If you want to open a dispensary, you need to thoroughly prepare. The cannabis industry is booming, but it’s still rife with regulatory complications that influence costs. Here’s a quick look at how much it costs to start a dispensary and how to prepare accordingly.
The General Cost
On average, starting a dispensary can cost anywhere from $150,000 to over $2 million. That’s a huge range, and the exact figure depends heavily on your location, business size, and setup. Let’s explore the nuances.
Factors Influencing Cost
When calculating how much it costs to start a dispensary, consider these factors.
Licensing and Application Fees
License and application fees are some of the largest costs associated with starting a dispensary. Depending on the state you’re in, fees can range from $5,000 to over $100,000. Some locations require separate annual renewal fees, so this is a recurring cost to plan for.
Real Estate
Finding the right location is critical and can drive up costs. Dispensaries often need to comply with zoning restrictions, meaning prime spots in legal zones can demand high prices. Rent or purchase costs can vary drastically based on the region and market demand.
Build-Out and Renovations
Your dispensary should look professional and inviting. Renovations, interior design, and build-out requirements vary but can cost tens to hundreds of thousands of dollars.
Inventory
A solid inventory to meet customer demand is a must. Stocking up on high-quality cannabis products, accessories, and other retail items can cost $25,000–$100,000 or more upfront.
Security Requirements
Cannabis businesses must, by law, implement strict security measures. Expenses include surveillance camera systems, alarm systems, safes, and secure entryways.
Staff and Training
Hiring knowledgeable employees and providing adequate training is crucial. Budget for salaries, benefits, and ongoing education to keep your staff compliant with industry standards.
How To Finance the Project
If the numbers seem daunting, don’t worry—there are plenty of ways to finance your dispensary project.
Start by developing a solid business plan to present to potential investors or lenders. Some dispensary owners obtain financing through private investors or cannabis-specific lenders.
You might see if you qualify for rollover business funding, which lets you get financing help from your retirement accounts without incurring early withdrawal fees. You might also consider taking on a business partner to share the start-up costs.
Additionally, many states offer special programs for minority-owned businesses or local entrepreneurs to help them establish a foothold in the competitive cannabis industry. If you qualify, these can be very helpful financial boosts.
