Creating and operating your own cannabis franchise can be an exciting way to get involved in the marijuana industry, but it can also be very difficult if you don’t have the right knowledge and advice.
What Are Cannabis Franchising Opportunities
With the recent legalization of recreational marijuana in many countries, there has been a surge in interest in cannabis franchising opportunities. Cannabis franchises offer investors the chance to get in on the ground floor of what is sure to be a booming industry.
In Canada alone, an estimated CAD$5 billion was spent annually on cannabis products and services by 2020, according to Deloitte’s study.
That makes for some big profits for those who are able to capitalize early enough. But how can you tell if investing in a franchise opportunity would be right for you?
One way is by looking at the company’s track record:
- Do they have a long history of success?
- Do they have the backing of experienced partners or staff?
- And most importantly: does their model seem sustainable?
These are all important considerations when it comes to investing your hard-earned money in any new business venture. Before deciding which cannabis franchise to invest in, make sure that the product or service offered will meet the needs of your customers. It’s also worth considering whether the population you live in is going to support this type of investment as well.
What About New Markets?
For example, markets such as New York and Ohio have yet to legalize recreational marijuana so it may not be feasible for a potential investor living in these areas. On the other hand, Las Vegas sees around 2 million tourists every year who come from places where cannabis use is legal so this could present a viable opportunity for someone looking to start up a Las Vegas-based dispensary.
Since starting up a traditional brick-and-mortar store isn’t always easy, investing in one of the first Canadian Lifestyle Brand cannabis dispensaries might be more desirable.
Is Being A Franchise Owner Right For You
If you’re considering opening a cannabis franchise, there are a few things you should know.
First, the cannabis industry is growing rapidly and is expected to continue to do so. This means that there is potential for large profits. However, it’s important to remember that the industry is still new and therefore risky. There are also strict regulations in place that can make it difficult to get started.
But if you’re up for the challenge and are willing to take on some risk, a cannabis franchise could be a great opportunity for you. With cannabis becoming legal in more and more places, an increasing number of people have been making money off of pot-related products.
It’s predicted that this trend will only continue as more states legalize marijuana for recreational use.
These changes create opportunities for entrepreneurs looking to start their own business in the burgeoning cannabis industry. One way to do this is by buying into a pre-existing franchise with strong branding and nationwide distribution. A franchised business model offers established systems, well-known brands, and national reach.
Furthermore, these companies are able to leverage their existing reputation with customers who may not even realize they’re purchasing a product related to weed!
But before jumping into any franchising deal you need to find out what it entails.
For example:
- Does the company require you to pay royalties?
- Do they offer a loan or line of credit?
- How much equity are you required to invest?
- Does the company offer training or staff support?
By asking these questions upfront, you’ll be better prepared when evaluating different franchises.
Once your questions have been answered, there are three major factors that should influence your decision:
- Location (or proximity)
- Legislation in your area
- Marketability
For example, California has legalized recreational cannabis use while North Dakota has not; Florida has many restrictions on where dispensaries can be located, while Washington doesn’t; Las Vegas makes sense as a destination spot but Denver would not. And finally, something like vape pens may be popular in one area but less so elsewhere. For people located in Canada, recreational cannabis is legal.
Why Choose A Franchise Over Starting Your Own Business
When you buy a franchise, you are buying into an established brand. This comes with many benefits, such as instant name recognition, which can be difficult and expensive to create on your own.
Franchises also come with proven business models, so you know what works and what doesn’t. And because franchises are part of a larger company, they often have more resources available, such as marketing and advertising support. Plus, most franchises offer training and support to help you get started.
What are Non-Cannabis Franchise Examples?
So if you’re looking for a turn-key business with less risk than starting your own from scratch, a franchise may be the right choice for you. With brands like:
- Cinnabon;
- Dunkin’ Donuts;
- Jamba Juice;
- McDonald’s;
- and Wendy’s;
all offering franchises today, it’s easier than ever to find one that suits your interests and goals.
Keep in mind, though, not every franchise is right for everyone. You’ll want to weigh factors like your level of experience or willingness to learn new skills; how much time you want to invest in your business; whether you need a home office or not; and how much money you have saved up before deciding which type of franchise is best for you.
Some people start franchising their existing businesses, while others choose this path as their first foray into entrepreneurship. Whichever way you go, we hope this blog post has given you some ideas about cannabis franchising! Remember, you don’t need to make a decision quickly.
There’s no harm in taking the time to think through all your options, including trying out a few different things and seeing what feels right for you.
How Much Can You Make In This Growing Industry
The answer is, it depends on a lot of factors. The first is whether or not you’re a licensed dispensary owner or an investor.
Licensed dispensary owners will be able to set their own prices for products and services, so their income will vary based on those prices. Investors who buy into a franchise may have more limited income potential, but they also won’t have to worry about the day-to-day running of the business.
Another factor that determines income potential is the type of cannabis product being sold. Some cannabis products such as concentrates or edibles carry a higher price tag than others such as flower (buds) or pre-rolled joints. These products can sell for hundreds of dollars per gram and sometimes thousands! So if you want to make serious money with your cannabis franchise, focus on these higher-priced items instead of bulk flower (which only sells for around $5 per gram).
With the cannabis industry expected to reach $57 billion by 2027, there’s no shortage of opportunities for those looking to get in on the action. Cannabis franchises offer everything from growing and harvesting to processing, distribution, retail sales, education, and marketing. They typically offer a one-stop shop for anyone interested in getting into the business of weed. The most successful weed franchises have networks that span across multiple U.S. states or internationally.
Final Thoughts
There are two types of cannabis entrepreneurs: those who own and operate marijuana dispensaries or sell cannabis products wholesale to other businesses and those who grow marijuana for their own purposes.
Both have their advantages and disadvantages, but both have one thing in common: they require a lot of capital investment up front.
The average cost to open a medical marijuana dispensary ranges from $200K to $500K per location depending on location, size, and equipment costs (according to Marijuana Business Daily).
So Is it Worth it?
This includes everything from rent or mortgage payments to employee payroll expenses and advertising costs. Once you’ve paid off your initial investment costs, however, operating costs are relatively low compared with other industries because there aren’t many employees involved (unless you’re hiring security personnel).
As a franchisee, you can avoid creating your own grow operation and choose to focus instead on operating your retail outlet franchise or other aspects of the business. This is an excellent solution if you aren’t interested in growing your own cannabis but want to protect the integrity of your product chain.
