How to Open a Dispensary in California

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Are you thinking about opening a recreational dispensary in California? Congratulations!

California has been a cannabis haven for decades. In 1996, voters approved the Compassionate Use Act to allow the medical use of marijuana. In 2016, voters approved a ballot initiative legalizing adult use and establishing a regulated marijuana market. In 2018, legal sales for adult consumers began.

The main statute regulating adult-use cannabis in California is the Medicinal and Adult Use Cannabis Regulation and Safety Act (MAUCRSA).

Although California has a long history of legalization in some form, there is still much volatility in the market. This means it’s not too late to open a dispensary in California.

This guide is designed to help prospective cannabis entrepreneurs understand exactly how to open a dispensary, including key details like licensing, financing, real estate, security, staffing, compliance, inventory, tech stack, and more.

Keep scrolling for a step-by-step process for getting a dispensary open in California, or use the links on the left to jump directly to the information you need.

Before you start, take a moment to review California’s cannabis laws. Current and prospective dispensary business owners need to know and understand the rules.

Learn more about CA cannabis

Guide to California Cannabis Laws

Disclaimer: Always consult your lawyer, accountant, realtor, or other trusted consultants to help you navigate the complexities of opening a cannabis dispensary. The information provided herein is designed to illustrate and educate, but is not to be construed as legal or financial advice.

Plan your California cannabis business

The first step of your dispensary ownership plan is to get your business affairs in order. You need to understand your state’s cannabis laws, create a formal business entity, and prepare to submit your licensing application to the state.

The cannabis regulatory body in California is the Department of Cannabis Control (DCC). The DCC licenses and regulates cannabis businesses in California.

Here are the key elements to planning your dispensary business:

Form a business entity

Forming a legal business with the state is your first step. Work with an accountant and/or lawyer to ensure accuracy, but at a minimum, you will need to decide on and create your business structure with the California Secretary of State.

Next, you will:

  • Get tax ID numbers for the business

  • Open a business bank account at a cannabis-friendly bank or credit union

  • Look into business insurance

Write a business plan

Cannabis is a complicated industry, with more compliance and legal challenges than typical businesses. Having a rock-solid business plan can help you plan for the current state, as well as the future.

A good business plan for CA dispensaries should include:

  • The physical location of your dispensary

  • Funding plan, or where your startup and ongoing capital will come from

  • Sourcing plan for procuring your cannabis products

  • Revenue and cost projections

  • Staffing plan, or who you’ll hire for what roles, and your dispensary org chart

  • Premises diagram (see the reference guide for creating your diagram)

  • Marketing plan

  • Safety and security plan

  • Technology plan, including which cannabis point-of-sale and compliance software you’ll use to manage your dispensary

  • Any other relevant information you want to document

Find a location

Your dispensary location is a critical piece of the puzzle, but a difficult one. You’ll need to find a location in a visible space, with ample parking, and enough room to realize your vision.

But first, and unique to California, is determining whether you plan to have a recreational marijuana storefront, or be a non-storefront retailer (which means delivery only).

Every state has specific regulations about the location of dispensaries. In California, your dispensary must not be located within 600 feet of a school and cities may restrict the number of cannabis businesses within a single area.

Your dispensary needs to be in a municipality that accepts cannabis businesses. 61% of cities and counties in California do not allow any retail cannabis businesses. Find the specifics of your location with this interactive map.

Note that legislation in California can be set by the state AND by your city or county. The city may have different rules and zoning laws than its county. It’s extra important for CA dispensary owners to understand the specifics of their city, county, and state before embarking on this journey.

You will need to have a location chosen to receive an active dispensary license in California. You also will need the municipality’s approval before applying for a license from the state.

Find a local real estate professional who specializes in cannabis real estate to help in your search. Use public resources available to you, like city zoning and administration offices.

