Medical marijuana dispensaries obtain marijuana through legal vendors to sell it to physician-approved patients. To start a medical marijuana dispensary, you’ll have to get a physician on board as one of the directors to ensure that the standard accepted practices are in place and that patient treatment adheres to them accordingly.
Dispensaries commonly have highly trained personnel who are required to continually expand their knowledge of a wide range of different medical purposes of cannabis, its many forms, and strains. Those forms include edibles, juices, oils, balms, tinctures, and vapor.
Medical marijuana can be used as an alternative to drugs with harmful side effects such as painkillers. Dispensaries make it possible for patients to buy marijuana online. Let’s see what it takes to start a medical marijuana dispensary business in 2020.
1. Start with a Business Plan
One of the essential steps of starting your medical marijuana dispensary business is developing a clear business plan. It will help you discover all the challenges, map out the specifics, and prepare yourself for whatever may come. A plan includes all the essential topics such as:
- The cost of starting your business – think of your application for a license ($5000-$250,000), monthly rent, security deposit, initial inventory, jars, bottles and display cases, office supplies, security system, and steps to build brand recognition. When it comes to ongoing expenses, include sales promotions and advertising, staff salaries, utilities, and the cost of buying marijuana from growers in your calculations.
- Discovering your target audience – all patients who have been appointed by physicians who have prescribed medical marijuana as a medical treatment are your target audience.
- Setting competitive pricing – the price you charge depends on the quantity and quality of the product. On average, the price goes up to $200 for an ounce of medical marijuana. Tinctures range from $15 to $50, while edibles go from $2 to $5 per dose. You can increase your profits by growing your product.
- Choosing a catchy name – selecting the right name for your business is vital to your success, as it will help you stand out from the rest. Make sure the name isn’t already taken when registering your business.
2. Establish a Legal Entity
Forming a legal entity for your business protects it from personal liability if your medical marijuana business gets sued. There is a wide range of business structures to consider, but the three most common include DBAs, LLCs, and Corporations.
To make sure you’re compliant with the latest laws and regulations, you should hire a registered agent service or you may visit Garrity Insurance to know more about a cannabis insurance policy. It can also help add an additional layer to your privacy. It can also help add an additional layer to your privacy.
3. Register for Taxes
Before you can open for business, it’s paramount that you register your dispensary for suitable federal and state taxes. The first step to handle this is to apply for an EIN. The procedure for applying for an employee identification number is free and easy, and you can acquire it by mail, via fax, or through the IRS website.
4. Apply for a Business Credit Card and Open a Business Bank Account
Running a business with success is all about protecting your personal assets. You can do that by applying for dedicated credit accounts and business banking. When you mix your business and personal accounts, you put your personal assets, such as valuables, car, and property, at risk.
In case your business gets sued, you could be facing bankruptcy. If you want to avoid this, dedicated business banking is the best solution. In addition, it would be wise to do some research on how to build and maintain business credit to acquire the necessary business financing quicker and easier.
5. You Need Business Accounting
Recording your sources of income and various expenses is paramount to getting a full picture of your dispensary’s overall financial performance. Keeping detailed and accurate accounts helps with simplifying your annual tax filing.
6. Get All Necessary Licenses and Permits
If you don’t want to cause your dispensary to be shut down or pay hefty fines, you have to make sure to acquire the necessary licenses and permits. Take the following things into consideration:
- Local and state business licensing requirements
- Resale certificate and generic seller’s permit
- Release of liability
- Certificate of occupancy
7. Get Business Insurance
You need business insurance to run your dispensary according to the law and, more importantly, to protect your business if any event endangers your financial well-being. There’s a range of different types of insurance to choose from, but we recommend starting with general liability insurance.
The last advice we can give you is to research how to define your brand and promote your dispensary in the best way; it will ensure steady profits and high customer retention rates.
If you’re passionate about alternative medicine, starting a medical marijuana dispensary business might just be the best way to go about your passion. Since medical marijuana is an ever-increasing market, there is no better time to get on board than now.
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