On the surface, running a cannabis-based business is just like any other business. From staffing, to wages, inventory, and marketing, businesses thrive when there is a cohesive and well-oiled machine – that serves customers, that respects its staff, that provides a unique service or product to society, and above all is profitable. But as many a business-owner will attest to, running one is far from easy. But cannabusinesses have additional potentially gray areas that owners must navigate. Compliance and tax issues stand out among the top concerns facing owners in this industry. All of this legal, mumbo jumbo, according to Cannabis Dispensary magazine, can lead a dispensary owner into the land of unnecessary errors.

Here are eight pitfalls you could make…but with advice on how to avoid doing so.

Pitfall Number 1: Not being well-versed in cannabis law.

The rules governing marijuana are ever-changing. You need to stay abreast of cannabis law. An, “I didn’t know,” simply won’t cut it. It takes time to sort through the rules. Don’t be lazy. Take the time to understand the laws and how they impact your daily operations. And related to shirking your duties in staying compliance-knowledgeable, you are risking your entire business if you think that some compliance with the law is good enough. And if you do it right all the time, you won’t risk drawing undue attention to yourself.

Pitfall Number 2: Forgetting about the rest of business compliance.

From building codes, to permits, workplace safety, and more, simply being a business owner means you need to follow numerous laws. Don’t forget that you are not just a dispensary owner; you are a business owner.

Pitfall Number 3: Location, location, location…or not.

You wouldn’t open up a burger joint in the middle of a vegan neighborhood. The same goes for a dispensary. Location, location, location, applies to any business. You must build where your customer base is the strongest, or where your customers can access you the easiest. With dispensaries, there is also the added issue of regulations regarding placement (e.g. near schools, playgrounds, etc.).

Pitfall Number 4: Hiring lousy employees…or better yet, being a lousy trainer.

So, you know cannabis law like the back of your hand. But you don’t train your employees to know it like the back of their hands. You might think that if the big stuff hits the fan, you’ll be the one dealing with it anyway. This is no doubt true. But why not run your business with prevention in mind?

Your employees are extensions of you and the way you do business. Customers more often interact with these people, than you. So, anyone and everyone must know cannabis law. Don’t let your employees make preventable mistakes that could ruin your business. Because regardless of who commits the mistake, you as the owner have to answer for it.

Pitfall Number 5: Dealing with cultivators who shirk the law.

Every aspect of your cannabusiness must be kosher. If you haven’t already caught on, all of the pitfalls deal with compliance with state laws. The same applies to companies you do business with. Take your distributors and vendors. It might be tempting to cut some deals or not even think about the licensing status of your vendors. Don’t risk your license by buying from those without licenses. And don’t be afraid to draft contracts between partners.

Pitfall Number 6: Going it alone.

It will take some effort, but spend some time seeking out a cannabusiness expert to help guide you through applications, licensing, location scouting, investment, and more. But not everyone will be an asset to your business. And you will simply waste time and lots of money. And you won’t be any wiser for the effort.

Pitfall Number 7: Poor choice of partner.

Starting a business with another is exciting. But before you get too far into the process, make sure your business plan is well planned out. This means initial investment, other financing (particularly who is going to pitch in when funds are low), individual responsibilities, ownership percentage, etc.

Pitfall Number 8: Not calling Pinnacle Consultation.

Whether it’s your first attempt at self-employment or you are old hat at running your own business, operating a small to medium-sized cannabusiness takes more than locating an empty storefront, adding some product, and hiring some staff. Pinnacle Consultation are the experts you need right now regardless of where you are in your business. From cannabusiness creation, to compliance, to development, to operations, Pinnacle works with you at every step. We’re 24/7 focused on the cannabis industry. that means we’ll be 24/7 focused on your success. Schedule an appointment or call us today.