The Top 8 Factors to Consider When Opening A Cannabis Dispensary

Jun 16, 2021 | Cannabis Laws & News, Small Cannabis Business

With any business, they always say – “location, location, location”. This is true for opening a cannabis dispensary. But like most things in the cannabis industry, there are more factors to consider when learning how to choose the best location for your recreational retail store, like:

  • zoning,
  • compliance restrictions,
  • and the target market, you’ll be serving.

To help, we’ve put together the top 8 factors to consider when setting out to open your own cannabis dispensary.

Compliance & Regulation Factors to Consider

The first set of factors to consider when choosing a location for your cannabis dispensary is a requirement to receive official licensing. Almost every state, township, or local municipality has a set of guidelines that recreational store locations must adhere to. No matter how great of a spot you’ve found – if it violates any one of the following, your plan will be an immediate no-go. So, it’s best to begin narrowing down your potential locations first, before setting out to scope out specific buildings or storefronts. To do so, explore the following factors in your surrounding region:

1. Zoning

Every region and local municipality has its own zoning codes. Some areas are ‘zoned’ for industrial, while others are coded for commercial, residential, etc. In each city or town you’re scoping recreational store locations, check in with the zoning department codes first. This will narrow down the potential locations, you can search for buildings or land.

2. Restrictions

Next, you’ll have to consider specific restrictions set by your state or local jurisdiction. Most states have verbiage in their legislation that prohibits a cannabis dispensary from setting up shop near certain businesses, or entities. Like, schools, playgrounds, churches, and parks that are frequented by children.

3. Ordinances

Last, but not least, is checking the local ordinances in the areas you’re searching. Even though recreational retail sales of cannabis may be legal in your state, many local municipalities ‘opt-out’ completely. Or, set their own set of restrictions like limiting the number of licenses available, or dispensaries allowed. When reviewing each town or city, be sure to inquire about specific ordinances or restrictions for each.

Basic Retail Factors to Consider

Beyond making sure that your location meets the mark for regulatory guidelines, you’ll also want to ensure that the store you choose is equipped with the basics for cannabis retail. Unlike other retail spaces – cannabis has a few unique factors to consider. Like the fact that you’ll be serving a unique niche of consumers, primarily accepting cash, and should expect high amounts of traffic, no pun intended. Next, let’s review some key characteristics to keep in mind when deciding upon the right recreational store location for you.

4. Security

Cannabis dispensaries are subject to unique security guidelines. Most states require security systems at the very least, so ensuring your location is well-equipped to do so from the start, can avoid additional costs as you build-out. In addition, you’ll need a front entry checkpoint for checking IDs and a secure, safe space to store inventory. If the recreational store location doesn’t already have these features, review the space and your budget to ensure it’s feasible to add, yourself.

5. Parking

If your store or location isn’t well-suited for foot traffic, then parking should be a top consideration. The more parking you offer, the more customers you’re apt to serve. Plus, for many consumers – if any retail location lacks parking or requires parallel parking, they may seek out a different location to shop, better suited to park with ease. Keep security in mind for parking areas and lots too, like being well-lit and visible, as your customers will be likely walking in with cash, and definitely walking out with precious goods.

6. Accessibility & traffic

The more traffic = the more sales. So finding a hustling and bustling recreational store location is highly beneficial for your bottom line. Not to mention, being able to easily access your location can boost traffic too. For rural areas, that means finding a spot for your cannabis dispensary near highways can help. In cities or suburbs, it’s helpful to check traffic patterns throughout the day to ensure you’re getting a good flow, without any back-ups that would make potential consumers hesitant to visit.

7. Nearby demographics & competition

Let’s be honest, not every community or demographic is as 420-friendly as the rest. Even though sales do span across the generations, studies show Millennials and Gen Z are the majority buyers. These generations make up 38% of all recreational cannabis consumers over 21. So finding the ‘hot spots’ in your state or region that primarily house these specific age groups can help. It also helps to review the nearby retail shops and businesses that might align with your target market, and boost the attraction of making a trip to visit both. Speaking of other businesses, you’ll also want to gauge the competition in the potential recreational store location. If there are already multiple cannabis dispensaries in the area, you’ll have to work extra hard to win over the loyalty of local current customers.

8. Lease, building, or buying

Ultimately, you may be limited on your exact recreational store location based on your budget or individual preferences. One last factor to consider for scoping out locations is whether you’ll be leasing, buying, or building the space for your cannabis dispensary. If you’re planning on leasing the space, having a conversation with the landlord about the nature of your business is crucial. It’s always best to have a landlord on board rather than on the fence or against the idea, as that could create future rifts or problems down the line.

Location, location, location

As consumers continue to increase, and sales continue to rise, there’s no better time to open your own cannabis dispensary. Especially considering, in 2020 alone, retail cannabis sales increased by a whopping 67% nationwide. With this handy guide, you’re just one step closer to making your cannabis dispensary dreams come true. Use these tips to choose the best location for your recreational retail store, and join the thriving Cannabiz with fewer bumps in the road, than most.

About The Author

<a href="" target="_self">Courtney Trzos</a>

Courtney Trzos

To Courtney, it’s always 420 somewhere… After attending Michigan State University and working in communications for over 10 years, she took her passion for cannabis, professionally. In 2017, Courtney began freelancing as a writer for cannabis brands across the globe, promoting the therapeutic and recreational use of the plant, while helping her partner cultivate crops full-time, and learning more about the industry from a seed-to-sale perspective. Get in touch with her and follow her journey at