Tips for choosing a dispensary location:

  • Focus on spaces that align with your business plan

  • Get a space that's large enough to meet your needs

  • Find an appropriate location to serve foot traffic (and/or have enough parking)

  • Consider opportunities for expansion/growth

  • Stick to your desired budget

  • Don’t just look at monthly costs, but also factor in how much it’ll take to renovate or retrofit the space for your business needs

  • Look at local competition (both existing and planned)

  • Form a good relationship with local governments to make the process easier

Secure funding

Now that you have a plan for your cannabis business, you can start to build a more clear budget for your new marijuana dispensary.

Your startup business expenses will generally fit into these categories:

  • Real estate and build-out - consider both set-up costs and ongoing rent or mortgage expenses. You’ll probably also have initial renovation expenses.

  • Licensing/application fees - the cost of getting your license in the state of California. Also factor in the cost of annual business license renewals.

  • Operational costs - the day-to-day expenses including utilities, business or professional fees, marketing, etc.

  • Hardware, software, security, and other tech - many of these are monthly or annual subscriptions.

  • Staffing costs - the cost of hiring employees, including salaries, benefits, taxes, etc.

  • Inventory and product costs - or the actual expense of sourcing and purchasing your cannabis products.

  • Taxes - cannabis businesses are heavily taxed and can’t participate in normal business write-offs like 280E, so plan ahead for your quarterly cannabis tax payments.

Where will all that money come from? As a cannabis business owner, you have a few options for funding:

  • Self-funding - it’s easiest to open a dispensary if you already have capital from savings or other legal means.

  • Friends and family - another easy way to meet dispensary capital requirements is through loans or investments from family and/or friends.

  • Partners - many cannabis businesses are partnerships, where each partner contributes something meaningful. If you have the dream, and vision, and want to be the active owner, consider finding a financial partner to help with the costs. Just know that no person or entity having direct or indirect control shall be granted, or hold, more than three licenses in a particular class.

  • Loans - depending on your personal financial situation, you may be eligible for a personal loan for the upfront costs of opening a dispensary. You may also be able to secure a dispensary business loan, but be honest with your lender about how the funds will be used; not all financial institutions will work with cannabis businesses.

  • State programs - there are several grant opportunities in California. See the full list and program details.

  • Private funds - whether it’s private equity, angel investors, or venture capital, you may have to look to outside investors to fund your legal cannabis business. This option will decrease your ownership stake in your company.

  • Crowdfunding - another less-popular, but viable, option is to look to the general population to support your business venture.

  • Brokers - cannabis-specific brokerage companies can help you find funding for startup expenses, equipment, and more. FundCanna is one option that serves California dispensary businesses.

  • Social equity programs - State-specific programs, such as Sacramento’s Cannabis Opportunity Reinvestment and Equity (CORE) Program and the interest-free CORE Capital Loan Program or Cannabis Equity Grants Program for Local Jurisdictions, help social equity applicants enter the CA cannabis industry.

What does it cost to open a dispensary in California?

Most sources suggest having between $250,000–$1 million to open a dispensary in California. But that’s not all that helpful. Here’s a formula to give a sense of what to expect. Come back and fill in the details as you know your unique estimates.

Application and licensing fees in California = $12,000

  • Application fee = $1,000
    • Due when you submit your application.

  • Retail license fee = between $2,500-$96,000
    • Due when your application is approved.

  • Annual renewal fee for dispensaries = between $2,500-$96,000

Note: The license and renewal fee is calculated based on your business’s gross annual revenue. This is the amount the cannabis business received before subtracting expenses.

Real estate fees = $125,000

  • Includes annual rent or mortgage premiums, plus upfront design costs

  • Could be higher in more expensive cities, like Los Angeles or San Diego, or for larger remodels.

  • Plan for high costs up-front, but will stabilize over time.

Employee salaries = $300,000

Your store size and operating procedures will determine your staffing needs, but plan for around six employees to start, including a manager, several budtenders, and an inventory specialist. This figure includes an average of $20/hour, plus overtime, benefits, etc.

Professional fees and services = $50,000

This may decrease in future years, but to start, expect to pay for legal, financial, insurance, and other professional consulting fees to get your business started.

