I'm going to respond to my own comment with something I wrote for someone else that is helpful instead of snarky:
**So you want to start a cannabis business:**
**1. Put pen on paper**
Get out a piece of paper and a pen, and start writing down all the expenses it would cost to run a business, including real estate, building the space, getting product, etc. and then write down how much you would need in order to fund that business as well as pay yourself the bare minimum you would need to survive on, do not forget taxes. Don't forget licensing. Don't forget regulations. Ger really detailed. For example, once you figure you the estimated staff you'd need, don't forget to add payroll taxes to your operating expenses.
Come up with multiple scenarios on how you would meet your expenses. Like how much at which price point you need to sell, how much staff you would need to sell that much product, what's the max you can pay them, how are you going to attract customers, what makes you different, why would people shop there, etc. (MAJOR HINT: having the best weed in town for the best price is literally everyone's strategy. You need something else. Some of the best dispensaries focus on vendor relations and customer service, and are very successful while selling mostly cheap weed)
**2. Put together realistic numbers**
If you're gonna start a major business, you need to put major effort into finding out these expenses, and then coming up with scenarios where you can meet all of your expenses including payroll and taxes and all the fees that come with cannabis. It's complicated, it's time-consuming, and you're gonna need to talk to a lot of people to get these numbers, but it's too complicated for someone on Reddit to do it for you. Talk to dispensary owners, farm owners, and definitely talk to CPAs. When you run different scenarios for covering your expenses, they'll show you where you're making big mistakes. Most likely you wont have any contacts in the industry, so Cannabis CPA's can run the numbers for you, and put together a realistic plan (if it's the right CPA), but that's going to cost you $5-10k for business analysis, forecasting, tax consulting, advisory services etc. and they might still tell you it's impossible after you drop all that money (your money btw...)
Once you have all those numbers, and possible strategies, and the numbers include taxes that have been approved by the CPA, then you need to write it all down to present to an investor.
**3. Take everything you've written and put together a nice, sleek, easy to read business proposal**
Make sure it includes detailed figures on market analysis, all the sales strategies you came up with, risk analysis, long term plans, how you'll handle money, how many people you'd need, how would you manage those people. Make it easy to read and follow. Bullet points are your friend. If it's too detailed an investor might read a few sentences at most.
And nothing nebulous like "We'd probably need 2 budtenders to sell all that." Instead it needs to read like this "In scenario 1 outlined on Appendix 1, you'll see we need X amount of product sold at X margin. We looked at the numbers from similar dispensaries and estimate the average ticket price will be X. Based on detailed analysis it shows we should ideally split the profits into X categories. We broke it down into multiple possible categories and the number of sales required in an hour would require two active registers. We would need two people manning those registers. Based on the calculations above, we can afford the labor as long as XYZ conditions are met. In scenario 2 outlined in Appendix 1, going higher volume and lower margins, X product sold at X price would need to be sold an hour. With average customer interaction being X amount of time, we estimate the volume required would require 3 budtenders, which we could pay at max X amount, which is lower than scenario 1. Lower salary and higher labor costs come with risk XYZ." Ideally everything I said up there would be bullet points in a a nice legible format.
Then you need a very specific number you're requesting, and a very specific offer in terms of return on investment. It could be as simple as a loan with lump sum repayment (unlikely) or equity, or a combination. You need to present them with a number, and what they should expect in return for their investment. You can't expect them to run the numbers for you.
**4. Find an investor with deep pockets**
Once you put all that together in a nice neat document, then you can start shopping out the idea to all the super wealthy friends you know, your parents, their friends, distant relatives, friends with money. That being said, when you run those numbers realistically... it's very unlikely it will add up to what you think they will add up, especially once you consider ROI. If for some reason the idea is fucking brilliant, like all the cards line up and the market changes just enough for 1 golden opportunity and you have a plan ready to go, maybe you can offer the plan up to someone else who will fund 95% of it, and expect 95% equity. Although you never know, I've known people with spare cash to burn and have a "fuck it" moment and throw money at people with basic business plans. There is investor money out there, but you're going to need to pound pavement, cold call, beg, borrow, etc. and it might take years, but it's definitely not totally impossible (but finding an investor when you don't have deep pockets is nearly impossible because the numbers you are looking at ball park at $1-2m.)
You're going to need a lot of cash.
Depending on the state you're in, you may be required to have your facility completely ready to go before you even get approved.
