I’ve had some feedback on my post “no small business” where I talked about some of the costs and challenges that make it impossible to open a “small” retail cannabis shop, and the ways that government makes it impossible to “keep it simple.” People seem really interested in the challenges and costs of opening a “mom and pop” cannabis shop.
The question of where the money goes is interesting:
NON-INVENTORY START-UP COSTS TO SPEND BEFORE OPENING
You can see that 13% is just spent for professionals to help us navigate regulation. Another 10% is purely material costs to meet accessibility requirements for the building. Security considerations make up over 37% of our costs. This is due to the nature of the business and the requirements of the regulating bodies. Licensing is another 6%, and the POS another 3%. So even if we skimp on the display counters, marketing, and do the work ourselves (we have kept trades to under 4%!), the vast majority of the costs are unavoidable and reducing them would significantly impact our compliance (so we couldn’t open) or our security (so we would be sitting ducks, given our location and remoteness, or not allowed to open if the AGCO felt we weren’t secure enough).
To be more specific, here are the numbers I watch from a budget perspective:
|Security System & Install||$25,000|
|Security Doors & Install (includes door opener systems)||$35,000|
|Entryway Grading (accessibility) & bollards (security)||$7,500|
|Shelving for Inventory Room||$3,000|
|Consulting (Cannabis Law & Ops)||$15,000|
|Signs & Awning||$8,000|
|TV Menu/Tablets/POS Equipment||$7,500|
|First Inventory buy||$60,000|
|Hold in bank||$30,000|
When I say it’s not possible to do this for under $250k, this is what I’m referencing. This is our real-life experience of the costs, having made every effort to find a cheaper way, avoid the unnecessary, keep it simple, start small. We’re in for a penny, so we’re in for $250,000. Let’s hope the ROL comes through soon!