Don't bother with copy and paste.

Get this complete sample business plan as a free text document.

Download for free

Tobacco & Cannabis Manufacturing icon Cannabis Dispensary Business Plan

Start your plan

Crafted Cannabis

Executive Summary



Starting a cannabis store is all the rage. However, there are a lot of expectations and stereotypes that come with walking into a shop. People think they are going to see lava lamps and psychedelic music and staff that is stoned behind the counter. 

Also people are uncomfortable with giving their driver’s license and address before entering the shop. It is necessary by law but some potential customers are worried that means they will be on some government "bad" list. 

In short, customers want the products but can get shy about purchasing the goods. 


Our signage and messaging will emphasize medical marijuana and helpful effects of marijuana in an atmosphere of professionalism, appealing to people who don’t want doobie drawings. The lounge is set up like a comfortable doctor’s office and the experience of giving their information is like giving over health insurance info.

We are well supplied with products, we have all the best products at all the best prices. Further, our store is welcoming and puts the customer at their ease. We show the new customers around to get them comfortable with the store. The returning customers are left to shop at their leisure and ask questions if they want. 


Last year, the legal cannabis industry in the United States grossed $5.8 billion (medical and recreational channels combined.) Oregon dispensaries sold $393 million in legal cannabis in 2016 ($292 million adult-use.)

It was a big year for cannabis in Oregon. Not only was it the first full year of adult-use cannabis sales, Early Start gave sales a big boost in the summer, and testing challenges resulted in a market slowdown Oct-Dec 2016.


We have a lot of competition. In Eugene OR there are 28 recreational marijuana shops, five medical marijuana dispensaries, and two shops selling recreational and medical marijuana. They are all situated downtown where the city has said that it is legal to have the shop. They have a similar look and a similar staff. They also have a unreliable source of cannabis products. 

Why Us?

We will break the stereotype of what a dispensary should be and look like. Our staff is well trained to help the customers pick the marijuana products that will work best for them. We will have the most popular strains for those customers who are looking to get high. We will also be able to recommend t



The line chart on profits might be a bit deceptive because salaries are suppressed during the first year. We expect to make a relative low profit margin of only 1 or 2% on sales during this entire startup period. It’s a very competitive business. Particularly for these initial three years, we expect to spend almost all of our revenue on cost of goods, marketing, promotion, and fixed costs. 

Furthermore, our projections include some leeway for the unexpected problems we are sure to encounter along the way. 

Financial Highlights by Year

Chart visualizing the data for Financial Highlights by Year

Financing Needed

We’re projecting an estimated $120,000 owner investment needed to finance this business through its early stages. That’s not counting some lower-than-normal salaries as well, during the first year. 

What we’re financing includes the fixed assets for store furniture and fixtures, plus startup expenses including legal, leasehold improvements, and so forth. These expenses are shown by category in the first three months of expenses. 


Problem & Solution

Problem Worth Solving

Starting a cannabis store is all the rage. However, there is a lot of expectations and stereotypes that come with walking into a shop. People think they are going to see lava lamps and psychedelic music and staff that is stoned behind the counter. 

Also people are uncomfortable with giving their driver’s license and address before entering the shop. It is necessary by law but some potential customers are worried that means they will be on some government "bad" list. 

In short, customers want the products but can get shy about purchasing the goods. 

Our Solution

We are well supplied with products, we have all the best products at all the best prices. Further, our store is welcoming and puts the customer at their easy. The lounge is set up like a comfortable doctor’s office and the experience of giving their information is like giving over health insurance info. We show the new customers around to get them comfortable with the store. The returning customers are left to shop at their leisure and ask questions if they want. 

Target Market

Market Size & Segments

Oregon cannabis consumers were quick to adopt concentrate products. While Colorado saw concentrate sales at 19%, a share gained over months of growth, Oregon adult-use concentrate sales were 17% right out of the gate after Early Start in June 2016. Why? A more sophisticated consumer? Repeat exposure to products rec customers couldn’t buy? Medical program drop out? The catalyst remains unclear, but in Q3 and Q4 of last year, concentrates comprised 19% of total sales, on par with Colorado!

What kinds products performed the best last year?