Security, hardware, and software = $50,000

This covers all network, security, hardware, and software for your business, including computers, TVs, printers, scanners, internet, and other software like POS, e-commerce, payments, etc.

After your initial investment, plan for at least $2,000 per month in recurring software expenses.

Marketing expenses = $100,000

Perhaps the most variable of your costs when opening a cannabis business, this factors in one full-time marketing staff person (or agency costs per year), plus costs for your website, ads, printing, etc. to promote the dispensary.

Cannabis products = $1,500 per pound

Your cost of products for opening day (plus ongoing stocking) will vary greatly based on your store size, number of SKUs, stock on hand, and supplier rates, but plan for an average of $1,500 per pound of cannabis products, including bulk flower, pre-rolls, edibles, vape cartridges, tinctures, beverages, topicals, accessories, etc.

GRAND TOTAL = $637,700 (not including cannabis product inventory)

*Disclaimer: This is a rough estimate of the upfront and first-year costs of opening a dispensary in California. It is to be used for informational and illustrative purposes only as every market, location, and business will have unique startup costs.

Apply for a California recreational dispensary license

One key unique detail is California has a dual licensing system; cannabis businesses are required to obtain a city, county, or city and county license, permit, or other authorization, before applying for a state license.

The sections below include many links to state-supplied resources and guides to help ensure you’re prepared to submit your application.

The basics of applying for a dispensary license in CA

  • To open a dispensary in California, you need a dispensary license. However, many cities and counties have chosen not to participate in the adult-use marijuana industry in the state.

  • Licensees can choose to apply for a temporary license, or an annual license, but the process is largely the same. The online tool will walk applicants through their specific steps based on which license type is selected.

  • The responsible party can submit the application, but all owners must then log in and provide supporting information and an owner submittal form.

  • All information can be submitted using the state’s online portal.

Apply for a dispensary license in California

Getting a dispensary license in California is an eight-step process. We’ll outline the basics here, but check out this resource from the state for a more detailed walk-through.

1. Complete the local permitting process

    Many cities and counties have their own permitting requirements and local laws for cannabis businesses. Complete any permitting requirements your city or county requires before you apply for a state cannabis license.

    The steps for this will vary depending on your specific area.

    2. Gather your application information and documents

      The DCC has resources to help you create the documents you need during the license process. But generally, here’s what you need to compile:

      Other helpful documents include:

      3. Access the license portal

      This online portal allows you to apply for a license, renew a license, or change an existing license.

      If you need support, here’s a guide for navigating the online licensing system, and here’s one for creating and managing your account.

      4. Complete your application

        Log into the licensing portal, select which type of business or license you’re applying for, fill in the required fields, and upload any needed documents. Make sure you disclose all pertinent information and answer every question thoroughly and accurately.

        The DCC licensing systems let you save your progress as you go, you don’t need to complete it all in one sitting. When you finish your application, sign and submit it.

        The state is generous with its guides and resources. This 44-page application guide with screenshots shows you exactly what to click.

        Also, refer to the application checklist to ensure nothing is missed.

        5. Pay your application fee and submit your application

          When you finish your license application, the system will tell you how to pay your application fee. The DCC cannot process your application until you pay your application fee.

          Refer to this guide on paying fees in the licensing system.

          6. Answer any (and all) emails from the licensing team

            All individuals on the application’s list of owners will receive an email. Each owner must follow the instructions in the email, log in, and submit an owner submittal form. Each owner also needs to provide additional information, such as employment history, criminal convictions, other cannabis licenses, and finally upload documents, including their government-issued photo ID.

            Once all required owner submittals are received and the application fee is paid, the Bureau will review your application.

            The DCC reviews license applications in the order received. The more complete your information, the faster the review process will be.

            During the review process, DCC staff will:

            • Check that your application is complete

            • Contact the city or county where your business is located to confirm that you meet local requirements

            • Review your business owners’ criminal history, if any

            • Review the information you submitted to make sure your business meets the requirements

            7. Pay your license fee

            If your application is approved, you’ll receive an email with instructions about how to pay your license fee. You can pay the fee through the licensing system via bank account/check, money order, or credit card, just like you did with the application fee.

