A number of individuals in different states across the country are seeking information about how to get a dispensary license and medical marijuana lottery. This article will provide a brief overview and give industry insight to assist you in understanding the process of legally setting up a cannabis business. In addition, the article will provide a detailed legislative history of the state of California, which, going forward, is intended to serve as a model for several other states.
The medical marijuana lottery system is used by different cities across the country to determine the order that will be used by the planning commission to consider proposals made by medical marijuana facilities. In some states and cities, the lottery is used as a means of controlling the anticipated rush of proposals when a city starts accepting applications. In essence, the medical marijuana lottery will prevent individuals from lining up in masses to be the first in line to apply for permits.
California, Michigan, and other states are allowing their counties and cities to come up with their own decision locally whether they will allow cannabis businesses to operate within their borders or, in some situations, even next to them. If so, how many, what type and even more importantly, the location in which the businesses will be allowed to operate.
When the applicable zoning is laid over a map in addition to the restricted zones for youth centers, parks, schools, treatment facilities, religious institutions, and other marijuana facilities, only a few parcels are available for use to start this type of business.
In addition, if applicants are required by the city to compete in a medical marijuana lottery for a small number of permits, this exponentially escalates the impact of scarcity. This will result in overly elevated rents and asking prices. When applicants are forced to pay rent because of a lengthy approval procedure, many startup funds of small businesses can become exhausted.
Best Course of Action
You should consider negotiating a lease with the option of renting at multiple times standard rates. If this is approved, get the permission and participation of the landlord as required. You might even need to trade some equity to get this done; however, it could be well worth the investment.
There are a number of entrepreneurial clients who have won the medical marijuana lottery and made the decision to venture out into the cannabis space. If you are in a similar situation or if you are not so fortunate and need assistance in identifying prospective sites or do due diligence on a location, there are experts available, with whom you can discuss property suitability.
Commercial cannabis has been maturing quicker than other consumer packaged goods and as such, brands have become vital at different links in the supply chain. How your storefront is named, designed and staffed and how your service is delivered will be key factors to attracting and retaining a customer. As the market develops, there will be self-alignment in the dispensaries and they will identify with niches of the market, from senior citizens to an average consumer and everywhere else in between.
Maybe most essential to the long-term success of your business will be your marketing professionalism and the culture of your team. Essentially, how well matched the brand of your dispensary is to your niche market, community and finally your loyal customers could have the greatest impact on your financial success in this industry.
Within the political and competitive scene for the majority of cities as local permissions are distributed, your branding could even determine whether your business is given an opportunity to start, let alone flourish.
White Labeling and Branded Products
In comparison to the majority of packaged goods like wine or beer, there are not any leading or known cannabis brands currently, particularly in niche markets like a sleep aid, senior and wellness. In addition, the developed brands are usually tied to one or a small number of states because of licensing restrictions.
You should take steps towards aligning your dispensary with brands that have the widest appeal but are simultaneously tailored to audience segments as best as possible. Additionally, you can build your own with partnerships with manufacturers and cultivators.
Required Investment Levels Tremendously Vary
The investment amount required to open a dispensary is always higher than the majority of individuals would imagine. The cost can tremendously vary from one market to the next and in accordance with the different local ordinances of the targeted cities.
The double whammy of limited licenses and large populations creates a level of investment that exceeds the budget of the majority of single investors unless he or she is privileged enough to have rights within green-zoned properties prior to the escalation of rent. Some mega-funded operations are renowned for sweeping in and buying the land to avoid the hassles of a landlord and competition.
The options for lower budget entries are outlier cities that have leadership who is concerned about the jobs and tax revenues created by dispensaries. This is maximized by their capability and concentration on having products delivered into adjacent communities with less polished operations or those that do not have local dispensary options.
In 2019, there are still amazing amounts of available opportunity to those individuals who are able to put together a combination of professionalism, capital and a little bit of luck as it relates to real estate.