This ultimate guide to writing a cannabis business plan is all you need. It has detailed step-by-step procedures, a cannabis business plan sample, and tools to act as a point of reference. Read now and get started.
Download Template
Cannabis is a multi-billion dollar industry promising exceptional growth rates and profit margins.
However, establishing a solid foothold in the cannabis industry is no easy task. Firstly, the legal compliances and secondly the costs of setting up a business- you will have a lot to figure out when starting your cannabis business.
A well-planned strategic business plan removes the how, when, where, and what from the equation and gives you a concrete answer to business growth and succession.
You need to create this custom bible for your business before you undertake its responsibility.
Let’s uncover the step-by-step procedure to write a cannabis dispensary business plan in detail.
Let’s get started.
If you are wondering why a business plan is just another trend that holds no concrete value, reconsider. It is more important than ever and here’s why:
I guess you now have plenty of reasons convincing enough to have a business plan. So let’s move forward.
A lot goes into writing a comprehensive business plan- from company analysis to customer analysis, marketing strategies, funding strategies, and much more. Here is your step-by-step guide to writing an effective plan for the cannabis business.
What type of cannabis business are you planning to start? Get an answer to this before you start working on your cannabis business plan.
Now, dispensary is not the only way to get into the cannabis market. Here are a few prevalent cannabis business models:
The business plan for each of these models will be different. Explore a business plan example here and find the one relevant to your business model.
After identifying the cannabis business you want to start, determine an ideal customer for your business.
Incorporate different market analysis methods to create a buyer persona for your products. Consider factors like age, gender, location, spending patterns, values, needs, and expectations of your target audience in this process.
The study of the target market will help you identify the ideal customer who will be willing to pay for your products.
An executive summary offers a concise summary of your cannabis dispensary business plan. It is recommended to write this section at last after you are done writing for other aspects.
Potential investors gauge the viability of your business model after reading your executive summary. If it’s intriguing enough, they will move forward and use it as a reference point.
Consider adding all the important information in this section using a storytelling approach.
This includes business details like its name and location, contact information, market overview, products and services, team members, operations, goals, objectives, and everything that makes your company unique.
An ideal executive summary must offer a snapshot of your business plan. It should attract investors with a hook and persuade them to read further.
Say goodbye to boring templates
Build your business plan faster and easier with AI
Plans starting from $7/month
This section offers a brief description of your company and an insight into its important details.
Remember, the different types of business models we discussed earlier? It’s now time to highlight the type of cannabis company you are planning to open.
Mention if it is a startup or an already established company. Also, specify the legal structure of your business, i.e. sole proprietorship, S Corp, LLC, partnership firm.
Include other details such as:
It’s okay to brag a little but offer your readers a realistic picture of your company.
Read More: Write Your Company Overview SectionThe industry analysis section offers a brief overview of the cannabis industry. Although it may seem unnecessary, this market research will play an extremely important role in determining your business strategies.
The market analysis will enhance your knowledge of the cannabis market and make you aware of the emerging trends that are worth considering. Not only that, it will establish your expertise as a professional amongst readers.
Now, what should an industry analysis section include?
While writing this section narrow down the focus from the broad to the specific marijuana market you would be covering. This will help establish the logical flow of information.
The US marijuana market is projected to reach 71 billion dollars by 2030, of which legal sales in Arizona alone are projected to reach $1740.2 million. This shows a favorable growth opportunity for cannabis dispensaries in Arizona.
The Cannabis industry has a competitive market landscape in the US especially since it was legalized. The question is do you stand a competitive edge in this market?
In this section of a business plan, focus on evaluating your competitors and identifying your key strengths through competitive analysis.
To begin with, identify your direct and indirect competitors. Direct competitors are other cannabis businesses offering the same products and services as you, i.e. cannabis dispensaries in your location.
Indirect competitors are businesses that offer replacement products for marijuana.
Study industry reports and publications and use methods like SWOT analysis, competitor profiling, etc. to analyze your competitors. The market research will help you identify their product offerings, strengths, weaknesses, pricing, and distribution channels.
Now, identify your competitive advantage over these cannabis businesses and outline them strategically. Highlight the details like prices, products, or services that make you stand apart.
Read More: How to Perform Effective a Competitive AnalysisIn this section of a cannabis dispensary business plan, you offer a line down of all the products and services offered by you.