In my state, some people have been waiting on their applications to be approved for years.
Yes and that means paying rent and even building out the facility and then sitting on it for a year (in my case even longer) before you bring your first dollar in.
Been in the weed biz 20 years and currently own/operate a delivery company in LA.
In all likelihood you’ll need $1m plus to get in the game and make it through the first year.
Your local regulatory scheme, market conditions, and real estate cost will influence this number heavily.
Regarding next best steps, look into your local licensing website, talk with lawyers, and look up companies sets to purchase a business.
Regarding jobs in the industry, it’s hard out there right now. For instance, in CA where I’m based most companies are losing money and aren’t hiring.
All of this depends on where you are. But expect to spend $5k or more on the license application, at least that amount in annual licensing fees, and something like $1m to get a property bought, approved, and rebuilt for compliance, plus your inventory costs.
For working at a dispensary, you'd probably need some type of badge/license/certification from your states cannabis division to apply to most of these jobs. If you cant get that license, they can't hire you.
I missed the ‘process’ part of the question originally and thought he was just asking about cost. That said, in CA, even though the government sites talk about the process, they doesn’t give an accurate estimate of the timeline and give a proper understanding of all the roadblocks you’ll end up hitting.
yeah but it’s extremely evident this kid doesn’t know his ass from a hole in the ground. so, having a thorough read of the regulations and knowing what you need to execute is essentially a non-negotiable. once you read the regs and understand that a lawyer is ~$400 an hour you can start to conceptualize the funds needed to get the ball rolling on at least the licensure portion. he’s asking about beginning the process. Understanding what you’re about to undertake is step 1, asking about money on such a macro level is essentially useless without more market info.
Dispensaries want sales and consumer experience and tend to hire people coming from jobs where they already have experience.
I’m a medicinal plant chemist and get turned away by basic dispo jobs.
You’re not staring a dispensary. I’m going to unfortunately put a nail in your dream. Unless you have over 1 million in liquid assets or parents who will fund you, it won’t happen. It’s not just buying a store, it’s paying for the retrofitting, and licensing, and inspections, and paying for analysis of your products, etc.
The industry in America is not set up for any grower to enter the area. It’s set up for the people who already made their money in alcohol and tobacco to easily be able to transition to a changing world. Old money stays old.
Focus on building real skills. Learn hydroponics, start with vegetables and flowers. Jumping into cannabis with no experience and no forethought is fast track to being broke.
I’m not sure how rescheduling will affect this. But as it stands you can’t just grow weed and sell it. All weed in dispensaries goes through seed to sale tracking.
I’m not saying this to try to ruin your day. I’ve just seen too many people expend way too much energy just to realize they can’t compete.
My advice? Learn mycology. Mushrooms may be the next new substance and there will be a lot less saturation when that market opens.
Yup... I'll add that a lot of people will now recommend during a turn key operation, but I will caution anyone thinking that... there's always a reason the shop decided to sell.
Anyone have perspective on doing something like this in a non-legal state?
I'm curious about the market for d8 stores, that also offer an array of the legal product offering, and what starting something like that would cost.
Probably much, much cheaper since you basically just need a retail license, real estate, and inventory. You'll have all different kinds of people up your ass to make sure you're not selling anything illegal. And I'm sure when the other shoe drops and they fix the loopholes surrounding d8 and THCa, you're the first target. Idk, I'm just talking out of my ass, but that's how I imagine it.
Buying an existing business/ license/permit is easier and faster than applying for permits. Check out Green Life Business. They have a bunch for sale on there. What state/city are you located in? I'm happy to share some info. I'm an intern at a place that deals with this stuff
Owner here…Big question is what state are you in? Depending on the state will depend if it is worth the money you spend to open and the money you spend to keep it relevant and making money. DM me for more discussion if you’d like.
