How Many Square Feet Do You Need To Open Cannabis Dispensary

Posted by Patrick Vedder on

 

Medical cannabis for profit in California has grown into a large industry.

The production of medical products derived from cannabis is expensive and is heavily regulated by relevant government agencies.

The safety code is extremely meticulous and strict in the granting of both licenses for dispensaries and doctors, as well as for the producers, farmers and manufacturers of the plant and its derivatives.

 

                                         

How Many Sq Ft Do You Need To Open A Dispensary

There is not a set amount of square footage required to open a dispensary.

Like any other business it depends on your budget, your goals, etc.

Do you plan on having just one location, or do you envision multiple spots?

1000 sq ft is a good number to start with as a minimum for opening a dispensary.

Once you put in an employee, customers, a computer, display cases, etc., 1000 sq ft doesn't seem very big.

Most of the dispensaries I've been in probably average closer to 2000 sq ft, when you include the lobby, and all the space behind the counters, etc.

If you are not sure how many square feet you will need then consult with a professional who can help you with design, layout, etc.

After you open your doors and start building a customer base, you can't just add square footage or decide to move to a bigger location.

If you sign a 5 year lease or buy a building, it can become quite complicated to move locations.

Opening a dispensary can be expensive and time consuming.

 

How Many Employees Do I Need?

A dispensary has complex employment demands and there is not a set amount of employees that you need.

Obviously a 1000 sq ft dispensary open 9 to 5 is going to need less staff than a dispensary with 2500 sq ft that is open 9 to midnight.

Depending how busy your dispensary is you will need at least one budtender to help customers, and maybe more if you have a lot of customers.

One way to save a lot of $ is to manage and help run the dispensary yourself.

From ordering products, to accounting, to managing employees, to helping customers.

The minimum wage in California is $10.50 per hour. All California employees are entitled to a minimum wage.

It is important to be aware of the following ways in which potential employers could violate minimum wages:

- Wages under the minimum wage:

An hourly wage offered or paid under the minimum wage is a violation of the law.

This includes salaried payments that average less than one hourly minimum wage.

 

overtime pay

- Non-payment of overtime:

The minimum wage for overtime in California is 1.5 times the employee's regular hourly rate.

All work performed beyond 8 hours per day should be considered as overtime, even if the total number of hours worked per week does not exceed 40 hours.

This is a specific law for California overtime.

Although federal law does not require overtime hours to apply to work weeks of less than 40 hours, California law requires that overtime work be determined on a daily and not a weekly basis.

 

dispensary security guards

Hiring Security Guards

In addition to regular staff, a dispensary should maintain surveillance 24 hours a day, seven days a week by hiring security guards and implementing camera systems, and employing other security measures.

The average cost of 24 hours a day security, plus the cost of installing and monitoring security cameras will vary by city, quality of staff and cameras.

According to data online, an unarmed guard will cost between $15 and $20 per hour.

But an armed security guard will charge closer to $20 - $25 an hour, and a dispensary needs an armed guard.

A good armed guard can help reduce the chances your dispensary will be robbed.

Keep in mind that working odd hours or Holidays etc. can push these prices higher.

Be careful if you hire a private security guard (not from an agency), because insurance liabilities become an issue.

 

Install Surveillance Cameras

On average you can expect to pay about $200 per camera and $100 per installation, but of course prices vary by product, volume, and city.

So a 1000 sq ft dispensary might need say 5 cameras total.

 One at front door, one at back door, one in lobby, and two cameras in the retail section where $ is handled and customers are buying product.

In this instance you might pay $1500 to $2000 for total install.

Of course then you need to pay the monthly service fee to operate cameras, etc.

Lease or Buy Retail Space

If you are considering saving some money, maybe renting a place for your dispensary can be a good choice, and buy a building later on.

However, keep in mind that retail space, actually all commercial space in California is very expensive and finding a vacant building to open a dispensary can be hard.

Retail space in LA county can vary from $1.15 sq ft to $5 or more. - think Rodeo Drive.

While space in Denver can cost from $1 and up.

Many factors like length of lease (longer usually lowers price per SF), neighborhood, and quality of building.

In Los Angeles County retail space lease rates are through the roof and vacancy rates are low, making it hard for people to find a suitable spot to open a dispensary.

Buying a building to put your dispensary in is another issue entirely and can be very expensive and complicated.

Start on a website like Loopnet.com to find a commercial real estate agent.

 

save money

Tips To Save Money

There are many way to save money when you first start your dispensary in California, here are some tips you might find helpful:

  • Do Free Marketing

Dispensaries that are just starting up face the great challenge of making themselves known.

Marketing your new dispensary can be expensive.

However, it is possible to do some free marketing by using all the channels of communication that you have available at your fingertips.

Create a business profile in different social networks - FB, IG, etc., and keep it updated.

Another excellent option is to set up a simple website with enough information to provide an overview of customer service.

Try to extend your social networks and build a solid networking, mentioning your business whenever you have the opportunity.

  • Hire minimum personnel

When starting a dispensary, you should keep in mind to avoid spending a lot of money on staff. Make sure to only hire the necessary personnel.

You can work in your own dispensary, this method is preferred by entrepreneurs who are just starting because it allows, among other things, to save the fixed costs of setting up an expensive staff.

  • Save money on infrastructure

Setting up a dispensary requires a huge initial investment.

Seek a minimalistic approach for your dispensary at first, there is no need to overspend in the “looks” on your business when you could use that money to buy more merchandise and increase your profits.

How Much Inventory Do You Need

The amount of marijuana that your dispensary needs and are allowed to have are two different things.

Each state will have their own laws, and each dispensary will have their own needs based on size of operation and estimated monthly customers.

Typically assume you should have a 1/2 lb at least of each variety that you choose to stock.

And of course your cost will vary, but saying at least $3500 per pound wholesale is a safe number.

So as you can see, your inventory can be many pounds if you have many types of weed for sale.

On a side note, in California, qualified patients and their primary caregivers can legally own up to eight ounces of dry marijuana and/or six mature (or 12 immature) marijuana plants.


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