Growing A Marijuana Business, Legally

It’s the impossible dream of many a college student.  But now, thanks to changes in different state laws and some federal policies, many have the opportunity to open and operate legitimate (mostly) marijuana enterprise. Why mostly? Well, despite changes, these dispensaries still exist in a legal gray area.

In California, marijuana distribution has become the next gold rush - there are close to 1,000 marijuana dispensaries registered in Los Angeles alone (check out a map of them here.). But these dispensaries are sprouting up in plenty of other places too. There are 15 dispensaries in Colorado and four in Oregon, medical marijuana is now legal in 13 states and it is on the docket to be legalized in 15 more. That would mean the majority of states in this country will tolerate it.

“We’re creating an entirely new industry with plenty of new job opportunities,” said George Boyadjian, President and Founder of the Cannabis Career Institute, which offers courses to those who want to enter the medical marijuana field.

Can you really earn an honest living from working in a marijuana dispensary? Yes, but you won’t necessarily be rolling in crazy money. Employees at dispensaries make as much as $20 dollars an hour, according to Boyadjian. If you own the place, your income will also be relatively limited because all the states that allow dispensaries mandate that they be run as non-profits.

Perhaps the most lucrative dispensary on the west coast is the Harborside shop in Oakland, which reported close to $15 million in sales in 2008. The owner of the store, Stephen DeAngelo, estimates that the average marijuana shops grosses $3-4 million each year. However, if you're an owner, much of that money is heavily taxed. In Oakland, owners pay 15 times the tax that other store owners do. But, according to Forbes, most owners actually asked to pay more taxes so they could appear as better citizens. 

Aspiring marijuana entrepreneurs must meet one very important condition before opening a dispensary: they have to be a patient.

If you want to distribute legally, you have to obtain it legally, which means your doctor must prescribe you medical marijuana. Doctors will “recommend” marijuana for anything from anxiety and insomnia to more life threatening conditions like cancer. Some doctors simply charge a nominal fee to write the prescription. Once your doctor gives the OK, he or she can also authorize you to grow your own pot legally.

At the moment, laws for distribution in states like California are determined on a local level. For example, authorities Sonoma County lets dispensaries grow and sell up to 99 plants at a time.

Ultimately, legal marijuana dispensaries function more as local communes than mass enterprises.

Once you’ve got all that nailed down, you need to follow these four steps:


1. Apply for a permit to open your business (the application costs around $20). You can find forms for your state here.

2. Try to find a location with sympathetic neighbors. Several counties in California have been complaining that dispensaries are too close to local schools.

3. Be sure to pick an original name to set yourself apart. The LA Times reports that most of these businesses use the same few key words like “collective” and “caregivers” in their names over and over.

4. Don’t  be a stoner with your finances. As with any other business, you’ll need to prove to banks or other businesses that you deserve a start-up loan, and you may even want to hire accountants to help manage your fledgling store.

The rest is just good business. “You’ve got to offer good customer service and a quality product,” Boyadjian said. “It’s no different than any other business. You take care of the patient, give them good medicine and continue to grow your company.”

Actually, despite  Boyadjian’s understandable enthusiasm, these businesses are actually different in very fundamental ways. For starters, few dispensary owners would speak to MainStreet for fear of “drawing attention” to themselves. In their case, all publicity is bad publicity. We haven’t had the same experience when we interview, say, cupcake store owners.

On top of that, it’s tough to lead a normal life when you’re worried you might be hauled off by the feds. For now, the Obama administration seems to have departed from the Bush administration’s policy of going after dispensaries.


The Drug Enforcement Agency chooses to remain ambiguous, but ultimately hands-off. “Our emphasis is on major drug trafficking organizations selling for financial gain, not medical gain,” said David Ausiello, spokesperson for the DEA. “Is it troubling that there’s more facilities? Well, that’s something states will have to deal with.”

But what if it’s Palin in 2012? Would that mean the end of an industry?

For the time being, however, if you follow the above steps closely, you can function as a legitimate enterprise. Keep in mind, however, that at the moment, there is a temporary moratorium on new applications in Los Angeles and several other major cities, but most experts expect this to be lifted in the near future. So why wait? Get your act together so you can be the first one out of the gate with a business plan. If you’re interested in learning more, consider attending instructional lectures at the Cannabis Institute or other small universities.

Finally, if you’re not entrepreneurial, but still want to work in the cannabis business, there are plenty of options. “Many collectives have marketing and accounting departments, where anyone can work,” Boyadjian said. “But if you’re handling it or selling it, then you need a doctors recommendation, just to touch it.

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