            Your license will be issued once the DCC receives your payment.

            8. Post your license

              Once your license is issued, you can download your license certificate from the licensing system. Post your certificate in a visible place near the entrance of your business so visitors can see it.

              DCC licenses are good for one year. You will need to renew your license every year.

              California social equity program for cannabis businesses

              The DCC is committed to providing equity to communities harmed by cannabis criminalization, both at the state and local levels.

              At the state level, equity business owners are eligible for waived (and/or deferred) license fees and technical support through the state licensing process. Check eligibility here.

              There are also localized programs to support those harmed by cannabis criminalization. If you’re an equity business owner, you may be able to get help through your local program, including:

              • Priority application processing

              • Access to business partnerships

              • Interagency advocacy

              • Reduced or waived local fees

              • Technical support, like one-on-one consulting and training

              • Help with navigating cannabis licensing and regulatory requirements

              • Low- or no-interest loans or grants

              Contact your city or county to see what resources are available in your area.

              Apply today: Find out if you qualify for Flowhub’s Social Equity Program

              Design your California dispensary

              Dispensary design isn’t just about where your dispensary is, or what it looks like. It’s how your shoppers experience your brand.

              Dispensary store layout
              Pictured above: The bank model – a common dispensary layout

              Here’s a short list of your considerations in store design and layout:

              • How customers will move throughout the store

              • Whether they will pay at a terminal, handheld device, or kiosk

              • Whether there are different pathways for in-store vs. online orders

              • How your products will be displayed/showcased

              • Your brand elements and design

              • Use of entry or waiting room space

              • Security concerns of doorways

              • Where secure inventory is stored (both on the floor, if applicable, and in a vault)

              • Where staff will stand and work

              • Breakroom or safe staff area

              • Bathrooms

              Beyond the design basics, California has a few requirements that impact your store’s layout and operations:

              • Retailers can sell cannabis goods between 6:00 a.m. and 10:00 p.m. Your city or county can set more restrictive hours. This means:
                • An in-store sales transaction must be finished by 10:00 p.m.

                • Delivery drivers must return to the retail premises no later than 10:00 p.m.

              • Delivery is permitted in California.

              • Dispensaries are permitted to have limited amounts of cannabis used for display purposes, samples, or immediate sale. The rest must be stored in a secure room, safe, or vault.

              • Different municipalities have varying rules are store layouts, including the use of a secure waiting area. Be sure to understand local cannabis laws while planning your California adult-use dispensary. And don’t forget you need to submit a premises diagram as part of the application process so you’ll need to consider your design early.

                🤔🏬 Take the Store Layouts Quiz to find the perfect layout for your dispensary.

                Create a safe and secure California dispensary

                Licensed retailers, microbusinesses, and licensed nonprofits shall implement security measures reasonably designed to prevent unauthorized entrance into areas containing cannabis or cannabis products and theft of cannabis or cannabis products from the premises.

                These security measures shall include, but not be limited to, all of the following:

                • Prohibiting individuals from remaining on the licensee’s premises if they are not engaging in activity expressly related to the operations of the retailer.

                • Establishing limited access areas accessible only to authorized personnel.

                • Other than limited amounts of cannabis used for display purposes, samples, or immediate sale, storing all finished cannabis and cannabis products in a secured and locked room, safe, or vault, and in a manner reasonably designed to prevent diversion, theft, and loss.

                • Areas that shall be under video surveillance shall include the following:
                  • Areas where cannabis or cannabis products are weighed, packed, stored, loaded, and unloaded for transportation, prepared, or moved within the licensed premises.

                  • Limited-access areas

                  • Security rooms

                  • Areas storing a surveillance system with at least one camera recording the access points to the secured recording area.

                  • Entrances and exits to the premises shall be recorded from both indoor and outdoor vantage points that allow the cameras to record activity within 20 feet.