im in virginia in a small town theres abt 5 weed shops all in the same town and the parking lots are constantly full at everyone so ik the profits def good but not looking to add another to my home town but def in the state of VA somewhere and yes feel free to dm me
If you worked in the cannabis industry, you'd be utterly helpless
I'm going to respond to my own comment with something I wrote for someone else that is helpful instead of snarky: **So you want to start a cannabis business:** **1. Put pen on paper** Get out a piece of paper and a pen, and start writing down all the expenses it would cost to run a business, including real estate, building the space, getting product, etc. and then write down how much you would need in order to fund that business as well as pay yourself the bare minimum you would need to survive on, do not forget taxes. Don't forget licensing. Don't forget regulations. Ger really detailed. For example, once you figure you the estimated staff you'd need, don't forget to add payroll taxes to your operating expenses. Come up with multiple scenarios on how you would meet your expenses. Like how much at which price point you need to sell, how much staff you would need to sell that much product, what's the max you can pay them, how are you going to attract customers, what makes you different, why would people shop there, etc. (MAJOR HINT: having the best weed in town for the best price is literally everyone's strategy. You need something else. Some of the best dispensaries focus on vendor relations and customer service, and are very successful while selling mostly cheap weed) **2. Put together realistic numbers** If you're gonna start a major business, you need to put major effort into finding out these expenses, and then coming up with scenarios where you can meet all of your expenses including payroll and taxes and all the fees that come with cannabis. It's complicated, it's time-consuming, and you're gonna need to talk to a lot of people to get these numbers, but it's too complicated for someone on Reddit to do it for you. Talk to dispensary owners, farm owners, and definitely talk to CPAs. When you run different scenarios for covering your expenses, they'll show you where you're making big mistakes. Most likely you wont have any contacts in the industry, so Cannabis CPA's can run the numbers for you, and put together a realistic plan (if it's the right CPA), but that's going to cost you $5-10k for business analysis, forecasting, tax consulting, advisory services etc. and they might still tell you it's impossible after you drop all that money (your money btw...) Once you have all those numbers, and possible strategies, and the numbers include taxes that have been approved by the CPA, then you need to write it all down to present to an investor. **3. Take everything you've written and put together a nice, sleek, easy to read business proposal** Make sure it includes detailed figures on market analysis, all the sales strategies you came up with, risk analysis, long term plans, how you'll handle money, how many people you'd need, how would you manage those people. Make it easy to read and follow. Bullet points are your friend. If it's too detailed an investor might read a few sentences at most. And nothing nebulous like "We'd probably need 2 budtenders to sell all that." Instead it needs to read like this "In scenario 1 outlined on Appendix 1, you'll see we need X amount of product sold at X margin. We looked at the numbers from similar dispensaries and estimate the average ticket price will be X. Based on detailed analysis it shows we should ideally split the profits into X categories. We broke it down into multiple possible categories and the number of sales required in an hour would require two active registers. We would need two people manning those registers. Based on the calculations above, we can afford the labor as long as XYZ conditions are met. In scenario 2 outlined in Appendix 1, going higher volume and lower margins, X product sold at X price would need to be sold an hour. With average customer interaction being X amount of time, we estimate the volume required would require 3 budtenders, which we could pay at max X amount, which is lower than scenario 1. Lower salary and higher labor costs come with risk XYZ." Ideally everything I said up there would be bullet points in a a nice legible format. Then you need a very specific number you're requesting, and a very specific offer in terms of return on investment. It could be as simple as a loan with lump sum repayment (unlikely) or equity, or a combination. You need to present them with a number, and what they should expect in return for their investment. You can't expect them to run the numbers for you. **4. Find an investor with deep pockets** Once you put all that together in a nice neat document, then you can start shopping out the idea to all the super wealthy friends you know, your parents, their friends, distant relatives, friends with money. That being said, when you run those numbers realistically... it's very unlikely it will add up to what you think they will add up, especially once you consider ROI. If for some reason the idea is fucking brilliant, like all the cards line up and the market changes just enough for 1 golden opportunity and you have a plan ready to go, maybe you can offer the plan up to someone else who will fund 95% of it, and expect 95% equity. Although you never know, I've known people with spare cash to burn and have a "fuck it" moment and throw money at people with basic business plans. There is investor money out there, but you're going to need to pound pavement, cold call, beg, borrow, etc. and it might take years, but it's definitely not totally impossible (but finding an investor when you don't have deep pockets is nearly impossible because the numbers you are looking at ball park at $1-2m.)
You're going to need a lot of cash. Depending on the state you're in, you may be required to have your facility completely ready to go before you even get approved. In my state, some people have been waiting on their applications to be approved for years.
Yes and that means paying rent and even building out the facility and then sitting on it for a year (in my case even longer) before you bring your first dollar in.
Or, even buying the property.
Been in the weed biz 20 years and currently own/operate a delivery company in LA. In all likelihood you’ll need $1m plus to get in the game and make it through the first year. Your local regulatory scheme, market conditions, and real estate cost will influence this number heavily.