Last year Oregonians bought a total of $67 million in cannabis concentrate products. Of that $67 million, almost $38 million of it was in the adult-use channel. (A feat considering consumers could only buy products for half of the year.) By far the biggest sub-category was vape, which made up almost 50% of total concentrates sales. Out of $30 million in vape sales, almost $20 million came from adult-use.

While edibles are still a small portion of Oregon adult-use sales (only 8%), there was still some interesting growth in this category last year. Across the state, dispensaries sold over $27 million in edibles last year ($13.5 million of that coming from adult-use). In the chocolates category we saw a strong performance from chocolate bars and in candy a strong showing for taffy and gummies. Why are these items so popular? We shall see, but one idea could be that these products better allow the consumer to control dosage. Expect “dosable” or “microdose” products to be big in the coming year.

Pre-rolled joints grew aggressively all throughout last year. During the summer months, even when adult-use customers could have finally chosen concentrates or edibles, they continued to increase their spend on pre-rolled joints. Further, roughly 85% of all pre-rolled joint purchases were made by adult-use customers in 2016.

In a huge upset ;), Gorilla Glue #4 overtook Blue Dream in total sales last year in the adult-use channel. While Blue Dream remained the most popular in volume (606,092 grams sold for Blue Dream versus 541,773 grams for Gorilla Glue #4), Gorilla Glue #4 overtook Blue Dream when it came to revenue ($5,600,999 for Gorilla Glue #4 and $5,302,050 for Blue Dream.) The flower market remains very saturated, with only 15% of total flower sales coming from the top ten strains last year. 

There will be massive growth in the foreseeable future. U.S. Cannabis Retail Sales Estimates: 2013-2020 We estimate that retail sales of medical marijuana (MMJ) and recreational cannabis will hit between $3.5 billion and $4.3 billion in 2016, which amounts to year-over-year growth of 17% to 26%. Some factors that will fuel growth this year:  

Recreational cannabis: Sales of recreational (or “adult-use”) marijuana soared in Colorado and Washington State last year, and the trend is expected to continue in 2016. Oregon also will contribute heavily to an uptick in sales, as the state’s recreational marijuana industry is growing rapidly after its launch late in 2015. Recreational sales are still in their infancy, and at this point the sky is the limit.

New markets: Several states that started medical cannabis sales recently – most notably Illinois, Nevada, New York and Minnesota – will see sizable revenue spikes in 2016. A handful of new markets, including Hawaii and Maryland, also might come online late this year, helping boost industry retail revenues.

 Expansion of mature markets: Many states that established medical cannabis programs years ago are going through a growth spurt, including Arizona, Connecticut and New Mexico. And despite chaos and uncertainty in California’s medical marijuana industry, sales could continue to grow in the nation’s single largest MMJ market.

Total annual retail sales of medical and recreational cannabis could reach $11 billion in 2020, posting double-digit growth each year along the way. Sales of recreational cannabis could surpass those of medical marijuana as early as 2018, though MMJ revenues will continue to make up a big piece of the pie. Note that our goal is to provide conservative, realistic financial forecasts that reflect the huge degree of uncertainty in the industry.

 U.S. Cannabis Industry Total Economic Impact: 2013-2020 Beyond cannabis sales at retail and the associated taxes that are collected, the industry’s total economic impact is substantial. Using the concept of an economic multiplier that quantifies the “ripple effect” of an initial dollar spent at retail, we estimate the total impact of the industry on the U.S. economy based on caannabis retail sales to be between $14 billion and $17.2 billion this year, and up to $44 billion by the end of 2020. Overall, for each dollar spent/earned by cannabis companies, an additional three dollars in economic benefit will be realized. For example, a cannabis dispensary/store makes a sale for $100. The business then uses a portion of that money to pay an employee, who in turn uses a portion of that money to buy groceries at the local grocer, and so on – a process that creates a ripple of economic value, most of which remains in local communities. Another example: An infused products maker pays $1,000 to a wholesale grow company, which then uses that money to buy supplies from a vendor, which then uses a portion of that money to pay employees, who then go out and spend their money in the community, etc. This multiplier can be applied to any dollar amount of spend or revenue along the supply chain, and can also be used to demonstrate the economic contraction associated with a reduction in revenue or other expense or tax cut.

