How cannabis dispensaries navigate their store opening


So far, thirty-seven states have legalized medical cannabis in one way or another – Connecticut, New Mexico, New York and Virginia were the last to allow recreational marijuana ( for adults) in 2020 and 2021. This means more growth opportunities for clinics. And a host of new restrictions to maneuver to open shop.

One of the most difficult, according to Retail Brew, is zoning, which varies among states and even municipalities.

Proximity to schools, daycares and churches is tightly controlled, said Julie Winters, director of operations at Ayr Wellness, which takes care of everything from growing to selling cannabis. And it’s a lot of back-and-forth with different agencies, she added, to make sure their stores are in high-traffic areas that are easy to access.

“Eight to ten years ago we were faced with [being put] in the alleys and saying, “This is where you can be,” Winters explained. “It’s difficult when you’re already dealing with the stigma of cannabis. “

While malls are now reporting more openness to dispensaries, especially when trying to fill empty storefronts, much of the current legislation relies on how states have approached the medical market, we said. says Frank Perullo, Chief Strategy Officer of Ascend Wellness Holdings (AWH). .

Perullo, for his part, actually prefers places with tighter restrictions, drawing a comparison between Colorado and Massachusetts. In the first, he said, the state had “most licensing powers” over the municipality, which led to an influx of stores on top of each other. In the latter, it was the opposite: “If you’re trying to get a location in Massachusetts, you have to [it] to be blessed by both the municipality and the state.

“We are looking to invest our money in states where the licenses are limited and to go very far, not wide,” Perullo said. “We don’t try to plant a flag in a lot of things.”

AWH

Ayr, who operates more than 60 dispensaries across the United States, is thinking more of getting into the field. This year, he’s prioritizing growth efforts in Pennsylvania (he’s already opened three stores, and has two more in the works), where only medical cannabis is legal.

Winters told us it could take anywhere from six months to a year to get licensed in their state, depending on what the companies are looking to do. It costs $ 5,000 just to apply for a dispensary to open, then $ 30,000 for each location if approved. (These prices go up to $ 10,000 and $ 200,000, respectively, for producers / processors.)

Besides the $$$, Winters said businesses need to spend time connecting with locals and debunking misconceptions.

But: “Once people see how much [cannabis] is and how it works … you start to see cities and towns and states really embrace it and say, “It makes sense to our communities. “

Dispense wisdom

Given all the hurdles and the lack of diversity in the space, Maryland-based Curio Wellness, the state’s largest cannabis grower by market share, decided to go the franchise route. to open dispensaries.

It unveiled a $ 30 million fund last year, with the aim of opening up the cannabis landscape to more entrepreneurs, Curio Registry Jerel told us.

  • Less than 10% of cannabis companies are owned by black or Hispanic operators, according to a 2017 survey by the Marijuna Business Daily.
  • Curio’s fund aims to invest in up to 50 women, minorities and veterans with disabilities.
  • While some states have licenses dedicated to under-represented groups, it still hasn’t done much to boost diversity, industry executives told Axios.

“Most people who have found themselves in a dispensary have it either because they were interested in cannabis or because they saw it as a financial opportunity,” said Registry, who runs the fund. “But they very rarely had retail experience, so we wanted to create a mechanism to provide operational support. “

Curio’s fund will provide franchisees – who will live under the Far & Dotter banner – 93% of the capital needed to open a dispensary, with the aim of helping them transition to full ownership in three years. (The company expects there will be 40-50 franchises to start, which will begin opening next year.)

Well-being curiosities

Well-being curiosities

Beyond licensing hurdles, Curio plans to teach entrepreneurs tips and tricks about product selection and marketing. It should come as no surprise that there is also a gray area around how cannabis companies can market themselves to attract customers. (See Marketing Brew’s deep dive here on how businesses are navigating the weeds online.)

Julie Winters of Ayr, for example, told us that the company cannot use images of a marijuana flower and anything that might appear to be aimed at children in its advertisements.

“This is definitely one of the biggest challenges in our industry, and it varies from state to state,” she said. “But we have to be able to let people know that we are open. ”

  • In Massachusetts, there is the 85% rule: advertising is only suitable in cases where the 85% of the audience should be over 21 years old.

David Grigsby, who works with cannabis drink brand Rebel Coast, shared a similar concern. He previously told Retail Brew that his cans had a California warning label on them, so they couldn’t produce and sell in another state, like Maryland, without all new packaging, given the various restrictions.

Come in

Once people walk into a dispensary, cannabis companies also need to consider the apprehension of a new customer. The deli counter-style model, where people line up to order, is outdated and intimidating, explained Jeff LaPenna, CEO of The Peak Beyond. The emphasis should be on a seamless experience.

  • The Peak Beyond provides cannabis dispensaries with interactive displays that allow buyers to view product information and easily discover new items.

“In a normal shopping experience, I can walk around the store, I can discover physical packaging, I can discover a brand’s message. I can actually physically touch and smell the product, ”he said. “We are bringing this back to the cannabis industry.”

For AWH, the mission is simple: to give the customer what they want, no matter who actually creates the goods.

“If you look at this industry… a lot of companies are trying to sell their own products through their own doors,” AWH’s Perullo said. “We love to have a mix… because if you want something and love it, we want you to get it in our store. It does not matter [if] we produce it or not.

To this end, Perullo is betting on the longevity of cannabis: “First we find the location, then we take care of what we need to do. Location is everything. We build the business for five, 10, 15 years.


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