Main dispensary in Capitol Heights, Md.

4. Location, location, location—really.

We all know the saying, and cannabis retail is no different. Of course, businesses pursue areas with high foot traffic, visibility, ample parking and the target demographic; however, you have the added the responsibility of making sure that the property is in an area that meets state and local municipality regulations, including zoning. (These are often specific to the type of license you will apply for.) Even if it is not required, it is always good to identify this property in the application stage and include it in your plans. Oftentimes your license is tied to this location and either cannot be changed or you will have to pay a fee to change it in the future. This means that you should think ahead when finding your location and consider all factors.

5. Invest in security from the start.

It may seem easier and more cost effective to opt for the bare minimum in security features and scale this area of your business as you go. Or if there are no issues after the first year, you may not think about  upgrading your equipment, staff, and/or policies and procedures once business is busy. Investing in high-grade equipment and exceeding expectations from the beginning is crucial for your security. It's a situation where you would not know you needed it until you do, and that is not a situation that anyone wants to be in.

6. Software needs to be customized.

Cannabis software needs to be customized for your business. Once you identify what your sales process is, you will be able to choose the software stack that best suits those needs. First and foremost, choose your point of sale (POS) system. From there, work with software companies that integrate well with this system, as it will serve as the homebase of most, if not all, of your software needs. At the very least, this will likely include an online menu and some sort of customer relationship management (CRM) tool to stay connected to your patients and customers and communicate sales.

7. Relationships are key to supply chain management.

Each regulatory agency approaches  how they allow businesses to operate differently. It is important to study the long-term implications of the supply chain in your state and ensure that you develop the needed relationships to weather any sort of evolution that you may experience. For example, if you are in a state that limits the types of licenses you can own (let's say you cannot be vertically integrated) and you are a retailer, you will want to build relationships with cultivators and manufacturers so that you can ensure you will always have an affordable, steady supply of product. Retailers without cultivation and production operations are beholden to the output of the other license types, so these relationships are very important to the success of your business.

Overall, opening a dispensary is a difficult but extremely rewarding experience. The compliance standards are high, but following them and the steps above will save you hours of confusion or hundreds of dollars on consultants. Please note: You may still need a consultant to help with technical writing and subject matter expertise, but now that you know what to look for, you can save time and money by organizing your own process and setting yourself up for success early on in the process. 

Hope Wiseman is the CEO of Mary & Main Dispensary in Capitol Heights, Md.