                A retailer shall notify the department and the appropriate law enforcement authorities within 24 hours after discovering any of the following:

                • Significant discrepancies identified during inventory. The level of significance shall be determined by the department.

                • Diversion, theft, loss, or any criminal activity pertaining to the operation of the retailer.

                • Diversion, theft, loss, or any criminal activity by any agent or employee of the retailer pertaining to the operation of the retailer.

                • The loss or unauthorized alteration of records related to cannabis or cannabis products, registered qualifying patients, primary caregivers, or retailer employees or agents.

                • Any other breach of security.

                Learn the basics of dispensary security

                Read the Dispensary Security Guide to find out where most dispensaries are at risk, then take action with best practices for both physical security and cybersecurity.

                Hire and retain qualified dispensary employees

                Now that you’re getting closer to opening day, it’s time to hire and train your dispensary employees. This team is vital to the success of your dispensary.

                First, create your dispensary org chart. Based on your business plan, location, store design, and vision, what role are you going to play in the day-to-day operations and what additional staff do you need? What is the hierarchy? What benefits will you offer? And do you have the funds to pay your staff appropriately?

                As a starting point, you’ll need someone to manage your store, budtenders or cannabis sales associates to serve customers and fulfill orders, someone to greet your shoppers (and secure the entryway), security, and someone to manage inventory and/or compliance. Based on the size and complexity of your business, you might need more or fewer people on your team.

                Be sure to understand California’s labor laws, both specific to cannabis businesses, and generally. These could include procuring cannabis employment IDs, processing fingerprints and background checks, age requirements, and mandating attendance of certification training, payroll taxes, at-will parameters, workplace safety laws, and more.

                Understand compliance

                At this point, you should understand cannabis laws in California and what you need to do to keep your dispensary compliant.

                As a reminder, California adults 21 years of age and older with a valid, government-issued ID can purchase and possess no more than:

                • 28.5 grams of non-concentrated cannabis

                • 8 grams of concentrated cannabis

                • 6 immature cannabis plants per day

                California's medical marijuana program allows patients and primary caregivers to purchase and possess 8 ounces of medical marijuana per day.

                DCC has partnered with Metrc to make improvements to the California Cannabis Track-And-Trace (CCTT) System, which all licensees are required to use to track cannabis from seed to sale. Metrc offers a wealth of education and training for new and prospective dispensary owners. We recommend attending those trainings and taking advantage of the California-specific resources provided by Metrc.

                Only licensed cannabis businesses can use CCTT, and within 10 days of getting your license, you must:

                • Complete account manager system training

                • Request access to the system

                • Verify your account

                • Order plant and/or package tags

                Cannabis stores in California are required to track all adult-use cannabis and cannabis products at every stage of their lifecycle. This includes all transportation to the store, up until the point of being sold to a customer, delivered to a testing facility, or disposed of/destroyed.

                It’s imperative that licensees not only use Metrc to its full ability but integrate it with their POS and inventory management software to ensure compliance. Flowhub can meet all the state’s requirements for product intake and control. We’ll talk more about your software vendors in a moment.

                The state of CA has a few resources and guides to using CCTT and Metrc.

                To learn more about Metrc, including how to report to Metrc, the difference between plant and package tags, making sense of Metrc receipts, managing inventory, and more, consult these resources:

                Source and intake cannabis products

                Now’s when things really start getting fun: ordering and receiving your product! If you’re not a vertically-integrated company, or only have a dispensary license, you’ll need to find cannabis growers, manufacturers, and/or distributors to supply your store.

                Cannabis stores in California are authorized to sell:

                • Cannabis goods that have passed testing and quality assurance review, such as:
                  • Packaged flower

                  • Pre-rolls

                  • Topicals

                  • Edibles

                • Cannabis accessories, such as:
                  • Pipes

                  • Rolling paper

                  • Vape cartridge batteries

                • Branded merchandise for a licensed business

                As you’re looking for suppliers, here are a few things to consider:

                • What products they carry (think about your product mix)

                • The taste and quality of the products

                • Fulfillment (how do they get products to you and when)

                • Prices (and ability to negotiate bulk discounts)

                • Testing processes and results

                • Reliability (will they run out suddenly, stop communicating, etc.)

