How to Open A Dispensary

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Are you thinking about how to open a dispensary or medical marijuana delivery service but don't know how to get started? No worries! In this post, our experts at the College of Cannabis will tell you everything you need to know to get your marijuana dispensary off the ground! Enjoy!

Legal Documentation and Incorporation

When learning how to open a dispensary, the first thing one must consider is the type of legal entity you'd like for your medical marijuana collective to be under. In the state of California, the most popular entity for most medical marijuana dispensaries is the Mutual Benefit Nonprofit Corporation. This essentially states that your medical marijuana collective will be non-revenue producing (except for "reasonable compensation" payouts to employees, owner, and growers) and that it exists solely for the benefit of its members.


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Another thing to keep in mind when it comes to having the proper documentation for your collective is the Membership Agreement. The Membership Agreement is one of the most important contracts you need when learning how to open a dispensary and is an absolute must if you wish to remain compliant with state laws. Remember, when thinking about how to open a dispensary, the Membership Agreement is a MUST! In a nutshell, the Membership Agreement is a contract between the collective or cooperative and the patient. It simply states all of the bylaws and requirements of the collective or cooperative and serves as a formal commitment by the patients to follow said requirements. Do note that the collective or cooperative must provide each patient who signs the membership agreement with a set of the bylaws or at very least must have a copy on-site if asked.

It goes without saying but you should document everything when learn how to open a dispensary in order to stay compliant and organized. Make sure to have hard copies of all documentation as well as off-site copies in case of the unfortunate event that you dispensary gets raided by law enforcement. For off-site copies, it is standard practice of most dispensaries to create digital copies of all documents and put them on a secure third-party service like Dropbox. This is absolutely imperative when learning how to open a dispensary!

Lastly, it’s always a good idea to keep an off-site backup of all medical records and recommendations in case of a raid. However, per California state law, you must keep medical records and recommendations on-site at all times. It is usually recommended that you keep a safe or some sort of secure filing system for medical records. Again, there is also available software that you can purchase for tracking patients which can easily be founded through a few Internet searches. Having medical records on-site can not be stressed enough when learning how to open a dispensary.

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Choosing a Location for Your Medical Marijuana Dispensary

Believe it or not, but one of the hardest aspects when learning how to open a dispensary is finding a good location and convincing a landlord to lease you space for you operation. When you're thinking about how to open a dispensary, always consider the location of your medical cannabis dispensary first and foremost. Visit and learn from the success of their dispensaries. Although medical weed is starting to be accepted by more and more people each day, many people throughout the state of California unfortunately still hold an anti-marijuana stance. Please be conscious of this when looking for a space and certainly be upfront about your intended operational use before signing a lease. This is important when learning how to open a dispensary in your area!

Below are a few more important aspects you should consider when looking for a physical location for your medical marijuana dispensary:

Zoning Laws for Your City: Like many other aspects of starting a business, it is imperative that you do your research and due diligence with regards to local zoning laws before signing a lease. To do this, simply go to your city’s website (usually its the planning department) and read up on their stance on medical marijuana. Be sure to contact local officials, tell them of your intended plans, and document all correspondence you have with them.  Oftentimes you’ll find that most cities simply require a specific permit to set up a dispensary and will lead you to the appropriate application process.

Business Licenses: Similar to the zoning permit mentioned above, many cities require medical marijuana collectives to submit a business license before commencing operations in their city. Business licenses are simple to fill out and can typically be found on the Treasurer and Tax Collector section of your city’s website. While business licenses differ from city to city, most require that you pay an annual fee of around $50/year. Always keep business licenses in mind when learning how to open a dispensary.

Financial Planning: Creating a Budget

According to Wikipedia, financial planning is “the task of determining how a business will afford to achieve its strategic goals and objectives. Usually, a company creates a Financial Plan immediately after the vision and objectives have been set. The Financial Plan describes each of the activities, resources, equipment and materials that are needed to achieve these objectives, as well as the timeframes involved.” (

So, assuming you’ve already set your overall vision and have created a mission statement for your organization, now it’s time to dig deep into the details of all financial aspects of your dispensary. Remember, you can never to do much planning when thinking about how to open a dispensary!

Marketing plan

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Income Projections: How to Open a Dispensary

The first thing you must do when creating a budget is to determine the amount of income you expect to bring in on a monthly, quarterly, and yearly basis. Of course you will not be spot on with these numbers, but you will be able to set a reasonable expectation for yourself that will be useful in guiding the rest of your financial decisions.

Here are a few potential sources of income for your medical marijuana dispensary to get you started. When thinking about how to open a dispensary or start a dispensary, keep these income projections in mind: Sales from Cannabis (pre-rolled joints, grams, eighths, half ounces, ounces, hashish, edibles, tea), Merchandise (T-shirts, Lighters, Joint papers), and Products (pipes, vaporizers, rollers, grinders) 

Security Measures: How to Open a Dispensary

At the end of the day, the best medical marijuana dispensaries provide their clients a safe, clean environment from which to get their medicine from. While most of the time you will have no problems with security, due to the nature of the business, you might encounter a few issues with certain people and thus it is absolutely necessary to take all precautions. This cannot be stressed enough when learning how to open a dispensary.

Below are a few of the security precautions that you can set in place to ensure a safe environment for everyone, yourself included: 24-hour security cameras with off-site backup capabilities, 24-hour alarm systems, security glass at your counters, and an electronic door to buzz patients in. All of these things combined will help you when learning how to open a dispensary.


Pricing Your Medical Marijuana

As mentioned in previous courses, medical marijuana collectives in the state of California are non-profit entities that exist to serve the interest of its members. Having said that, however, it is not illegal under California state law the sell marijuana to other users of your collective so long as there is not a profit left over at the end of the year. Whatever excess funds are left over should go back into the operations of the collective or disbursed to its members.

Now that we have that out of the way, how should you go about pricing your product? One easy way to price your medical marijuana is to compare similar product prices with other dispensaries in your area. This is crucial when learning how to open a dispensary in your area!

Managing Your Inventory

Being a product-oriented business, it is absolutely necessary that you put the proper procedures in place for tracking and managing your inventory. On one hand, you could keep handwritten records of the inventory that comes in and goes out but you’d almost certainly be setting your collective up for disaster. A much better approach would be to purchase Point of Sales (POS) software to stay on top of your inventory. A quick search of the internet will lead you to POS systems that deal specifically in the medical marijuana industry. Oftentimes, these systems come standard with many more features that can be used in other aspects of your operation.

A couple of things to keep in mind when managing your inventory: access to POS should be limited to managers only; have checks and balances in place to keep employees honest (one way to do this is to implement a variance reporting system); keep employees accountable for certain amounts of product and have a well-document system at all times; always keep receipts close at hand and try to make duplicate copies to take off-site; accounting software is usually your best best for this; also note that you will need to retain copies of these for three years. These things combined will help you significantly when learning how to open a dispensary.

Thinking of opening a marijuana dispensary! If so, let our online courses help you get started!

Start Your Cannabusiness Today!

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