Cannabis Annual Sales Vs Other U.S. Industries & Goods So how does the U.S. cannabis industry compare to other industries in terms of sales? Last year, sales of medical and recreational cannabis (the latter of which was only legal for all of 2015 in two states) surpassed those of beloved Girl Scout Cookies, as well as domestic sales of e-cigarettes. The total estimated annual demand for recreational cannabis alone in the United States is about $40-$45 billion, exceeding that of craft beer, wine and organic food. Currently, most of this value is realized on the black market and isn’t taxed, hinting at the tremendous potential for this part of the industry in the future.

 Estimated Number Of Cannabis Businesses In The U.S.: 2016 In another measure of the cannabis industry’s tremendous economic contribution, the number of companies in the industry is now in the tens of thousands, proving marijuana’s very real impact on the American economy. For sector-specific details on employment, look in Chapter 1. The figures in that section not only help cannabis entrepreneurs and interested observers quantify this aspect of the industry’s impact, but they also provide critical benchmarks and targets for new and growing businesses.


Current Alternatives

Our customers have many alternatives to choose from.  

There are 28 recreational marijuana shops, five medical marijuana dispensaries, and two shops selling recreational and medical marijuana. 

Out of the 31 businesses nearly half, or 15 of them, are closer than 1,000 feet to another pot shop, he found. “All of the businesses in close proximity are in the downtown area or near 6th and 7th Avenues". The new shops must set up in the retail areas that are zoned for marijuana. 


Business owners have encountered significant obstacles in a trade that is expected to grow at a compound annual rate of 30% between 2016 and 2020. All the dispensaries, new or established face the same four issues: 

Federal Illegality

Marijuana is illegal at the federal level. States’ rights have enabled voters to legalize the use of cannabis for personal consumption. However, the possibility of prosecution exists for industry participants who run afoul of the tight regulatory environments adopted by each state. Classified as a Schedule l drug, cannabis is federally viewed as a dangerous drug that has no accepted medical use and presents the greatest risk for physical and/or psychological dependence. The U.S. Department of Justice under President Obama has relaxed its stance on cannabis enforcement. However, any hint of operational impropriety subjects business owners to federal scrutiny and laws that supersede state laws.


The marijuana industry is heavily taxed. Recreational dispensaries that offer the sale of the plant’s coveted flowers, or buds, face tax rates up to 70%. Furthermore, the Internal Revenue Service (IRS) disallows any deductions for businesses that deal with the distribution of illicit substances. 

Banking Issues

Big banks will not extend services to marijuana purveyors. The refusal of financial institutions to accept marijuana-related deposits stems primarily from the drug’s illegal federal status. Additionally, banks are wary of peripheral activity associated with the sale of cannabis. Concerns revolve around potential sales to children, increased incidences of impaired driving and the funding of criminal enterprises.

Black Market

Sky-high tax rates on the sale of cannabis open up significant opportunities for illegal sellers. A $30 eighth-ounce of marijuana in Colorado is subject to a tax of 8.59%, or a 29% effective rate. In Colorado, 59% of marijuana users turn to state-regulated dispensaries to purchase product. The remaining cannabis users resort to underground acquisitions of the drug, an ounce of which legally can be given to another adult.

What occurs beyond a state’s borders sparks other concerns. As much as 80% of marijuana legally grown in Oregon is processed and illegally shipped to other states, where black market sales evade taxation on both sides of the transaction.

Cash, Crime and Security

Due to the lack of a banking relationship, all transactions involving the growth, processing and sale of cannabis are consummated in cash. Proprietors must pay employees, vendors and the state revenue departments without the means of electronic transfers from checking or credit card accounts. The accumulation of massive cash stockpiles presents safety risks to owners tasked to store and transport stacks of legal tender. Security measures such as armed guards and cameras have been beefed up at the retail level, and at tax offices where payments must be made in person.

Although more criminal activity cannot be directly correlated to the legalization of cannabis, industry growth hinges largely on the repeal of federal marijuana laws and the tolerance level of a new presidential administration.


Our Advantages

We will distinguish ourselves from the competition. 

1- The look. We will take the care to update the cold warehouse look into a inviting lounge. The receptionist will get the customer’s information and license. They will offer water and there will be non cannabis snacks, candy and fruit. 

