Marijuana Stores: High Profits – High Costs

marijuana stores

Marijuana stores are getting more and more popular. said cannabis shops are facilities where people can buy marijuana either for recreational and medicinal use. These commercial places are profitable but opening and operating them can be truly expensive.

The entire cannabis industry grew up massively and seems nothing can stop it from soaring up. That’s no longer impossible since cannabis is now widely available in most parts of the world. Dispensaries now exist in Canada, the United States, the UK, and other European countries.

This beautiful “green rush” forms various kinds of business opportunities offered to those business-minded people who are willing to enter this continuously growing niche. Opportunities that come from growing and selling cannabis are never limited to:

  • Cannabis producers
  • Cannabis retailers
  • Processors
  • Registered distributors
  • Concentrate producers
  • Edibles makers
  • Delivery service providers
  • Packaging producers
  • Security service providers
  • Laboratory analysis specialists
  • App developers
  • Technology companies
  • Marketing offices
  • Industry-specific consulting offices

Do Marijuana Shops Make Money?

The recent marijuana industry looks unique because each state and even each city comes with various regulations that affect their profitability. State-specific regulations are the leading indicators of the potential profitability of cannabis shops.

There has been a strong demand for cannabis for a long time. If there’s a demand, then marijuana shops will surely earn not just thousands but even millions.

How Lucrative is the Cannabis Market?

In spite of the regulations and challenges, almost 90 percent of the existing cannabis dispensaries, edibles makers, and wholesale cultivators say they are lucrative. In 2016, Americans spent around 6.7 billion US dollars on cannabis and almost 9 billion dollars in 2017.

1 out of 5 Americans use some type of cannabis and this number may grow in the next few years. Over a quarter of marijuana stores generate yearly revenues of more than 1 million US dollars.

Another 15% report yearly revenues ranging between $500,000 and $1 million. Well-established cannabis dispensaries usually have thousands to tens of thousands of regular customers, tested cannabis products, more knowledgeable employees, and professional packaging for all products. These companies report yearly sales that reach up to 10 million dollars while those cannabis shops situated in remote places generated up to 3 million dollars.

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Likewise, some of the recent dispensary owners report earning $500,000 or less in yearly revenues. Those store owners from the low-end class generate between $100,000 to $250,000 from the sales.

How Much Does It Cost to Start Marijuana Stores?

In the eyes of the general public, marijuana business owners are millionaires. While many people shared stories of success as marijuana store owners, the cost of starting up a cannabis shop makes the financial truth of starting a dispensary difficult for many budding entrepreneurs. If you’re planning to open a marijuana dispensary, you should have $250,000 up to $750,000 to ensure the success of your plan.

On the other hand, the increasing demand for marijuana allows for better opportunities, even within the most saturated cannabis markets. Cannabis retailers who wish to compete with big-box shops must work smart, concentrate on making a good store management experience, and invest in marijuana technologies that streamline the operations to lessen the costs.

How to Open Marijuana Stores

In opening a cannabis store, one should undergo these steps:

Step One: Licensing

Obtaining a business license is the 1st step in running a marijuana dispensary. The licensing procedure may vary from one location to another. It is also costly and extensive.

Since you want to operate a cannabis store, expect that you will be required to undergo background checks and spend as much as $5,000 for the licensing fees. In some places such as Washington, the number of business licenses the state government is capped. The associated costs can reach up to $25,000, excluding the legal fees.

Step Two: Prepare the Capital Requirements

Aside from the licensing and potential legal fees, capital requirements are another thing that discourages many people from entering this industry. Before the licensing process, some states will ask you for a proof of financial stability, something that will prove your ability and willingness to take the real cost of starting up a marijuana dispensary.

Starting up a cannabis shop is a nice financial dream, but it’s not ideal for everybody. The exact capital cost makes people hesitate to pursue.

Depending on the location where you decided to apply for the business license, the local government will ask for proof that you have other assets or other financial sources to keep your operations smooth and afloat especially in times of difficulties.

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Step Three: Choosing a Location

Finding a perfect location for starting up a cannabis shop is easy but can be costly. The state and city regulations define how a cannabis dispensary can come close to schools, churches, arcades, parks, and any other public places where kids may likely go.

Locating a permissible spot for your cannabis dispensary with foot traffic and a wide parking lot can cost as much as $100,000 every year. In keeping your potential customers loyal to your brand, you should invest a little more for making your store friendlier, modern, and welcoming. The better their first experience in visiting your cannabis shop, the more likely they will come back the next time they need to buy cannabis.

Step Four: Banking Cost

Banks working with cannabis businesses take on the risk. This risk can be the national enforcement priorities may change and target those banks that deal with cannabis shops. This is why many banks still refuse to do business with cannabis stores and take the risk. Those banks that took the challenged charge the cannabis store owners with as much as $2,000 holding fees each month.

Step Five: Everyday Costs and Smart Investments

One cannot operate a cannabis dispensary without the products, staff, and customers. In those states that permit vertical integration, growing your own weed can cost more than 500 dollars. This amount does not include the inventory charges for topicals, edibles, and other types of cannabis products.

To persuade the consumers to buy, a cannabis store owner needs to invest $10,000 up to $25,000 on the marketing needs of his business. The salary costs for the store manager, budtenders, and master grower can reach up to $250,000 every year. Finally, one should consider the expensive insurance policies, taxes, license renewal charges, trademark protections, and legal retainers.

Those everyday costs of operating a marijuana stores rack up quickly. A smart marijuana store owner will save money and time if he invests in technology as soon as possible. Technology will optimize his daily operations, so investing in such a thing is really worth every penny.

You can invest at least $25,000 on software and hardware, including computers, an integrated POS system, and a full security system for the entire commercial facility. The cost of such technologies can be huge at first. However, it will save your business in the long run.

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There are many people who have shared their experience in opening a new cannabis shop and how they succeed in the end. It is expensive and challenging. However, for an informed and smart business owner, the upside can be enormous.

If you’re serious in operating a cannabis dispensary someday, then you should get started in preparing yourself first from now on. Education is the ultimate key to achieve success in starting up a cannabis dispensary.

The Future of Cannabis Stores

A retail store that sells a range of cannabis products can take up a certain size of land. The facility may cost between $3500 up to $5000 for every square meter of land. Profit margins range anywhere from 30 percent to 45 percent.

In some areas such as the state of California in the United States, the sales of medical marijuana may likely reach 23 billion US dollars in the next 11 years. Many medical marijuana suppliers in California are reportedly either fully profitable or breaking even. These businesses are thriving in the financial aspect in either way.

On the other hand, concentrates, edibles, and cannabis seeds or strains seem to be the greatest money-spinners. The cultivated cannabis products often see profitability in the very first yield.

Furthermore, recent research also shows that around 91 percent of the companies that produce weed-infused products can reach break-even status in just one year. Surprisingly, these companies often have cheaper startup costs compared to the expensive capital requisites of cannabis cultivators or retailers.

It makes generating profit easier for those companies specializing in edibles production. In fact, it even shows that the industry of medical marijuana is set to skyrocket from here in the next few years. People who get the foothold within the industry in the early stages will also get the chance to win big-time.


If you’re planning to start up marijuana stores, you must be emotionally, mentally, and financially ready. Get yourself ready for this wonderful venture by getting yourself more familiar with the market, how it works, and how you can attain your own success once you dive in.

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