Starting A Dispensary In Las Vegas
Many people think that making money while doing the things that make you happy is the ultimate goal in life. This is especially true for many cannabis lovers, and it could mean that opening a dispensary is probably your go-to move.
The local shops in different areas are always busy and filled with lots of customers, so why not go with this path and start your very own cannabis dispensary.
How much does it cost to start a dispensary in Las Vegas? The fees alone are costly. Expect to pay $5,000 for the initial application, $30000 for the initial licensure fee, and $5000 for the annual license renewal fee. Not to mention the other factors that you should consider like rent and your sources.
This article will mainly focus on how much it will cost an individual to open their very own dispensary in the state of Nevada. You need to consider different factors and know all the benefits of making sure you will get your return on investment.
The Cost To Open A Dispensary In Nevada
Back in November 2016, many Nevada voters weighed on the initiative of the state to regulate and tax marijuana. It is by a margin of 54 to 46.
The ballot was passed, paving the way for the state to permit the sale and usage of many marijuana products. Among many other things, this particular law will create fresh and many commercial opportunities in the state.
If you are looking for ways to apply for a dispensary license, you probably need to think about it carefully. There is not much open application today, and the last one was awarded back in December 2018.
Since then, there have not been many application periods, and not many people plan to do so. It is because Nevada’s regulations only allow for a set number of licenses, and dispensaries, and retail cannabis stores. The maximum number is 132.
Although, if any licenses are revoked, someone surrenders them. Also, when the law changes to increase that number, then the application will start. If this is the case, here are some of the things that you should know when planning to start a dispensary:
Applying For The Appropriate Marijuana License
Under a specific Nevada Law, there are different types of commercial marijuana licenses available.
- A license for a marijuana dispensary
- A license for a marijuana cultivation facility
- A license for a marijuana production facility
- A license for an independent testing laboratory.
The first thing to do is the applicant should have the appropriate license for their specific operations. If you seek a dispensary license in Nevada, expect it to leave a dent in your wallet, as it can be pretty expensive.
The fees alone are $5000 for the initial application fee, and it is nonrefundable if you are denied. You also need to pay $30000 for the initial licensure fee and $5000 for the annual license renewal fee.
Compared to other businesses, the application and licensing fees are pretty high and expensive, not to mention that these costs are only the beginning.
It would help if you also had enough capital to get your business up and running. This includes finding and selecting a secured facility and property for the proposed dispensary.
Meeting The Application Requirements
To start operating a marijuana dispensary, you need to obtain a license in Nevada, and you must meet several different requirements.
The most common document/requirement that you should have is that all applicants must have control of $250000 in liquid assets for the business entity. If you lack sufficient startup capital, more or less, your dispensary license application will be denied.
Furthermore, as part of the application process, property for the proposed site must be obtained, which is essential. The selected property must comply with all the state and local regulations related to marijuana dispensaries.
The most important bit is that it should be renovated before turning it into a marijuana dispensary. Under Nevada law, all marijuana establishments must have a secure entrance to be built in a traditional or pharmaceutical facility style.
Dispensary License Application Fees
Many dispensary license dees can vary from one state to another, and an accurate expectation would be to spend about $5000 for your license application alone. Before you even sell your first gram, you spend a considerable chunk of your money before you even get a green light.
It is among the first steps in opening a dispensary, and like mentioned above, this is not refundable. In addition to that, expect to pay an annual fee ranging from $1000 to $10000.
Real Estate Costs And Challenges
Location will always be your key to your success in opening a dispensary, but it may be in short supply. There are many strict rules about how close a dispensary can be to a school and how it can be close to another dispensary.
Spotting a retail space that will let a dispensary operate on the premises is only the first part of the battle. Also, it would help if you found an area that has many people and good visibility.
You will probably pay additional money for being in the cannabis business. There is annual real estate for many marijuana store expenses, and it could run up to $1000000. Then you need to add the one-time cost of remodeling the space to meet all the requirements.
Cannabis Industry Banking Rules And Fees
Believe it or not, marijuana dispensaries fall into a gray area in the business world, and technically, they are illegal from a federal standpoint. Because of this, many banks do not want to transact with a dispensary for their initial investment and their daily needs.
Many owners will do business with some credit unions or even private marijuana banks to work around this issue. The downside is that this comes with a cost as these organizations realize that you have no other choice. In the end, they can charge holding fees up to $2000 per month.
Ongoing Costs To Operate Your Marijuana Business
Once you can pass the first step of opening your dispensaries, you will now be in a good position to operate. But remember, before opening day, you need to ensure that you have a fully compliant POS system, a security system, and some inventory to sell.
All of these electronics can run you about $25000, so you might need to consider and plan for it. In states where it is illegal for dispensaries to grow their own flower, stocking your shop with high-quality products could run at the rate of $1500 per pound.
Other operational costs will include some advertising expenses. Depending on your location and the number of competitors you have, this could run into the $25000 range before you even know it.
Also, it’s a good idea to have a retainer or an attorney in your business and have insurance policies if anything happens. Given that the cannabis business is vulnerable, these annual costs can approach up to $50000.
To be able to run a business, you also need to have dedicated and fully trained employees. Your shop’s size will dictate how many people you might need on your staff.
Let’s say that you have a few budtenders, a store manager, and a supervisor. You may expect your annual payroll to be around $250000 if you pay them at an industry-standard rate.