A variety of marijuana products can be found in a dispensary. From flower buds to edibles, oils, pre-rolls, vaporizers, and cartridges- determine what you will sell or intend to sell as the business scales.
Mention if you would be offering any luxury or branded options in medical and recreational cannabis. And also highlights additional services like consultation, delivery, white labeling, etc. that are relevant to your business.
All the analysis and market research in the previous stages will now come together to form a plan of action. This action plan will bring you sales and make your dispensary profitable eventually.
Firstly, detail your sales strategy and highlight different methods that will help you achieve your sales plan.
For instance, a medical dispensary can partner with medical professionals to sell their high-THC cannabis products.
Now, line down your marketing plan that will help you achieve desired sales and popularity in the market.
Cannabis marketing is tricky and you need a proper understanding of the product, price, and place to market your products.
Here are a few things to consider while strategizing your marketing plan:
Find a correlation between each of these factors and form varying marketing strategies.
In this section of your business plan, outline the organizational structure of your business and introduce the founding members of your dispensary. Also, introduce your key management team and important personnel.
Outline their relevant experiences and skill sets and show how they are an asset to your business.
The operations plan streamlines the backend processes and details the everyday operations of running a dispensary.
In this section, mention standard operating procedures (SOPs) that will contribute towards the smooth functioning of a business. There must be a clear SOP for inventory management, ordering, delivery methods, employee training, vendors and suppliers, etc.
Mention all the technologies you will use at a dispensary. For instance, a seed-to-sale compliant POS system.
Detail all the security measures for a dispensary. Clarify how you will store cash and what tools you will have to combat situations like robbery, emergency, etc.
All in all, think of every small detail and lay down a clear guideline for different business activities.
This section of a cannabis dispensary business plan offers a brief financial summary of your business. Prepare this part with utmost scrutiny, especially if the purpose of a business plan is to acquire funds.
Let’s have a glance at everything your financial plan should include.
Now, it gets relatively difficult to create a robust financial plan from scratch without any aid. Upmetrics financial forecasting tool comes to your rescue by helping you generate accurate estimates and reports in minutes. Simply add your assumptions to the tab and it shall do the rest.
That’s pretty much everything a cannabis business plan must have.
To create automatic financials for your own business plan, we recommend Upmetrics. Create your own business plan.
Let’s have a look at the latest market trends and statistics ruling the cannabis industry in 2023:
Impressive, right? Now consider these stats while forming your market research.
Need help writing the content for your cannabis business plan? Look no further. We have a perfect resource for you.
Our cannabis business plan sample pdf offers step-by-step instructions with relevant examples and tutorials. It’s an intuitive template with perfect reference points and is available for free download.
The Quickest Way to turn a Business Idea into a Business Plan
Fill-in-the-blanks and automatic financials make it easy.
Let’s optimize your business planning with Upmetrics. With an extensive collection of 400+ sample templates, Upmetrics offers AI assistance and a step-by-step guide to help you write a well-structured business plan.
Upmetrics resources are perfect whether you are expanding your current cannabis business or setting up a new dispensary.
So what are you waiting for? Turn your cannabis business idea into a reality now.
Small Farming Business Plan
Organic Farm Business Plan
400+ Sample Business Plan Example
Business Plan Writing Process Guide
Cannabis Cultivation Business Plan
Dispensary Business Plan
The best state to start your cannabis business is Oregon. The legal environment in this state is relaxed and the competition is less intense. The cost of licensing is negligent and the guidelines surrounding cannabis businesses are less severe. Overall, you can start a dispensary at low costs in Oregon.
A cannabis business plan must include a proper plan for marketing, operations, sales, and organizational structure. Apart from that, a financial plan is of utmost importance when you start a cannabis business. Include, an executive summary and company analysis to make your business plan a concrete one.
Yes, adding testimonials can help establish credibility and trust for your business. The case studies will demonstrate your success in the market and win the trust of potential investors. Gather effective testimonials and case studies from your business history if possible.
Here are a few mistakes to avoid when writing your cannabis business plan:
A marijuana business plan should be updated every year accounting for the changes in business environment and projections. Also, make changes to your plan as and when new policies roll out in your concerned states.
About the Author
Vinay Kevadiya is the founder and CEO of Upmetrics, the #1 business planning software. His ultimate goal with Upmetrics is to revolutionize how entrepreneurs create, manage, and execute their business plans. He enjoys sharing his insights on business planning and other relevant topics through his articles and blog posts. Read more
Turn your business idea into a solid business plan
