Asking the Right Questions Can Get Your Store Open Sooner - By Months or More

This article was originally featured in Cannabis Business Executive

Barriers abound, especially for cannabis retailers opening in the U.S. built environment for the first time, and asking the right questions is critical to success. 

It’s important to know the right questions to ask: Is the site zoned correctly—or can it be changed? What’s the ideal dwell time? Is the goal to move people in and out rapidly, or encourage them to linger? What equipment, furnishings or finishes will drive the schedule, due to supply chain issues?

For prospective cannabis retailers seeking to operate in the United States, it can be difficult to gain a foothold in competitive markets. In addition to the barriers of entry faced by traditional retailers, dispensaries face the added challenges of operating in cannabis – an industry that includes a strenuous licensing process, strict compliance standards, and complicated legal guidelines for operating.

Throughout this process, there are many complications that can cause delays in the opening of a dispensary or may prevent the store from opening altogether. Failing to ask the right questions during each stage of development can be detrimental to a project timeline and budget, but when the right team is in place, dispensaries can keep schedules on track and even open faster than their competition.

Site Considerations

Many of the greatest contributors to timeline delays and budget increases are due to poor site information and considerations. Since the areas in which dispensaries can be located are often limited by cannabis business regulations and zoning restrictions, site scrutiny of prospective locations can decrease as people become desperate to find a property.

Sometimes, it can be difficult to even find a landlord willing to work with a cannabis dispensary or the capital needed to fully build out a compliant space. As licensing deadlines approach, it is not uncommon for applicants to sign on a property without properly evaluating the location, which may lead to the leasing or purchasing of an industrial property rather than one intended for retail.

While it is not impossible to remodel an industrial space for use as a dispensary, it can delay the opening of the store and increase the costs substantially. When an industrial building is updated for retail, the entire building must be brought up to code – a cost which is seldom considered by someone entering the industry for the first time.

Instead of choosing a site and determining what needs to be changed after signing a lease, prospective dispensary operators should ensure a licensed architect or engineer inspects the property to establish the building updates needed as well as how long these are expected to take and how much they will cost. Even if the dispensary decides to move forward with renovating an industrial space for a dispensary, it is important that an experienced team is in place to revise the construction schedule and budget to be reflective of the necessary work.

Dispensary Design and Construction

The dispensary design process normally begins during cannabis business licensing since regulators typically want to see some form of premises diagram or floor plan layout. To ensure the application is not denied due to a poorly designed floor plan, it is imperative to get an architect and design team with experience in the cannabis industry involved in the project early. 

During the licensing process, dispensaries can also get a head start planning their business by starting to create their design concept. This design should not be tied to a single property or market but should be used to start setting standards for the brand. By beginning to form the store’s branding and interior design early, dispensaries can save time getting to the construction process post-licensure.

Another strategy to opening a dispensary quickly is to prepare architectural documents at-risk (the potential financial loss if the dispensary fails to win the license) while waiting for cannabis business licenses to be awarded. This involves bringing in an architect to survey the property early on so that building permits can be filed immediately after obtaining a license. 

Although it is a calculated risk, this strategy can be especially effective in states with emerging cannabis markets that are just starting to license dispensaries. Since everyone who wins a license in the initial application process will want to be the first dispensary operating in the state, it is often a race to open. By starting the process early, dispensary operators can ensure they do not sacrifice on quality in an attempt to open before their competitors. 

Timelines and Budgets

While there are many factors that may impact the timeline of developing a cannabis retailer, it typically takes about one year to design and buildout an operating dispensary post-licensure. Not including the licensing process and local level approvals, it usually takes about 2-3 months to design a brand from scratch, 2-3 months to prepare architectural documents, and then 5-6 months for tenant refurbishments. If a location is being built from the ground up, this timeline will increase.

Though some delays should be anticipated in the cannabis industry, involving the right team early on will help new dispensary owners estimate a realistic schedule for opening. An expert will understand that timelines and budgets should remain flexible throughout the process to adjust for supply chain issues, additional regulatory requests, or other unforeseen delays – and will plan for solutions. 

Supply chain issues are common for dispensaries and traditional retailers alike and are one of the main causes of project interruptions. Delays due to the supply chain can become even more lengthy when a brand chooses highly customized design pieces and fixtures. Still, a good designer is able to find a balance between customized and ‘off-the-shelf’ design pieces that are able to distinguish the dispensary from competition, reduce costs, and avoid some of the supply chain interruptions experienced by other brands.

Regardless of the reason, unexpected setbacks can inflate costs and often result in lost sales, especially if a dispensary has already purchased product they are waiting to sell. Additionally, when a dispensary buildout is delayed, this can increase the costs incurred by the general contractor as they must increase the amount of time spent on the site. If the property is under lease, dispensary operators may also have to pay dead rent on a store that is not open, and may not even be under construction yet.

How to Prevent Delays in Opening

Having an inexperienced team is the most common reason for delays in opening a cannabis dispensary, but for prospective cannabis operators, it can be challenging to know who to get involved and when to involve them. 

In addition to the architects, designers, and contractors needed to ensure permits, drawings, and inspections are completed on schedule, it is also important for the dispensary team to have someone either on staff or retained to manage the project. Though this person’s experience does not need to be strictly cannabis, there should be someone on the team with knowledge of brand rollouts and retail development. Since not every prospective dispensary operator will have an owner or team member that fits this background, it is crucial to enlist the help of experts to design and buildout the cannabis retailer. Despite any challenges that may arise, building a team capable of asking the right questions during the planning and development of the dispensary can ensure the business opens on time and on budget.

About The Author

Virginia Maggiore, AIA is Principal at RDC. Since joining the company in 2019, she’s built the firm’s practice of Retail Store Rollout and Planning, adding notable clients to the firm’s roster and garnering accolades for her work from colleagues and clients. Virginia is a licensed architect, responsible for developing the in-store experience and customer journey, creative strategy, visual communication, and marketing integration for retail clients. In the cannabis industry, Virginia has brought her expertise to over 15 retail dispensary projects, including with brands such as Cookies and Stiizy. For more information, visit rdcollaborative.com.