2- Federal Illegality and Black market. This risk is minimal since we will follow all the state laws. States will protect the dispensary owners who follow all the laws and have the proper licenses. Our dispensary will be small. A large operation is a disadvantage because they are more likely to get Federal attention. Government officials could prosecute to further their own personal agenda. 

Following this principle means we will not be participating in the black market. We will make sure all our partners and inventory have the proper legal documentation. We are only at the mercy of the government while doing things that break state laws. 

3 – Taxation – we will pay our taxes correctly and on time. We will cut our costs by keeping our staff small but extremely knowledgeable and using contacts to keep our customers favorite products always in stock. 

4 – Banking issues. There is a community credit union that will give us a bank account that will allow us to charge credit cards. We won’t have to get a safe or be worried about depositing cash. All sales will go directly to our bank account. 

5 – Crime and Security – We will have a security guard as well as security cameras and other precautions to make sure that no one takes off with our inventory. We will be less of a target then the shops around because we won’t have any cash to steal. 

Keys to Success

Keys to Success

Our keys to success are: 

  • name and brand recognition 
  • reliable inventory. We always have the products our customers want 
  • knowledgeable staff
  • customer word of mouth 


Marketing & Sales

Marketing Plan

Pot’s image problem has since begun to fade, especially in states like Washington and Colorado. Two more states, Oregon and Alaska, have legalized the recreational use of marijuana, and several others may soon have the opportunity to join them. But the people who sell the drug are facing a predicament. In a legal market, cannabis—the plant from which pot is derived—comes to resemble many other farmed products: One grower’s plant looks and tastes a lot like his neighbor’s. (Some pot connoisseurs with sensitive palates can differentiate among strains of cannabis—and even among brands—but they’re as rare as the coffee drinker who can guess his beans’ origins.) 

We plan to change all that using all the tools of the modern world including: 

Twitter – we will join the conversation and point customers towards knowledgeable people and blogs as well as our own. We will keep up on the most popular products for those who like to get high. 

Blog – Write about our experiences and recommendations. We will also sign ourselves up and contribute to This is a database which will helps those who are looking for cannabis find us. 

Facebook – Show our most popular buds as well as the best edible recipes 

Promotions – we will give influencers discounts so they can try our product and see it is in fact what they are looking for. This will allow them to say with certainty we have the best products on the market.

We make the customer feel comfortable – never underestimate the simplicity of remembering people and making them feel at home in your store. 

Sales Plan

Our Sales plan is: 

  • We will have a website and a blog to promote customer knowledge 
  • We will be members as well as one or two other websites where customers go to find stores selling marijuana products. 
  • We will get a partnership with as many suppliers as we can and promote that we have those products. 
  • Our edibles will be from suppliers that use clean and organic products. 


Locations & Facilities

We will have 1500 square feet. Our space will be on the first floor and very close to the street so it will be easy to spot our signage.

There will be a back area for inventory and storage as well as a safe. There will be a place for staff to eat lunch and take a break for a few minutes. 

The main store area will be set up with counters as well as glass shelves like a jewelry store will the customer can see what we sell but can’t touch our products with out one of our staff helping them. 

The front area will have a desk and comfortable lounge chairs/sofa as well as a table with magazines. The magazines are purely as props to make them feel comfortable. We will not leave customers there long enough to read.  

Milestones & Metrics

Milestones Table

Milestone Due Date Who’s Responsible
Legal entity established
Nov 15, 2017 Ownership
List of top 10 inventory items set
Dec 01, 2017 Ownership
List of top 10 vendors complete
Dec 13, 2017 Ownership
Location locked in
Jan 26, 2018 Ownership
Location fix-up contracted and underway
Feb 16, 2018 Ownership
Location ready to launch
Mar 14, 2018 Ownership
Initial inventory in place
Mar 15, 2018 Ownership
Apr 02, 2018 Ownership
Launch promotion
Apr 20, 2018 Ownership

Key Metrics

  • Sales
  • Customer email list
  • Customer visits
  • Gross margin by product line
  • Sales per day and hour
  • Number of items stocked



Ownership & Structure

This business to be established as an LLC owned at the beginning by [name omitted], who will be investing her own savings.


