As of November 2020, 35 states had legalized cannabis for medical use. A wave of cannabis reform is sweeping across the country, thanks in part to cannabis’ revenue earning ability as well as its numerous health benefits. Consequently, the medical cannabis space attracts a lot of players, with everyone from mom and pop establishments to regional or even national chains looking to cash in.
Given that different states and even municipalities within the states have varying cannabis legislation, anyone looking to open a medical marijuana retail business ought to consider a few things before making a choice on locations.
Think both local and regional. While acquainting yourself with the area you want to open your operation is crucial, don’t keep your thinking local, advises Michael Lord, CEO at LivWell Enlightened Health, a Colorado-based cannabis firm that operates 22 dispensaries in the state. Don’t just rely on Google Maps or an actual map, he says.
Stephanie Goodman, CEO of Bricks and Mortar, a cannabis real estate brokerage firm in Boston, adds that on top of knowing your local market, make sure you do regional research. This way, she says, you can scout locations that may have medical cannabis markets in the near future, allowing you to better forecast future medical marijuana sales.
Start small, at least for smaller businesses without the capital large corporations have at their disposal. Founder and CEO of Elev8 Cannabis Seun Adedeji says such businesses may have a better chance of starting out in smaller towns. He started with just one dispensary in Oregon and expanded to border towns close to New York, New Hampshire and Vermont where real estate is cheaper compared to larger cities. Since each of those small towns gives only two licenses for recreational cannabis, your value will increase, he says.
This works in cities as well, says Farrell Miller, chief compliance officer at Erbn Green Cannabis Co. The Canadian retailer opened its initial operation in the uptown area of Toronto, and according to Miller, this has allowed Erbn Green to serve underserved locations in suburbs that don’t allow cannabis stores.
Will you buy or lease? After his first landlord refused to renew his lease, Adedeji has been turned off of leasing real estate. If you absolutely have to lease, he recommends a 10-year lease with an option for an additional 10 years. Due to cannabis’ illicit status at the federal level, property owners are usually afraid of turning off their mortgage lenders by leasing to cannabis owners.
Companies that have the capital can execute a leaseback deal where they acquire a property and sell it to partners, who then lease it back to them, says Goodman. This allows you access to real estate, a more amenable landlord, and free capital to run and expand your business.
After finding your ideal location, you will need top-rate products to sell, and plenty of companies are positioned to address those pressing inventory needs. For example, RYAH Group Inc. is putting the finishing touches to a smart pen that can dispense liquid medicines, including medical cannabis products.
NOTE TO INVESTORS: The latest news and updates relating to RYAH Group Inc. are available in the company’s newsroom at https://cnw.fm/RYAH
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