How To Open A Dispensary In New York? (Ultimate Guide 2024)

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Are you trying to figure out how to start a dispensary in New York? This article will give all the latest information regarding the opening of a dispensary in New York.

Start With Planning Your New York Cannabis Business

For cannabis business owners, organizing your financial affairs should be the first step. In order to obtain a license, you must first establish your official company entity, research your state’s cannabis legislation, draft a business plan, choose a location, and get ready to submit an application.

Form a business entity

Your initial step should be to form a business entity. Make sure everything is correct by working with a lawyer, choose whether to form a corporation or an LLC and file with the state of New York.

Next, you can choose your business’s insurance needs, such as property insurance, workers’ compensation insurance, general liability insurance, and product liability insurance, and obtain tax ID numbers for the company. You can also register a business bank account at a bank or credit union that supports cannabis.

Write a business plan

Compared to other economic sectors, the cannabis industry is more complex and involves more legal and compliance issues. In this case, a strong company plan might be beneficial.

Although it might be tempting to skip this step, your application must be sent together with your dispensary business plan to the Office of Cannabis Management (often known as “the Office”), the regulating agency for New York.

A strong business plan should contain:

• The exact location of your cannabis shop
• Financing strategy, or the source of your initial and ongoing funding
• Sourcing strategy for your cannabis products
• The amount of workers you want to hire, the positions they will fill, and the organizational structure of your dispensary
• Plans for diversity and equity
• Plan for marketing
• Plan for safety and security
• Technology strategy, outlining the cannabis point of sale and compliance software you’ll employ to run your shop
• Anything further relevant that you would like to record

Find a location

Your dispensary location is an important aspect in opening the dispensary. To accomplish your ideal workflow, you’ll need something that is easily visible, has plenty of parking, and has enough space.

The location must be in a municipality that permits cannabis-related enterprises. The majority of New York’s 1,520 municipalities chose not to allow dispensaries, and 877 chose not to allow on-site consumption.

The reason why we are discussing real estate is because you will need to provide a lease or agreement for your location at the time of the application.

Your dispensary must:

• Have street level accessibility
• Be situated near a public route that is appropriate for business activities.
• Avoid sharing a road for 500 feet or less with community facilities or school grounds.
• Stay away from streets or avenues that are 200 feet or less from a place of worship

When choosing a location for your dispensary, pay attention to areas that:

• Comply with your business strategy.
• Are big enough to satisfy your needs.
• Are situated to handle foot traffic in a suitable manner.
• Make enough space for parking
• Possess potential for growth and expansion
• Fit into your budget

Document your dispensary plans

A dispensary site plan and operating plan are a special and necessary stage for dispensaries in New York. This clearly outlines your processes, going beyond your business plan and geographical information.

• Your dispensary site plan should include:
• Where your physical store is situated
• Activities that take place in the various sections of the pharmacy
• Explicit information about the property’s limits, such as physical borders, roads, and river crossings
• The overall size and measurement of each area
• Where individuals enter and depart the building and its grounds, including the emergency exits
• Evidence that your dispensary complies with local regulations

Secure funding

Now that you have a plan for your new recreational marijuana store, you can start making a more clear budget and plan.

Generally speaking, a cannabis business should budget for the following expenses:

Real estate and build-out: Take into account your upfront expenses as well as continuous mortgage or rent payments.

Licensing/application fees – You have to pay the cost of obtaining a license to operate a dispensary in New York. It’s also important to budget for your renewal costs, which average $8,000 for merchants every two years, which includes application + license fees.

Operational costs – Your regular operational costs for the business, such as marketing, business or professional fees, utilities, etc.

Hardware, software, security, and other tech – Many of these involve yearly or monthly subscription fees, but there may also be significant upfront charges.

Staffing costs – The cost of recruiting staff members, including wages, perks, taxes, etc.

Inventory costs – The actual price of sourcing and purchasing your cannabis products. You must fill your shelves with sufficient products for opening day and beyond.

Taxes – Prepare ahead of time for your quarterly tax payments because cannabis businesses are subject to high taxes and are not eligible for standard company write-offs like 280E.

How Much Does It Cost In New York To Start A Dispensary?

What is the required amount to open a dispensary? The expenses and initial capital needed for operating a dispensary are listed below.

The cost of a dispensary license varies based on the license you requested. In New York, a conditional adult-use retail license costs $2,000. Meanwhile, the cost of a general dispensary license is $1000 for the application, $7000 for the license, and $3000 for a facility with limited retail consumption.

Real Estate & Renovation

You can operate your cannabis business by purchasing or renting cannabis real estate. You should thoroughly investigate potential locations for your dispensary business because New York is a big state with a wide range of real estate and rental values. The prices for real estate for cannabis dispensaries in New York are as follows:

• Purchases of real estate can differ greatly. For example, It could range from $128 to $393 per square foot.
• However, monthly expenses for a marijuana store might be as much as $10,000 or even higher if you are forced to lease the property.

In order to adhere to rules, maximize store flow, and reflect your brand, you must also account for the building and renovation of the property. According to Grow America Builders, renovating smaller dispensaries costs between $350,000 and $500,000, renovating mid-sized dispensaries costs between $500,000 and $750,000, and renovating large dispensaries costs beyond $750,000. Moreover, an existing building’s renovation can cost between $350,000 to $1,000,000.

How to Apply for a New York Recreational Dispensary License

• To get a license, you will need a detailed business strategy, an application, a lease or agreement for a location, plans for packaging, labeling, transportation and security. In New York, a dispensary licensing application requires a lot of paperwork.
• If you intend to run a small business, you might be able to obtain a microbusiness license, which places restrictions on how much cannabis a company can possess or cultivate.
• If you are one of those that have been negatively impacted by the failed war on drugs, you might be qualified for New York’s social equity program.

Conclusion

Opening a Marijuana dispensary in New York is a complicated process but with the help of this article, you can make the process a bit easier.

The cannabis industry is growing at a faster pace and it is the right opportunity to invest in this market to maximize your profits. If you are thinking of opening a dispensary in New York then you shouldn’t wait any longer before the market becomes too competitive.