5 Things You Need to Know When Buying a Cannabis Business

The idea of owning and operating a cannabis dispensary is often romanticized. It’s not as simple as finding a consistent cannabis source and hanging a sign on the door. Nor is it as simple as buying a business with a functioning cash register. 

In fact, cannabis is one of the most regulated and taxed industries you could choose to be a part of. But it can also be one of the most rewarding. Here are five things you need to know when buying a cannabis business. 

1. Complex Legal Landscape

As you may already know, cannabis remains a legal grey area. In many states, it’s still illegal, even for medical use. No two cannabis compliance governing agencies are the same, which means you need to clearly understand the cannabis regulations where you’re trying to acquire your business. Set your expectations according to what is legally permissible. 

Some states have cannabis regulations with strict guidelines for medical cards, THC volume, purchase maximums, staff qualifications, and more. If you have a vision of how you want your dispensary to operate, make sure it aligns with all state cannabis regulations

2. Financial Transactions

Dispensaries have the potential for high profitability depending on a number of factors including state cannabis regulations, taxes, and location. These businesses often have difficulties obtaining financial services due to federal banking restrictions. 

Cannabis is still federally illegal, which means you’ll have a lot of cash transactions. Obviously, given the increasing prevalence of dispensaries, there are workarounds. Before you purchase or invest, ensure the financial transaction system meets cannabis compliance standards. 

3. Market and Branding

In some states, dispensaries are still a novelty and it doesn’t take much to stand out and find customers. In established cannabis-friendly states like California, Colorado, and Washington, consumers often have their favorite places to shop.

Evaluate your potential demographic and ensure that your branding and marketing efforts differentiate your store and align with what customers are looking for. A serious look at the marketing strategy (hopefully the business has one) could be the difference between a successful and a struggling cannabis company. 

4. Cannabis Compliance

There are many elements of cannabis compliance that must be considered to maintain good standing for your cannabis business. 

If you’re purchasing or investing in an established dispensary with an existing license, you’re one step ahead already. Many states only grant a limited number of cannabis retail licenses, which are costly and require a lot of work to obtain. Each state has different licensing and permits requirements. 

Detailed record-keeping is also crucial for cannabis compliance. Many states require tracking from seed to sale, and any discrepancies along the way can expose your business to license revocation

Through compliance management software specifically designed for your needs, Simplifya makes cannabis compliance easier. 

5. Security Concerns

Dealing with large amounts of cash is certainly a security concern. If you’re considering investing in or purchasing a cannabis business, you need to know how this part of the business operates. Not only is this important for peace of mind, but some dispensaries have had their licenses revoked for improper security. 

Want to Make Buying a Cannabis Business Simple?

The legal landscape of cannabis regulation and compliance is nearly impossible to navigate without professional help. To build a profitable business you can be proud of, use our compliance resources to get you started off on the right foot. Stay on track amid changing cannabis regulations.

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