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How to Start a Dispensary Business in California

*Video by Daily MGMT for The Pottery in Mid-City Los Angeles (Opened March 3, 2018)

With marijuana legalization in California having gone into effect, you can bet that people are lining up to start a dispensary business. If that’s you, there are some things you need to be aware of to ensure your success.

Making Sure You’re Legal

The first step to starting a dispensary or any other business is to make sure you’re legal. For most businesses, this means a license to operate. However, in the cannabis industry, you must take another step. To purchase the right license, reach out to industry leading private equity firm, Mar Vista Partners. They're known to create and assist in dozens of licensed operations in California alone.

Even though marijuana will be legal in California, it doesn’t necessarily mean you’re free to open a dispensary. Some counties may not issue licenses, meaning opening a business within those limits is illegal. In addition to filing your Articles of Incorporation, you must also register for a cannabis tax permit since sales of marijuana are taxable. If the county you are in does allow for a cannabis business license, you may be subject to zoning laws as well as required to submit additional forms.

You will also need to check that your bank will allow you to collect money from customers through credit or debit card transactions. Some banks may restrict this activity or not allow you to have a back account at all for a cannabis-related business.

Staying on top of any changes or amendments to the law will be crucial for you to avoid any scrutiny or possible interference from the Federal government.

Spreading the Word

Is it legal for you to advertise a cannabis-related business? Yes, but you will be required to follow any restrictions or policies in place by the advertiser.

For example, social media is an excellent way to promote a business. However, many cannabis businesses have had trouble promoting themselves on platforms like Facebook. Some haven’t been able to get their ads approved, while others have had their pages blocked altogether. Name of the game to deal with deleted pages.

You can also place ads in 420-friendly publications in your local area or optimize your website. This would involve having great content like blog posts that both speak to your audience and make the search engines happy.

Getting Quality Product

Without quality product, your business is not a business. Not to mention if you get your product from a source that hasn’t been vetted, you could put your business in jeopardy.

Since marijuana is still illegal in the Fed’s eyes, any cannabis business, regardless of location, is subject to a search and seizure. But, they often will turn a blind eye if you’re operating a clean, legal shop. What most cannabis dispensary owners don’t realize is that even if they’re doing everything right, the product they acquire has the potential to get them in trouble.

If the product you acquire doesn’t follow the correct laws and guidelines, the Fed’s will go after the supplier and anyone they do business with.

To stock your dispensary with quality product and avoid any legal issues, you need to work with a reputable distributor [insert link to page]. Your distributor should not only follow the laws in place, but they should also obtain their supply from a quality source. The product should be tested on a regular basis and practices should be in place to ensure quality and freshness.

Successfully Starting a Dispensary in California

Starting a dispensary in California or any state is not for the light-hearted. Many aspects of these businesses are still being ironed out given the conflicts between state and federal law. And more changes to laws and regulations, whether good or bad, are likely to bombard the industry in the future. You should put together a solid business plan and look into contacting a lawyer to ensure your business’s success and longevity.

If you’re looking to start a dispensary in California, visit our website to learn how Highline Distribution can assist you in your new venture.

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