File this in the “it could be worse” file. While the rules and regulations of medical marijuana facilities in Oregon are far from perfect, at least it doesn’t cost millions of dollars to get established. Medical marijuana dispensaries are not even allowed in all medical marijuana states. For those states that do allow medical marijuana dispensaries, the start up costs vary. Licensing fees are different in every state, as well as other expenses.
There is a trend in the medical marijuana industry – the newer the program, the more expensive the start up costs. When dispensaries popped up on the West Coast during the 2000-s, there were next to no regulations, and no licensing fees. Compare that to states like New Jersey and Massachusetts, which have heavy regulations and a limited number of dispensaries allowed.
Many people think that opening a medical marijuana dispensary is cheap and easy. However, that’s not the case, no matter which state you are operating in. There are a lot of expenses involved with a medical marijuana dispensary, such as staff related costs, building costs, equipment, heating bills, electricity bills, marketing, etc. And that doesn’t even include the medicine itself. It’s not as easy as renting a cheap space and putting a jar full of meds on the shelf.
In the case of one medical marijuana dispensary in Massachusetts, start up costs are in the millions. The New England Treatment Access is one of 20 medical marijuana dispensaries that received a license by the Massachusetts Department of Public Health earlier this year. Per MassLive.Com:
NETA is receiving a $9 million loan from Howard Kessler of Boston. Of that, $3.8 million will go to capital costs at NETA’s three locations, with $500,000 allocated at the Northampton site. The remaining $5.2 million will go to operating costs until NETA breaks even.
In its first year of operation, NETA hopes to net more than $700,000, assuming 1.6 ounces per patient per month and a price of $4,800 per pound. Projected revenue is $9.8 million for 2015, reaching $19 million by 2017, NETA states in its DPH filings. The dispensary hopes to reach a peak patient level of 3,200 in 2016.
This of course is the high end of medical marijuana businesses. One of the people on the payroll of New England Treatment Access is retired Democratic Congressman Barney Frank, who serves as New England Treatment Access’s Director of Government and Community Relations. Before starting a medical marijuana business, research the start up costs extensively, otherwise you run the risk of getting over extended financially. Make sure to calculate for unforeseen circumstances, which in the marijuana industry, are almost virtually guaranteed to happen.