Marijuana dispensaries: High profits. High costs.
Here’s a new article about the profits and costs associated with operating a marijuana dispensary by my good friend, and college intern, Skye Robertson.
Plants, plants, they’re good for your health, the more you grow, the more you… take in as annual revenue? Dispensaries in cannabis legal states have been more than profitable in their annual sales and distribution of cannabis products. Some dispensaries in California claim to make upwards of $20 million in a calendar year. This is more than some Apple stores make. Of course, not all dispensaries are making mega millions each year, especially because more and more dispensaries are being opened each year as cannabis is becoming legalized in more and more states. Not even marijuana is exempt from the laws of supply and demand. The more businesses there are, the less business each one gets. Currently, Denver cannabis businesses are facing cash flow crunches due to market saturation which has driven down product prices.
That being said, all of this profit may seem enticing enough to make you go out and start your own business; however, the hurdles to jump over to start a dispensary can be sizable enough to compare to mountains. States require a dispensary application which precedes licensing; combined the two can exceed $20,000. After obtaining a dispensary license, owners may be required to obtain a cultivation license for the growing of their products, which can cost a few extra thousand dollars. If these hoops aren’t big enough to jump through, many states require extra fees, and residency in the state before this process can even begin. Add to these costs the onerous effects of IRS Code section 280E and a general lack of banking or conventional loans, and the obstacles to opening a cannabis business can be quite large. Fortunately, cannabis is a growing industry and opportunities abound for the driven and focused businessperson.
To help you picture the profits of a dispensary, this is a 2015 graphic from The Marijuana Business Factbook, depicting just how much money a dispensary makes in comparison to other stores. Despite all of the taxes and fees, dispensaries are almost making as money as Nike, Adidas and Under Armour retailers. Regardless of the hurdles and hoops to jump through to open a dispensary, it seems as though the cost of growing a plants is worth it to grow a business, and a states economy.