Management Team

For this initial time frame at least, this is an owner operated business with additional salaried help from a security guard and a second expert. We may need part-time help as we grow. The plan includes some additional spending on salary later on. 

Personnel Table

2018 2019 2020
Owner (0.92) $27,000 $65,000 $80,000
Security Guard (0.92) $18,000 $24,480 $24,970
2nd Sales person (0.94) $41,000 $75,000 $80,000
Additional (0.67) $45,000 $60,000

Financial Plan


Key Assumptions

  • No significant change in regulation and enforcement related to cannabis businesses in from the state of Oregon, or Lane Country, or Eugene. 
  • We assume fierce competition among the various entrants to the retail market. Not all retailers will survive. This makes differentiation essential. 
  • Continued competition between relatively equal sized players, with no emergence of a major dominant retail brand. 

Revenue by Month

Chart visualizing the data for Revenue by Month

Expenses by Month

Chart visualizing the data for Expenses by Month

Net Profit (or Loss) by Year

Chart visualizing the data for Net Profit (or Loss) by Year


Use of Funds

Our projections indicate approximately $110 in startup costs including all the operating expenses projected for the first three months of the plan – before launch – plus the purchase of an estimated $17.5K in furniture and fixtures and signage and such; and initial inventory. 

Sources of Funds

Owner [name omitted] will commit $120K of personal funds to finance the starting costs of the business from the beginning until it reaches cash flow break-even in the sixth month. 


Projected Profit & Loss

2018 2019 2020
Gross Margin $244,988 $339,750 $405,750
Operating Expenses
Salaries & Wages $86,000 $209,480 $244,970
Employee Related Expenses $13,600 $37,000 $44,000
Location rent $20,000 $24,000 $24,000
Marketing and promotion $16,550 $12,000 $12,000
Utilities $2,400 $2,400 $2,400
Legal and compliance $22,000 $18,000 $18,000
Other & miscellaneous $15,000 $14,000 $16,000
Interest Incurred
Depreciation and Amortization $3,300 $3,825 $4,425
Gain or Loss from Sale of Assets
Income Taxes $11,243 $3,238 $6,792
Total Expenses $1,171,856 $1,688,193 $2,004,837
Net Profit $54,894 $15,807 $33,163

Projected Balance Sheet

Starting Balances 2018 2019 2020
Cash $0 $182,819 $57,066 ($43,213)
Accounts Receivable $0 $0 $0
Inventory $0 $113,688 $136,058 $136,058
Other Current Assets
Total Current Assets $0 $296,507 $193,124 $92,845
Long-Term Assets $0 $17,500 $20,500 $23,500
Accumulated Depreciation ($3,300) ($7,125) ($11,550)
Total Long-Term Assets $0 $14,200 $13,375 $11,950
Accounts Payable $35,546 $42,578 $42,627
Income Taxes Payable $8,891 $800 $1,688
Sales Taxes Payable $91,375 $72,420 $86,615
Short-Term Debt
Prepaid Revenue
Total Current Liabilities $135,812 $115,798 $130,930
Long-Term Debt
Long-Term Liabilities
Paid-In Capital $120,000 $120,000 $120,000
Retained Earnings $0 $0 ($45,106) ($179,299)
Earnings $54,894 $15,807 $33,163

Projected Cash Flow Statement

2018 2019 2020
Net Cash Flow from Operations
Net Profit $54,894 $15,807 $33,163
Depreciation & Amortization $3,300 $3,825 $4,425
Change in Accounts Receivable $0 $0 $0
Change in Inventory ($113,688) ($22,371) $0
Change in Accounts Payable $35,546 $7,031 $50
Change in Income Tax Payable $8,891 ($8,091) $888
Change in Sales Tax Payable $91,375 ($18,955) $14,195
Change in Prepaid Revenue
Investing & Financing
Assets Purchased or Sold ($17,500) ($3,000) ($3,000)
Investments Received $120,000
Dividends & Distributions ($100,000) ($150,000)
Change in Short-Term Debt
Change in Long-Term Debt
Cash at Beginning of Period $0 $182,819 $57,066
Net Change in Cash $182,819 ($125,753) ($100,279)