By Virginia Maggiore of RDC
Although the roadmap to opening a dispensary presents unique challenges inherent to the cannabis industry, the process shares many parallels with traditional retail projects. From selecting the optimal site, designing the brand and interior and implementing the build-out plan, the similarities are evident. However, a pivotal differentiator lies in the need to assemble a team that has experience with cannabis laws, sites, operations and build-outs.
The collective expertise comprised by seasoned architects, designers and general contractors is instrumental in navigating the complexities of the cannabis industry, avoiding unnecessary expenses and delays, while ensuring a successful store opening.
Selecting the Optimal Site
The first step in the process to opening a dispensary involves choosing the optimal property for the storefront. While some entrepreneurs opt for ground-up construction, the majority leverage existing vacant spaces, repurposing them into cannabis dispensaries.
Operators that are refurbishing an existing property for retail will want to select a site that boasts a vanilla shell or blank canvas for the new store to build upon. Choosing properties that already contain many of the costly elements like utilities and bathrooms can greatly minimize construction expenses. This allows operators to save their budget for a more substantial investment in design or brand identity — elements that can elevate the overall customer experience.
Like any retail project, operators should pay close attention to the condition of the property and evaluate its ability to accommodate essential elements, such as security, lighting and parking. Seeking properties already zoned and primed for retail operations can help streamline the process. This can avoid the costs and delays associated with attempting to get the land rezoned.
Zoning restrictions exist for all construction projects, but they can be much more challenging to navigate in the cannabis industry. It’s worth noting that not every area will approve the rezoning of properties for cannabis business use. This makes it imperative to confirm that the location can be rezoned prior to selecting a property.
Designing Your Brand and Interior
Perhaps the most crucial step in the roadmap to opening a dispensary is designing the brand and interior of the store. Beginning the design process early — even while undergoing licensure — provides a crucial head start in defining the brand identity and setting the dispensary apart from competition, two key factors for a successful brand rollout.
The customer experience is a central component of success for both traditional retailers and dispensaries. As such, it can be largely defined by the brand’s design. Cohesive elements should welcome customers into an inviting space the moment they step through the door. The space should be complete with curated fixtures, finishes, lighting and other interior elements. The layout of the store should also guide customers from product selection to checkout, providing multiple opportunities for customer education and engagement.
The operational flow of the store’s back of house is equally important in establishing a positive customer experience. As previously mentioned, the complex compliance and operational requirements of the cannabis industry pose unique challenges. Regulatory guidelines will dictate modern dispensary elements like vaults, in-store pick-up, delivery areas and more. This makes compliance and operational efficiency of the layout crucial.
Operators who don’t prioritize compliance to local ordinances and regulatory guidelines during the design and build-out process will have to work backwards down the road. This is a waste of time and money. You want to make it a priority to ensure any retail cannabis operation is designed correctly the first time to position the store for a smooth and successful launch.
Implementing the Build-Out Plan
The site has been chosen. The store has been designed. Now it’s time to implement the build-out plan. While the construction process for cannabis retail can be similar to other retail projects, dispensaries often have additional inspections to ensure compliance with local and state regulations.
Like any construction project, operators will need to pull building permits early and understand lead times for essential equipment like HVAC systems and refrigeration units. Once again, this is where proactivity pays off. By taking care of permitting and ordering early, operators can mitigate potential design setbacks, inspection violations or costly delays in the store opening.
A critical yet often overlooked step is validating that any work the landlord has agreed to do to the property was actually completed prior to the dispensary taking possession of the property. Incomplete work could cause the operator to fail inspections or delay the opening, as operators have the option to postpone taking possession until the landlord fulfills the agreed-upon scope of work. An experienced team will know to verify completion of all work in preparation of inspections to ensure the business passes and does not face any delays or fines.
While the roadmap to opening a dispensary can look similar to that of a traditional retailer, it also requires meticulous planning and attention to compliance standards. Having a cannabis-experienced team by your side can help operators navigate site selection, design their store, implement their build-out plan and launch their brand. All of this lays the foundation for a thriving and compliant cannabis retail dispensary.
— By Virginia Maggiore, principal of RDC in Long Beach, Calif. This article originally appeared in the April 2024 issue of Western Real Estate Business.