Overlooked Cannabis Dispensary Insights: Tips From The USVI
Three Areas Of Focus For Retail Dispensary Success
Dispensary licenses are far and away the most popular and common cannabis business license to pursue. There are nearly 15,000 dispensaries nationwide and this figure is only expected to grow over the next coming years. For comparison there are nearly 45,000 liquor shops nationwide.
While retail cannabis licenses are the most common, it doesn’t mean they’re easy to secure or manage to profitability. In fact, only 27% of cannabis dispensaries report being profitable.
So, what can be done to address this and position your prospective dispensary for success? Looking at the United States Virgin Islands as a template (given their dispensary application licensing round is open now) we’ll highlight some of the most important and often overlooked aspects associated with operating a cannabis dispensary.
1) Securing Governmental Approval
This first point may seem obvious, but it is often overlooked that in order to secure approval for your dispensary, you may need various levels of governmental approval: state, territorial, and municipal. The state/territorial approval seems the easiest and, in many ways, can actually be. States have their own issues in licensing, but municipalities can be equally as confusing, if not even more so given the limited resources typically available for municipal governments.
Local Business Approval Can Be Complex
To ensure a smooth rollout for your retail cannabis business, we recommend not only staying on top of licensing requirements at a larger governmental level, but look locally too. With the U.S. Virgin Islands, individuals seeking a retail license will need to secure approval from the USVI Office of Cannabis Regulation (OCR) and prior to submission will need to have a location and property identified. Regulation aside, choosing the correct island for your cannabis business can have far-reaching consequences on future success.
Make sure that all is in order with your municipalities and that the location you have in mind meets all the necessary requirements for operations. This encompasses everything from landlord approval to fire code to proper zoning, the latter which can hold significant control of business potential in some locations. While less of an immediate issue for retail cannabis businesses, climate change is also something to take into consideration alongside local approval.
When in doubt, reach out to the state or territorial government, and stay in close communication to the town or city council too and any applicable boards or commissions like a planning board.
2) Conducting Cannabis Market Research
Prior to signing a lease or mortgage for a prospective location, it’s important conduct cannabis market research both locally and regionally. Not only do you want conduct adequate financial planning, you also want thorough assessments of the overall retail market and how it operates within the region as a whole. Some cannabis markets and the number of licenses which will be issued (along with potential municipal restrictions) become more valuable than others. Depending on the state or territory, even a more rural or less heavily trafficked location can be overall more lucrative than a dispensary in a highly urbanized, but over-saturated city.
Forecasting For Future Market Growth
For the Virgin Islands, immediate market research is difficult to assess. There is a current medical cannabis market, but the medical market registry is incredibly small, so is not the most accurate use of data to anticipate overall cannabis sales and profitability. However, we can anticipate optimistic sales figures given the USVI’s unique position as a potential cannabis tourist hotspot. The USVI very well could overtake more well-known cannabis island hotspots like Jamaica with the market value anticipated to be upwards of $66 million. For the (at most) 17 dispensaries issued business licenses across the three islands, this could be incredibly lucrative.
3) Hiring the Right People
Of all the aspects in which we see result in difficulties for cannabis dispensaries, the most glaring is hiring the wrong people. On applications, many people look to hire someone who will look good for licensure, but may not actually be helpful in the operations of the business. There is also the risk of hiring individuals to serve as dispensing technicians or “budtenders” and hiring people who may not be properly trained or knowledgeable about cannabis or retail operations. Worse, there are individuals on staff who could engage in diversion.
Mitigating Employee Turnover Risks
It’s critical to take your time in staffing a team for every and any position within your cannabis organization. Personnel takes up the bulk of day-to-day costs for a dispensary, but it’s important to find, hire, train, and retain skilled workers. Dispensing technicians have a high turnover rate, and an easy solution is to pay well. We always recommend not shortchanging staff or training along with having implemented through hiring. For the USVI, where full-time residents on some islands is low, identifying staff whom are trustworthy, knowledgeable, and can meet the often rigorous and complex requirements associated with working in a dispensary is critical to longevity.
Partner With Canna Advisors To Avoid Retail Pitfalls
We are just scratching the surface on everything that’s need to run and operate a successful dispensary. But if you’re interested in tackling these challenges and getting started, don’t hesitate to partner Canna Advisors for any assistance with your prospective cannabis business.
Our team of dispensary consultants has decades of experience helping retail cannabis hopefuls win licenses, develop their dispensary the right way, and build a solid foundation for successful growth.
Contact our team today or book an hourly consultation to get started.