The cannabis industry has had a long-troubled history of inequality, and we all are aware that the war on drugs disproportionately impacted communities of color and other minorities. Today, the legal cannabis industry is thriving, but it certainly has a diversity problem. To counter this, many states have incorporated social equity programs with respect to the legalization of medical or adult-use marijuana. As states like New York and New Jersey have jumped onto the recreational cannabis bandwagon with very robust social equity programs, legacy states like California and Colorado are expanding their respective programs to ensure equity, diversity, and inclusion in the cannabis industry.
Social equity programs deal with justice and fairness within public policies. These programs attempt to ensure that people of color, women, other minorities, and those with marijuana offenses prior to legalization, be afforded an equitable opportunity to participate in this growing industry. While some cities and states are designing social equity laws in hopes of creating a better business landscape, rules are far from perfect. Thus, everyone in the cannabis industry must pitch in to ensure that these regulations are enforced and do all we can to bring awareness while empowering social equity applicants with all the tools they need to establish a successful legal cannabis business.
Broadly speaking, anyone who is a minority or categorizes as low-income, and was disproportionately impacted by the war on drugs may qualify as a social equity applicant. The breadth and scope of cannabis social equity programs vary from state to state, and every state has different qualification criteria and provisions. For example, California has established an initiative that provides financial support and training to minority cannabis business owners, but cities like L.A. are recognizing that such measures are not enough and making amends by reforming regulations.
States like Michigan and Illinois are regulating the application process to give minorities an equitable chance to win cannabis licenses. Other states are taking a different approach by providing priority licensing to qualified applicants. New Jersey and New York have taken their rules a step further by reserving up to 50% of licenses for minorities or slashing the application and license fee significantly for social equity applicants.
Click on your state to learn in detail about whether you qualify as a social equity applicant.
Opening a cannabis dispensary as a social equity applicant is no different than a regular applicant, except for some special unique provisions provided by state governments to ensure equity in the cannabis industry. The first and foremost step is to identify whether you meet the qualification criteria for a social equity applicant laid down by your state, otherwise, your application may get rejected in that category and you may have to go through the regular process from scratch. So, first and foremost, read in detail about the criteria in your state, which you will find in our state tabs at the top of this page, or check your respective government website. The subsequent steps include research and planning, applying for a cannabis retail license, creating a business plan, securing financing, building a team, finding the ideal technology partner, etc. All these steps are outlined in the next section on this page. Also, download the latest edition of our extremely popular 'How To Open a Cannabis Dispensary' guide to learn more.
With over 1800 stores running on our POS system, Cova Software is the leading cannabis technology company in North America and believes that everyone, irrespective of background, must be able to launch a cannabis retail business. Hence, we offer special deals and discounts to qualified social equity applicants looking to open a cannabis dispensary in the US. With our wealth of knowledge and industry-specific experience, we can guide and help you quickly establish your cannabis business with the best practices.
It takes a certain amount of courage, knowledge, and just pure risk-taking to take the plunge into entrepreneurship. You certainly need a good business plan, an attractive location, or eye-catching signage to be successful. As a cannabis dispensary owner, you need to plan for every contingency possible.
Before you embark on a cannabis business journey that comes with its own unique set of challenges, conduct a quick self-check with these questions to see if you are prepared for the ups and downs.
The one crucial to opening your dispensary is to research extensively and plan in detail. Most states actively maintain a checklist on their official websites that details how the application process works, along with the social equity regulations. Some critical steps in opening a dispensary include finding a location, ensuring that you get your dispensary license, raising capital, and creating a solid business plan. Learn in detail by clicking below.
Before opening your own dispensary and starting to accumulate revenue, you need to successfully apply for a cannabis retail license. How arduous the application process you will go through depends largely on your location. But no matter where you choose to operate, there are some important factors in applying for a cannabis dispensary license that is common to all states in the US.
Before opening your dream cannabis retail store, you need to develop a detailed business plan. It is an important fundraising tool and will provide a strategic guide covering all aspects from preparation to operation.
Whether you decide to draft it yourself or hire a professional, you should always address certain core elements in your plan. We have identified six that are particularly important to new dispensaries and have carefully reviewed them in this practical guide to facilitate your social equity cannabis business plan.
Although opening a marijuana dispensary is similar to opening any other type of small business, it is much more expensive due to certain state regulations and financial barriers that must be overcome.
Although application and licensing fees are lower for social equity applicants and many states are providing financial help as well, but operational costs will still be significant for any kind of cannabis retail store. The cost of opening a cannabis dispensary ranges from $ 150,000 to $ 2 million. This includes approximately $ 250,000 per year in staffing, $ 100,000 annual rent, and pre-renovation costs of $ 50,000. Of course, everyone's budget is different and there are many variables in financing needs. Some costs are under your control, others are related to your jurisdiction.
A unique feature of the cannabis industry is the relative lack of financial services. Most traditional resources of capital are unavailable to cannabis entrepreneurs, as cannabis is still illegal under federal law in the United States. Thus, access to professional financial services is restricted states usually insist that you have available working capital for daily and monthly business costs as a pre-condition of the licensing process.
In most jurisdictions, even for paperwork related to your application, you will need to provide an expected physical location for your store. This means you need to research the localities you are considering operating in, paying particular attention to local demographics and other obstacles that may exist at the local level.
Read more about five specific factors to consider when assessing the suitability of potential locations:
Knowing how to open a cannabis store requires more than just beautiful interiors, an excellent selection of buds, and a POS system; in fact, some people say that a company's performance is related to its employees, not its products or services.
When it comes to building the best team at your dispensary, you should consider two types of people, your professional support staff and your day-to-day staff. If both groups include capable and trusted people, you are on the fast track to success.
Designing your cannabis retail experience includes how you build your brand and shape the customer experience. It is wise to hire an architect and interior designer to assist you on the final design, aesthetics, and layout. Cannabis stores have unique characteristics that are different from other retail businesses, so set up your space in advance for the long run. Experienced professionals can help and save you money by providing foresight.
The retail environment of a cannabis store is much more complicated than regular stores. Not only do you face the same performance burdens as other companies, but you also have to deal with important legal and compliance requirements. Choosing the right technology infrastructure for your store can greatly alleviate these challenges. At the most basic level, you will need a WiFi network, a computer, a POS, and an inventory management system to run your store. In order to ensure that customers can find you, you also need a website. If you want to provide online ordering, delivery, and display real-time menu functions, you will need an e-commerce website.
The main purpose of a cannabis security plan is to provide a safe and secure environment for the store’s employees, customers, and visitors while adhering to all statutory requirements. Take a look at the most important components of any cannabis dispensary security plan.
Sourcing cannabis in the United States can be complicated, again because of federal law. But, states are introducing provisions to ensure there's equity and everyone has the opportunity to purchase locally grown cannabis at reasonable prices. Some regions also allow retailers to have vertically integrated operations and grow their own products, while other states are not allowing MSOs to operate, thus ensuring that small businesses, especially social equity dispensaries are successful in their endeavors.