Benefits Of Opening A Dispensary
Opening a dispensary might be one hell of a ride in terms of monetary investment. It is a good business as long as properly maintained. It can be pretty risky and challenging, but in the end, you will reap more than what you have worked for in the beginning. Here are some of the benefits of opening a dispensary in the state of Nevada:
- Greater Income Potential – Believe it or not, the estimated cannabis industry is worth $4billion. Because of this value, many people are getting more and more interested in opening their dispensaries.
It is expected by the end of the year. The estimated account will be quadrupled, making cannabis worth $16billion. This amount alone is way more significant than the annual GDP of some other countries.
- Provides Work For Several People – Several people plan to open a dispensary in the state, and if you have been granted a license, you will be able to provide work for many people.
It means that starting your business will give hundreds of unemployed individuals a job since you can not handle the business independently, and you need people to help you out.
- Opening Of Other Business Types – Because of having your own dispensary, other types of business will be available in the future. Think about having insurance services, physician consultations and recommendations, and payment processors. These will open to augment the product and services that are being offered in the dispensary.
- Provides Great Help To Patients – It is probably the most critical benefit of opening a dispensary. You will be helping a lot of patients who need medical marijuana use.
Since you are operating legally, those who require marijuana medical intervention can approach you. They will feel safe as you are licensed and regulated adequately by Nevada law.
- Helps Raise Awareness And Education – Still, many people do not have enough information regarding the medical benefits of marijuana. Aside from that, some government agencies do not accept the idea of marijuana as a medical herb.
By opening a dispensary, you are letting people around you learn more about marijuana’s benefits. You can raise awareness by posting posters outside your dispensary.
Opening A Marijuana Dispensary
Pot right now is a hot topic, and even for those who do not technically smoke it. The recent legalization of marijuana in Nevada has been an unprecedented process.
By legalizing both recreational and medical marijuana, there is a new uprising industry. If you’re among the many entrepreneurs who are interested in opening marijuana dispensaries, you need to know different ways on how to open one legally and adequately.
Assess Your Commitment And Eligibility
If you are planning to open your very own dispensaries, you need to be well-informed of what you’re going into. You might think that these are drugs, which are terrible for people, but that is where the hypocrisy starts in the marijuana industry.
Alcohol and tobacco are far more damaging to people, and they are considered more addictive. Schedule 1 Narcotics, by legal definition, is known to be highly addictive.
It is shown to have no medical benefits, and it can be harmful to the point that it can lead a person to their demise. Alcohol and tobacco meet all of these requirements, while on the other hand, marijuana meets none.
Do Your Research
As mentioned above, you need to inform yourself and get to know what you are getting into. The dispensary business is packed with lots of legislation and regulation to follow.
For instance, determining how you will accept payment in a cannabis business is quite a complicated topic. You need to conduct more research and give plenty of thoughts on how you will pursue it.
To be a successful dispensary owner, you need to understand the existing laws around marijuana cultivation and sales. You also need to know the proposed laws and changes going into effect in the coming years.
Always read the Cole Memorandum, which can give you some guidance to U.S State Attorneys on prioritizing the enforcement of marijuana laws.
Find A Rental Property
The key to success in many dispensaries is that they have a stable compliant property. A compliant property has many requirements, and to be one, it has to be above 1000 feet from a church, 1000 feet from a residential zone, 1000 feet from a school, and 1000 feet from another compliant property.
There is a map online that can give you the compliant properties in the state of Nevada.
Write A Business Plan
When a particular industry is saturated in much medical marijuana industry, you must have a solid business plan. Having a business plan separates you from many other dispensary owners.
You should always write a business plan, and many people get involved in this business and are not severe. You need to understand what you are getting into and do not listen to anybody’s advice as their experience won’t be the same as yours.
Any good business plan starts with good capital, considered the most challenging part of the marijuana industry. The barriers to getting in are still pretty high, and it will take a lot more money than it used to be.
Some got into it with about $50,000 and some credit cards, and you can expect to spend at least half a million because of the regulations.
Determine Your Budget
Another vital bit of your business plan is to have a concise and precise budget. You have to build a budget properly and take 280E into account, and you won’t be able to do it on a shoestring.
You have to be prepared for it to grow slowly. To get the hang of it, you can consult wholesalers in your area to find out the cost of each product. For the business plan to work itself, you need to know your costs and cost to get the product.
Besides product costs, you need to consider the following for your budget:
- Rental cost
- License cost
- License application fee (nonrefundable)
- The salary of your employees
- Storage and transportation of your end products
Research The Competition
Lastly, it is essential to know about the licensed competitor available in your area, as opening a dispensary requires you to think of others.
Think of it as a healthy competition so you can plan on how you will market and prepare your newly built dispensary. Understand the unlicensed competition in your area.
You need to understand what the law enforcement is doing about it or planning to do about it. The truth of the matter is, the unlicensed ones are getting away with it.
Law enforcement only works on shutting them down, but it is not a high priority because they can’t get any convictions.
Money will definitely play a significant factor in opening your dispensary in the state of Nevada and especially in Las Vegas.
The actual cost of opening one dispensary alone can be pretty overwhelming for people who just started doing business. Always remember that all industries and companies will have highs and lows, and the marijuana industry can sometimes be quite vulnerable.
Just ensure that you have enough capital to provide the best of the best products and services for your dispensary.