How much does it cost to open a dispensary in New Jersey? You asked, and we answered.
Since January 2021, cannabis in New Jersey has been legal for medical and recreational use. In April 2022, licensed sales of recreational cannabis dispensaries officially began, enticing savvy business owners to wonder what the costs might be associated with opening a dispensary.
The sale of cannabis in the state is a lucrative business, as records showed that cannabis dispensaries generated $24 million in the first month following its legalization.
But what costs do dispensary owners and dispensaries have to consider before they open their doors? We’ll cover that and more here in this article.
So, how much does it cost to operate a dispensary in New Jersey?
The cost of opening a dispensary in New Jersey is likely between $250,000 to $2,000,000. The variance is due to several cost factors, including where your dispensary is located and the type of license you acquire. Opening a micro business dispensary costs less than the projected amount.
What are some cost factors to opening a dispensary in New Jersey?
Some costs you will need to consider when setting up your budget include:
- Licensing Fees
- Location Scouting
- Dispensary Technology Setup
- Capital requirements
- Realtor leasing
- Professional fees
- Security and surveillance systems
- Business equipment
How much is a dispensary license in New Jersey?
A dispensary license In NJ typically costs between $1,000 and $10,000. However, it depends on the type of business that wants to own and operate the dispensary. A standard business dispensary costs $10,000, while a microbusiness dispensary costs $1,000, according to the stipulations of the New Jersey Cannabis Regulatory Commission (NJCRC).
There is a concession for microbusiness owners looking to open a dispensary in the state, as they get to pay less than the standard business dispensaries. However, this concession affects the quantity of cannabis the microbusiness dispensary can sell.
How much is location scouting in New Jersey?
The cost incurred in location scouting in New Jersey depends on the individual or agency doing the scouting for you. You may have to pay between $500 and $800 to help scout an ideal location for your dispensary in New Jersey.
An ideal location is a vital part of answering the question, “how much does it cost to open a dispensary in New Jersey” because your site affects your bottom line and profit. Engaging a location scout helps to increase the possibility of getting a prime and profitable location for your dispensary.
What are the marketing and advertising costs associated with opening a dispensary?
When opening a dispensary, you may want to consider advertising and marketing costs for things like setting up your eCommerce store (website), a dispensary grand opening or launch, or cannabis-specific digital marketing agencies. These prices vary widely; however, it would be wise to hire an expert in the industry as cannabis advertising and marketing regulations are unique to those of other sectors.
What are some tax costs to consider in New Jersey?
Dispensary taxes are also different than other retail or businesses as there are taxes based on the substance you are selling. One example is the 280E tax that does not apply to other retail stores. Before opening a dispensary in New Jersey, be sure to do your research on additional taxes you may need to pay before you open.
What are some staffing costs to consider in New Jersey?
Before you open a dispensary, you will need to hire a dispensary team to help you get your store off the ground. People you need to hire for your dispensary might include:
- A compliance officer
- A cannabis retail store manager
- An inventory manager
- Legal counsel
- A CPA
Costs of staffing your store could run you around $250,000 a year, so be sure to plan wisely.
What are some operational costs to consider in New Jersey?
If you are running a brick-and-mortar store, you will need to consider your operational costs. These include rent, hydro, building maintenance, retail renovations, store licenses, technology, and more. Calculating all your possible costs in advance will help you succeed when opening a dispensary in New Jersey.
Is opening a dispensary profitable?
The profitability of a dispensary depends on how much a dispensary owner makes, which further boils down to the location of the dispensary, the quality of products, and the type of operational technology used in running the dispensary. It means that your investments in the dispensary determine your chances of profitability.
What technology should you use to open a dispensary in New Jersey?
A dispensary looking to be profitable needs reliable and fast hardware and software solutions. From hardware such as computers, barcode scanners, cash drawers, and the likes to software such as compliant POS systems explicitly created for cannabis stores and businesses.
Software that dispensaries will need before they open their doors include:
- Inventory management software
- Website, e-commerce store
- Product Menus
- A compliant point of sale (POS) solution
- An employee management system
- Dispensary payroll software
- Customer relationship management system
- Security system
- And a payment platform
Dispensary owners should also note that New Jersey operates using the Metrc track and trace system, so choosing a POS solution that integrates with Metrc is necessary.
Another critical software element to keep in mind is your payroll software’s compliance and automation abilities. Opt for a dispensary payroll solution that can automate tax and payroll calculations in New Jersey to save time and money while managing business operations.