                • Process for placing orders and overall organization

                You also want to ensure your suppliers are licensed facilities, and in good standing with the state.

                Note: The DCC requires all batches of cannabis goods to be tested before they can be sold. Learn more.

                Packaging and label requirements

                All cannabis or cannabis products for sale in California must be packaged and labeled according to the following rules.

                Packaging must be:

                • Child-resistant (Learn more about these requirements)

                • Not attractive to children

                • Tamper evident

                • Resealable (if it contains multiple servings)

                • Opaque (if it is an edible)

                • True, factual, and not misleading

                Use the packaging checklist to make sure your product is properly packaged.

                Cannabis product labels have two parts:

                • Primary panel – the part of the label displayed to the consumer at retail; typically found on the front or the top of the package
                  • Product identity: A generic or common name that describes the product (e.g., chocolate, fruit chew, vape cartridge, lotion, tincture).

                  • Net weight or volume (in both metric and U.S. customary units) of the contents of the package.

                  • Universal symbol: The California symbol that identifies an item as containing cannabis. It must be printed in black or white and made conspicuous by printing the symbol on a contrasting color. It must be no smaller in height than 0.5 inches.

                  • For edible cannabis products, the words “Cannabis-Infused” or “Cannabis Infused” must be listed above the product identity, in a bold font and larger text size than the one used for the product identity.

                • Informational panel – any other part of the label that is not the primary panel
                  • Manufacturer name and contact information: Must be a name listed on the license certificate (either the legal business name or the registered DBA), and their phone number or website.

                  • Date of packaging for retail sale*: Include month, day, and year (e.g., PKG: 02/23/19).

                  • Government warning statement for cannabis products* (in capital and bold letters). “GOVERNMENT WARNING: THIS PRODUCT CONTAINS CANNABIS, A SCHEDULE I CONTROLLED SUBSTANCE. KEEP OUT OF REACH OF CHILDREN AND ANIMALS. CANNABIS PRODUCTS MAY ONLY BE POSSESSED OR CONSUMED BY PERSONS 21 YEARS OF AGE OR OLDER UNLESS THE PERSON IS A QUALIFIED PATIENT. THE INTOXICATING EFFECTS OF CANNABIS PRODUCTS MAY BE DELAYED UP TO TWO HOURS. CANNABIS USE WHILE PREGNANT OR BREASTFEEDING MAY BE HARMFUL. CONSUMPTION OF CANNABIS PRODUCTS IMPAIRS YOUR ABILITY TO DRIVE AND OPERATE MACHINERY. PLEASE USE EXTREME CAUTION;”

                  • UID number: The unique tracking number issued through the track and trace system.

                  • Batch or lot number: Instructions for use and any preparation needed* (e.g., the method of consumption or application).

                  • List of all ingredients* (in descending order by weight or volume): Include sub-ingredients, if any. Note: listing of flavorings must be compliant with 21 Code of Federal Regulations section 101.22.

                  • Allergens* (if applicable): The word “Contains,” followed by a list of any major food allergen in the product. The major food allergens are milk, egg, tree nuts, wheat, peanuts, soybeans, sesame, fish, or crustacean shellfish. Use the format prescribed by the US FDA for food labeling (21 USC §343(w), paragraph (1)(A) or (1)(B).)

                  • Artificial food colorings* (if applicable)

                  • “KEEP REFRIGERATED” or “REFRIGERATE AFTER OPENING” * (if perishable after opening).

                  • “FOR MEDICAL USE ONLY” * (if applicable): Manufacturers must include these words on the label if the product contains a THC concentration that can only be sold in the medicinal market.

                  • Edible product labels must also include Sodium, sugar, carbohydrates, and total fat per serving* (in milligrams or grams).

                * Indicates labeling information that may be placed on a supplemental label

                Refer to the labeling checklists to make sure your product has the required information.