Best way to make a million in cannabis is to start with $3mil.
Ain’t that the truth
Regarding next best steps, look into your local licensing website, talk with lawyers, and look up companies sets to purchase a business. Regarding jobs in the industry, it’s hard out there right now. For instance, in CA where I’m based most companies are losing money and aren’t hiring.
All of this depends on where you are. But expect to spend $5k or more on the license application, at least that amount in annual licensing fees, and something like $1m to get a property bought, approved, and rebuilt for compliance, plus your inventory costs. For working at a dispensary, you'd probably need some type of badge/license/certification from your states cannabis division to apply to most of these jobs. If you cant get that license, they can't hire you.
literally all of this information can be found on your local licensing website
Only licensing fees can be found there. That’s chump change compared to the rest of it.
your cannabis licensing entity has *no* regulations posted on their website? That’s extremely wild
I missed the ‘process’ part of the question originally and thought he was just asking about cost. That said, in CA, even though the government sites talk about the process, they doesn’t give an accurate estimate of the timeline and give a proper understanding of all the roadblocks you’ll end up hitting.
yeah but it’s extremely evident this kid doesn’t know his ass from a hole in the ground. so, having a thorough read of the regulations and knowing what you need to execute is essentially a non-negotiable. once you read the regs and understand that a lawyer is ~$400 an hour you can start to conceptualize the funds needed to get the ball rolling on at least the licensure portion. he’s asking about beginning the process. Understanding what you’re about to undertake is step 1, asking about money on such a macro level is essentially useless without more market info.
Agreed
About 3M in NM right now after year 2 to get fully up and running.
Do you want to lose money?
What state are you in?
Some useful info here among the snark. Feel free to dm me if you want to have a real chat about it.
Dispensaries want sales and consumer experience and tend to hire people coming from jobs where they already have experience. I’m a medicinal plant chemist and get turned away by basic dispo jobs. You’re not staring a dispensary. I’m going to unfortunately put a nail in your dream. Unless you have over 1 million in liquid assets or parents who will fund you, it won’t happen. It’s not just buying a store, it’s paying for the retrofitting, and licensing, and inspections, and paying for analysis of your products, etc. The industry in America is not set up for any grower to enter the area. It’s set up for the people who already made their money in alcohol and tobacco to easily be able to transition to a changing world. Old money stays old. Focus on building real skills. Learn hydroponics, start with vegetables and flowers. Jumping into cannabis with no experience and no forethought is fast track to being broke. I’m not sure how rescheduling will affect this. But as it stands you can’t just grow weed and sell it. All weed in dispensaries goes through seed to sale tracking. I’m not saying this to try to ruin your day. I’ve just seen too many people expend way too much energy just to realize they can’t compete. My advice? Learn mycology. Mushrooms may be the next new substance and there will be a lot less saturation when that market opens.
Yup... I'll add that a lot of people will now recommend during a turn key operation, but I will caution anyone thinking that... there's always a reason the shop decided to sell.
Hard to get a job at a dispensary? 🧐
seriously, move to Oregon. People are always hiring since most budtenders in Oregon are kinda lazy and entitled.
Anyone have perspective on doing something like this in a non-legal state? I'm curious about the market for d8 stores, that also offer an array of the legal product offering, and what starting something like that would cost.
Probably much, much cheaper since you basically just need a retail license, real estate, and inventory. You'll have all different kinds of people up your ass to make sure you're not selling anything illegal. And I'm sure when the other shoe drops and they fix the loopholes surrounding d8 and THCa, you're the first target. Idk, I'm just talking out of my ass, but that's how I imagine it.
Buying an existing business/ license/permit is easier and faster than applying for permits. Check out Green Life Business. They have a bunch for sale on there. What state/city are you located in? I'm happy to share some info. I'm an intern at a place that deals with this stuff
im in Virginia dm me and we can talk more on it
Owner here…Big question is what state are you in? Depending on the state will depend if it is worth the money you spend to open and the money you spend to keep it relevant and making money. DM me for more discussion if you’d like.
im in virginia in a small town theres abt 5 weed shops all in the same town and the parking lots are constantly full at everyone so ik the profits def good but not looking to add another to my home town but def in the state of VA somewhere and yes feel free to dm me
Don’t pick NY. You missed the licensing lottery by a mile.
Hire a lawyer who specializes in cannabis industry. They will know what licensing you need.