Regardless of your own personal attitudes toward the use and legalization of cannabis products, the reality is that the pot industry isn’t going anywhere. And while canna-biz might not be growing at the pace many predicted or hoped, its presence in the consumer marketplace is undeniable. Whether for medicinal or recreational use, edibles, tinctures, flower and their derivatives are finding their way into new retail outlets all over the country.
Here are some numbers: As of this writing, 39 states have legalized cannabis for medicinal use and 24 states have made recreational consumption legal as well. It is expected that another 4 states will be voting on legalization by 2026. In California alone there are over 3500 legal dispensaries, over 800 in Oregon, over 650 in Colorado, over 2000 in Oklahoma and about 400 in New York State. The number of licenses in New York continues to grow, while in Oklahoma state issued cannabis retail licenses have decreased by about 20% in the last 2 years.
Once a pot law is passed, it can take years before the opening of dispensaries. In each state and municipality where legalization has been approved, it’s not uncommon for governmental machinations to slow the roll-out of sales venues. Each community within that state must decide if they will permit the sale of cannabis or not. Sometimes it’s by voter approval, and many areas choose “not”.
Where sales are allowed, each municipality must codify a vast array of criteria for where sales will be permitted, including, where products can be grown, manufactured & packaged; how much local and state pot tax will be added; the conditions and visibility of store fronts and their signage; proof of applicants’ financial solvency and backing; retail security requirements; how much the state and local governing bodies will charge for specialized pot sales permits and distribution licenses; among many other, sometimes onerous, criteria. Restrictions and limitations like the number of permits, etc. will vary by community and how detailed and bureaucratic they want to be. As a result, tight enforcement is mandatory and commonplace.
Like any other retail business, cannabis dispensaries are faced with the usual range of opening and operational considerations. These include finding acceptable retail space, negotiating rental/purchase and build-out, hiring the right people, establishing vendor relationships and accounts to acquire inventory, setting up billing, payment and point-of-sale systems, accounts for paying employees, and creating visual systems such as logos, marketing and promotional campaigns. Those hired for these mission-critical tasks should have an equal or higher level of expertise and proficiency as would be needed for any other business.
The cannabis industry is creating jobs. In addition to those with retail operations experience, skills in packaging design, inventory control, security, computers, online ordering, website management, and human resources, among other disciplines will all be in increasing demand. Science-oriented specialists who focus on product testing for cleanliness and product purity among other details are also needed. As cannabis laws evolve and there is more wide-spread legalization and common codification, expect that the retail specialists, “bud tenders,” as they’re known, will need to have a particular certification (presently in development) to excel in that role, not unlike a sommelier in the wine industry.
Costs for entry into the industry are highly prohibitive for many Canna-preneurs. Each state and county have their own application process and fees, in addition to any local municipal application and business license operation fees. Annual state cannabis licenses can run in excess of $100,000, depending on location and size of retail establishment.
While most states report there is a glut of cannabis-related product available, you’d think that the dispensaries would be making good money. A few are, especially the ones with large corporate financial backing that are either part of a retail chain or part of an affiliate-buyers group that provides support to smaller operations. But most of the independently owned and operated stores are struggling.
The success of legal cannabis sales within a community is partly determined by the greed of its political leadership. Many municipalities erroneously believe that cannabis sales will be a solution to their budget constraints, and a giant boom to their tax coffers. Each community decides how much tax and fees to add on to regular state sales tax (if any) forcing up the price of each product. As they codify requirements and licensing fees, the cost of doing canna-business is magnified, becoming unnecessarily prohibitively expensive and many businesses do not succeed as a result.
Product safety and reliability standards were added to state regulations intended to protect consumers to ensure that what consumers were buying wasn’t contaminated with pesticides and other harmful chemical additives used in the cultivation, manufacturing and processing of certain cannabis goods. The onus of compliance falls on the growers and retailers, adding another layer of expense and bureaucratic compliance that further increases product pricing and retail headaches.
It takes about the same level of commitment, passion and knowledge to succeed in the canna-space as it does any other retail environment. In anticipation of the eventual federal legalization of cannabis and related products, professionals in the industry are formulating standards and practices for the commercial growing, processing, distribution and sales of the once tabu “evil weed.” Yes, it’s a slow growing, and to some, a questionable industry. But for those intrepid few who like challenges, they will make concerted efforts to ensure their careers don’t go up in smoke.
The preceding content is not to be construed in any way as an endorsement for the consumption of cannabis and/or any of its derivative products!
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