If you want to make your product available to the 1.5 million New Yorkers as of 2018 who smoke or otherwise use cannabis, you might be thinking of opening a dispensary. But if you’ve never opened a business before or not one under the new New York state regulations, you may feel like you’re in a bit over your head. Here are the three steps that you need to take to open a dispensary in New York.
1. Research
Before anything else, you’ll need to understand how to start a dispensary in the first place. However, it isn’t as simple as applying for a business loan, buying equipment, and setting up shop. Before you add in any financial obligations and look for investors, you should do some research.
First off, you’ll need to research how to get a dispensary license in New York and find out if you qualify. At the moment, business owners are only able to apply for a Conditional Adult-Use Retail Dispensary license or CAURD.
These are licenses made to level the playing field for previous owners who have received penalties for marijuana-related offenses before March 31, 2021, in the wake of its legalization. Further licenses and permits will be available in the future for other entrepreneurs.
Secondly, for business owners who will be working out of a brick-and-mortar store, be sure to research the location, rent, and size of the space based on your prospective customer base and plans for your inventory. If you plan on offering a limited inventory focused on quick service or pickup, you may look into a smaller space. And if your store will likely be designed for customers to browse a myriad of product offerings, something larger might work.
If you’re focused more on e-commerce, finding the best site to utilize, or considering having one built and personalized to your business needs, is also something you should put a significant amount of time into researching.
2. Plan
You might’ve heard the saying, “if you build it, they will come.” While you may get some benefit from simply selling cannabis without a robust business plan or process, that won’t be sustainable. Instead, you need to have a detailed and customized plan that documents your processes, procedures, and goals.
The single most important part of your planning stage is confirming that you have the capital to start. Planning with money that you aren’t guaranteed or don’t already have is certainly not advised, and it takes a large amount of capital to even apply for a license, let alone be able to rent out a space.
A proper robust business plan also includes your advertising and marketing budget, any payroll/HR expenses, and the actual details of inventory management and pricing, though this isn’t an exhaustive list. You may not think that these are important, or that you can start without a plan and work backward. But your competitors will likely open with a plan, and losing customers at the start may be difficult to overcome.
Speaking of competitors, conducting competitor and market research will help you understand the selling points of your competitors and offer your own unique selling point that they don’t. But unlike some other businesses, you’ll have to be mindful of your competition that’s selling cannabis illegally as well.
3. Execute
Execution is putting all of the parts of your plan and research together to create a positive customer experience and start up a profitable business. This means renovating or putting the finishing touches on your physical storefront or website, making sure all of your ducks are in a row in terms of your license and other legal matters, and setting yourself up for success with a great advertising or marketing campaign from opening day. In addition, this also includes getting your inventory in and displaying it in an attractive way, whether you’re strictly online or in-person.
But of course, opening day nor even the first 6 months are the end of it. You’ll want to make constant strategic adjustments to your store that keep you in line with what your customers want as well as to keep you ahead of your competitors.
Whether this is stocking new inventory to better serve your customers, expanding out to delivery and pickup options if you weren’t utilizing them before, or tweaking your marketing strategy is up to you and the needs of your business. But regardless of the changes you make, you’ll want to be proactive and forward-thinking rather than reactive.
Start Your Research Today
Operating a dispensary in New York is a tough but potentially very profitable venture, as long as you do your research, plan out your strategy, and execute faithfully while allowing for changes as needed. Although any business will be difficult to gain traction for, the incredible number of New Yorkers interested in cannabis might make things a little easier for commercial dispensaries as they begin to open up all around the state.