                Inventory intake

                Once your cannabis products arrive, you must “intake” them into your store in a specific way to remain compliant with Metrc. Before you can bring physical inventory into your store, you must receive and review a manifest. The manifest is created by the supplier — which will either be you or other cannabis companies.

                The manifest includes the harvest, weight, unit of measure, cost, etc. of the product.

                You must review the manifest, and if everything is correct, accept it. When the package comes in, you'll physically inspect the package, and make sure it’s exactly as ordered.

                You then accept it in Metrc, which tells Metrc that you are in legal possession of this inventory.

                Now you can stock your shelves and sell the product. But you’ll also need to develop SOPs for intaking and auditing your inventory.

                Pro tip: Use this 📝 Inventory Intake SOP to document your processes!

                Choose your network, hardware, and cannabis tech stack

                Your technology stack is crucial to success as a cannabis business owner. Some are must-haves for compliance, like your security system and cannabis point-of-sale, while others are vital to a pleasant and seamless customer shopping experience.

                Here are just a few of the technology solutions you’ll need to consider for your dispensary:

                • Network

                • Hardware
                  • Printers (both letter-sized and receipts)

                  • TVs

                  • Cash drawers

                  • Computers (for staff work, like inventory)

                  • Tablets or terminals

                  • Barcode scanners

                • Software
                  • POS

                  • Ecommerce

                  • Payment provider for non-cash transactions

                  • Digital menus

                  • Kiosks

                  • Loyalty programs

                  • CRM

                  • HR/Payroll tools

                  • Accounting software

                  • Analytics tools

                  • Social media management and monitoring

                  • Website

                You don’t need to invest in every cannabis-specific technology solution, but make sure you’re using tools that will help you stay compliant and enable you to better reach and satisfy modern shoppers.

                Remember: While non-cannabis-specific tools exist, they often can’t handle the complexities of the cannabis industry, such as compliance and inventory management. Be sure to thoroughly vet every potential partner to ensure that they can handle your actual needs.

                cannabis technology

                📖 Read the Guide to Cannabis Tech Software for a complete list of top cannabis companies for your dispensary tech stack.

                Market your dispensary

                Now that your store is ready, your team is trained, and all your technology is set, it’s time to get the word out.

                Dispensaries notoriously have more challenges with marketing than traditional businesses because of stigma, regulations, and the federal illegality of the cannabis market.

                But there are still many marketing tactics you can use to promote your new dispensary:

                1. Develop a beautiful, functional dispensary website. Enabling online ordering through your website is a great way to appeal to digital-friendly shoppers. Focus on product-based SEO to expand your reach.

                2. Fine-tune your social media presence (though be careful with what you post!).

                3. Develop a rewarding loyalty program.

                4. Consider events to attract new customers to your store.

                Thinking about other forms of advertising?

                Here are the basic rules for cannabis-related advertising in California:

                • All advertisements and marketing must accurately and legibly show the licensee’s license number responsible for the content. This applies to technology platforms displaying ads on web pages and outdoor advertisements.

                • Any advertising or marketing placed in broadcast, cable, radio, print, and digital communications shall only be displayed where at least 71.6 percent of the audience is reasonably expected to be 21 years of age or older, as determined by reliable, up-to-date audience composition data.

                • Any advertising or marketing involving direct, individualized communication or dialogue controlled by the licensee shall utilize a method of age affirmation to verify that the recipient is 21 years of age or older before engaging in that communication or dialogue. The method of age affirmation may include user confirmation, birth date disclosure, or other similar registration method.

                • All advertising shall be truthful and appropriately substantiated.

                A licensee shall not do any of the following:

                • Advertise or market in a manner that is false or untrue in any material particular, or that, irrespective of falsity, directly, or by ambiguity, omission, or inference, or by the addition of irrelevant, scientific, or technical matter, tends to create a misleading impression.

                • Publish or disseminate advertising or marketing containing any statement concerning a brand or product that is inconsistent with any statement on the labeling thereof.

