Best Practices for Opening a New Dispensary

Across the United States, more Cannabis Medical and Recreational Dispensaries are opening. As States award licenses, the race is on to get operational. Opening a dispensary has many phases, and once a company and ownership make it through the licensing and approval process, a new chapter begins of getting operational and passing inspections. 

Even despite slowdowns in certain mature Cannabis markets, there are still first time operators launching their businesses. For example in Colorado we’re seeing 10+ year cannabis bans being lifted and licenses being awarded in new municipalities, or new ownership of licenses and the purchasing of distressed assets. In some States they are launching Recreational for the very first time after being in a Medical Market. 

Whether you’re operating in a brand new market or an existing and mature market, launching a Dispensary takes a lot of work, organization and adapting to get it across the finish line. It’s important to have a solid team, excellent project management, and a well organized plan in place. These key factors will support your ability to pivot and adjust when necessary - in Cannabis it is non-stop changes and navigation of the ever-changing regulations. 

From our own personal experience of running Dispensary operations and helping our clients launch their retail stores, we’ve developed some best practices when it comes to opening a Dispensary. 

The Team

Having a solid team in place pre-operations is key. Opening a dispensary can be an overwhelming experience for owners, there are a lot of tasks that need to be executed in a timely manner and you’ll have roughly 3 months or less in some cases to knock out a lot of operational preparations

Be Organized

From day one being organized will save you from lots of pain, unnecessary disruptions and self-inflicted anguish. Attention to detail is the life preserver you never knew you needed until now. It’s important to track everything, and every little detail, information, communications and tasks. Managing timelines, delays, changes, inspections, supplies, money, a variety of contractors, and expectations is a big task.

Project and Task Tracking

Utilize either project management software or create a spreadsheet tracker. This will help manage the overwhelming workload, and give visibility to what is getting completed or not. Tracking important milestones helps solidify meeting goals, accomplishments and getting closer to the opening date.

An Important Tip! Timelines and dates are temporary, and can change just as fast as the wind can change directions. Do not hold on tight to dates and learn to let go. There are a lot of things out of the control of the team (and owners) such as construction delays, going over budget for unplanned costs during the buildout, local municipality delays, and supply chain issues regarding the build out or supplies. Be adaptive, patient and resilient, it will go a long way when trying to launch a Dispensary.   

Launching a Dispensary can be challenging to say the least, waiting to pass your inspections, getting cameras operational, the vault or safes up to par, employees trained, product ordered and store menu confirmed, having the capital to purchase inventory, getting the POS system implemented and launched, and ensuring coordination with the Seed-to-Sale Tracking software with your POS and all your cash management processes and other day-to-day SOPs. 

This is just a fraction of the work that needs to be done, and in some cases, depending on the State and the local municipality you might have roughly 1 or 2 weeks prior to opening the store before you’re allowed to receive manifested and tagged product to your store. Here are a few other things to consider when opening a Dispensary to help get organized around the plan:

• Training Schedule - It’s important to have a dedicated training schedule for staff, especially if employees are “in waiting” while the Dispensary is going through build-out inspections to become operational.
• Furniture, Fixtures, and Equipment List - It’s important to be organized when managing furniture, fixtures, and equipment for a new Dispensary. The tracking of the ordering and purchasing of items on the FF&E list are vital to a smooth opening day.
• Cash Handling and POS - One of the top 3 most important items getting nailed down and having a system in place before opening a Dispensary is the menu build (inventory), the point of sale system and cash handling. These 3 items are essentially synchronized and ultimately need to work together in unison.
• Vendor Relations and Outreach - Even if you cannot purchase products yet, and are awaiting to pass inspections, begin vendor outreach a month prior to opening. Build vendor relationships early and get pricing to finalize margins and tiers. 
• Inventory (COD & Net 30) - With the ups and downs in the marketplace across the US and in some cases customers paying their bills late or not at all - expect COD (Cash on Delivery) requirements right out of the gate. More grows and manufacturers are requiring it, which will mean needing more capital up front to cover the cost of opening inventory. You’ll need to earn net payments in some cases. Remember your vendors are not a bank!
• Soft and Grand Opening - It’s important to work through the kinks, and give the staff the opportunity to have a little breathing room. We suggest doing a soft opening, this allows for any issues to be addressed and fixed, and the correct changes can be made. A soft opening can last around 1 to 2 weeks and then have the Grand Opening scheduled, and marketed appropriately. 

There will be things out of your control, like buildout delays, being over budget or capital/funding issues that can arise during a launch, it is very important to navigate these challenges through adapting and having a plan in place. The Cannabis industry will always be an industry of ups and downs and rapid changes. This is in part to still being a very young industry, and not yet passing federal legalization, rescheduling or banking hurdles which are in the future and what that will likely look like or even mean for the entire industry.

ICS Consulting specializes in Compliance based services, such as Third-Party State Regulatory Audits, State and Local License Application Support, Technical Writing, Standard Operating Procedures Development, Worker Safety, QMS, OSHA Compliance, Metrc Seed-to-Sale Support, Compliance Operations Training, Employee Retention Solutions, and Employee Onboarding. For more information on how ICS Consulting Service can help your Cannabis Business, book a free 30-minute consult and we'll help you map out your next steps to be successful in the Regulated Cannabis Industry