                • Publish or disseminate advertising or marketing containing any statement, design, device, or representation that tends to create the impression that the cannabis originated in a particular place or region, unless the label of the advertised product bears an appellation of origin, and such appellation of origin appears in the advertisement.

                • Advertise or market on a billboard or similar advertising device located on an Interstate Highway or on a State Highway that crosses the California border.

                • Advertise or market cannabis or cannabis products in a manner intended to encourage persons under 21 years of age to consume cannabis or cannabis products.

                • Publish or disseminate advertising or marketing that is attractive to children.

                • Advertise or market cannabis or cannabis products on an advertising sign within 1,000 feet of a daycare center, school providing instruction in kindergarten or any grades 1 to 12, inclusive, playground, or youth center.

                • Publish or disseminate advertising or marketing while the licensee’s license is suspended.

                • Participate in giveaways of any amount of cannabis, cannabis products, or cannabis accessories, as part of a business promotion or other commercial activity. This includes BOGO promotions, free products with donations, contests, sweepstakes, or raffles. (Note: This excludes compassion donations to medical marijuana patients).

                How to choose a cannabis retail POS system

                Choosing a point-of-sale system is a critical decision. Why? Because every POS is different, but you also have to ensure that the software you choose can help you stay compliant.

                Here are 10 tips for choosing marijuana retail software.

                Flowhub cannabis point of sale for Maryland

                What to look for in a cannabis POS:

                1. State compliance tracking: Metrc (and the other state reporting tools) is why software is so important. Having an API integration that manages this all seamlessly is vital to save you time and provide peace of mind that you’re staying compliant.

                2. Hardware compatibility: Make sure your software and hardware choices are compatible. Pick a cloud-based software that doesn’t restrict hardware options so that you don’t incur any additional hardware costs or have to change hardware if you change point of sale systems later.

                3. Customer support: You need to get up and running quickly, but you also need ongoing support to answer any questions as they arise. As you demo different software, ask about the ongoing support process and the level of support you’ll receive.

                4. Ease of use: Software that fuels your medical marijuana or adult-use retail stores must be easy and intuitive. Staff need to be able to learn it quickly. As you demo different POS systems, pay attention to how the system functions and whether you think it’ll make your staff more productive.

                5. Inventory management: Strong inventory capabilities will keep you compliant and competitive. Similarly, look for software that makes auditing easy, like having a mobile app. The right software should save you time and money in the long run.

                6. Built-in compliance: Software isn’t just important for compliance related to state reporting (like Metrc), it also should help you stay compliant with state marijuana laws, such as purchase limits. Make sure the software you choose has built-in safeguards that address your market-specific needs.

                7. Discrepancy reporting: Your Metrc inventory, physical inventory, and point of sale inventory should always be in alignment. Your software should include built-in tools to help you identify and resolve inventory discrepancies.

                8. Activity tracking: In an industry with more loss and theft than the average, it’s important that you can track all activities in your marijuana store. This allows you to see what employee made what actions, and when those actions occurred, like making a sale, opening a drawer, moving inventory, etc.

                9. Open API and integrations: Is the software compatible with other vendors? It’s important to consider integrations, especially if you’re interested in online menus, delivery, loyalty programs, or other technology offered by partners.

                10. Specialization: Consider the best software for each part of your business. If you have marijuana cultivation facilities, manufacturing facilities, testing laboratories, and cannabis retail sales operations, it’ll be tempting to pick one software for it all. Better visibility is tempting — you can’t deny that — but all software is best at one thing. If you choose one for all, it means you’ll be putting the other two parts of your business at a disadvantage. Instead, look for vendors who integrate seamlessly.

                Need help opening your dispensary?

                Opening a dispensary in California is quite an accomplishment. The market is maturing, but always ripe with opportunity!

                If you have any remaining questions about opening a dispensary in California, our team of cannabis retail experts would be happy to support your journey.

                Book a meeting with Flowhub to chat!

                Amber erickson

                Amber Erickson

                Amber's goal is to create helpful and engaging content to empower cannabis professionals to run a successful and compliant dispensary. Connect with Amber on LinkedIn.

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