Introduction: What Must Be Learned about Legal Cannabis Selling
Marijuana legalization has been a major issue in the U.S. for quite a while. The arguments of both proponents and those opposed are very legitimate. As a result, running a shop in the states where cannabis retail is allowed, such as Colorado, is possible yet very complicated.
Thesis Statement
Despite the fact that, according to the Colorado laws, one has the right to open a pot shop after getting the appropriate type of license from the local authorities, one must start the procedure with defining the type of clientele that their business is going to be targeted at.
Research Methods: Considering The Best Options
In the process of qualitative research, an analysis of already existing sources was carried out. It was decided not to use interviews as a research tool since an interview involves the introduction of subjective opinions and information. For the given research, it is crucial to operating objective facts and trustworthy data.
Primary Sources: Laws And Regulations
The Colorado laws are the key to understanding the rules for starting a cannabis shop. Therefore, such sources as Retail Marijuana Rules (Colorado Department of Revenue 2) and Medical Marijuana Rules (Basis and Purpose – R 103 1) were used for the research. How to Start a Marijuana Dispensary in Colorado was utilized as the key source. Finally, the Colorado set of laws and regulations regarding private entrepreneurship, in general, was utilized.
Secondary Sources: What Researchers Have To Say
In the course of the research, a range of articles on starting a business in general and marijuana shops, in particular, was analyzed. Several academic journals were used as a reference. In addition, Rejda’s book on risk management was used.
Instructions for Selling Cannabis: it is not as Wrong as it Sounds
Before defining the best avenues for starting one’s own cannabis business, one must figure out what kind of audience their business is going to advertise to (Salimath and Jones 85). Depending on whether the shop will provide cannabis for the people who are terminally ill and, therefore, need a pot to stifle their pain, or whether the cannabis will be sold for those who use it as a means of relaxation, the steps to be taken may differ considerably. Therefore, the choice of the customers, which the promotion campaign and the business, in general, will be aimed at is the first and the most important step in starting a pot shop in Colorado or elsewhere.
The next step is defining what kind of business will be started. Two types of business entity are traditionally seen as the most obvious choices. To be more exact, one can structure one’s business as either a DBA (Doing Business As), also known as Sole Proprietorship and the LLC. While in the former case, one is responsible for literally any actions on behalf of the entrepreneurship, in the latter instance, one has a limited amount of responsibilities. However, LLC also presupposes that one’s business assets are better protected than they are for a DBA leader (Colorado Department of Revenue 5).
It should be noted that each method has its upsides and disadvantages. For example, with a DBA entrepreneurship scenario, one will be able to create a well-integrated company and introduce efficient management principles, being able to promote cooperation between the company’s departments and supervise the company’s internal processes closely.
In the LLC scenario, the owner of the shop cannot make radical changes on their own, yet the risks are much lower, since, in case of a major loss, the co-owners of the shares will also have to share the losses (How to Start a Marijuana Dispensary in Colorado para. 1). Thus, it will be necessary to choose between independence and financial safety.
Common Requirements
Even though there are different types of cannabis shops, common requirements for creating a company that sells cannabis exist. To start with, it will be necessary to obtain a marijuana retailer license, which is a part of the Master Business License application. Before submitting the application, one must carry out several important steps. First, an analysis of the background of the sponsors, business owners, and their relatives (spouses, other family members, etc.) must be completed.
Afterward, the government-issued identification of the aforementioned parties must be obtained. Next, it will be necessary to design a financial statement, which will help account for the money that has been invested in the entrepreneurship. Finally, the copies of bank statements and tax returns must be prepared (Basis and Purpose – R 103 4).
As soon as the license is retrieved, it is imperative to enhance the shop security. Creating a completely safe environment is hardly possible, yet avoiding the most typical mistakes, which may lead to thefts, robberies, and hold-ups, is quite possible. As a rule, it is suggested that the staff should have I.D. badges, which will prevent the instances of shoplifting and identity theft. Setting a secure and accurate alarm system is the next step towards providing a safe environment for the shop assistants to operate in.
Of course, surveillance cameras will have to be installed in several areas of the shop, making an observation of the entire premises possible (Andersson, Hansen and Rees 333). It will be necessary to keep the information about the surveillance cameras secret from most of the staff; otherwise, shop assistants will have an opportunity to abuse their power and steal from the shop.
Finally, a virtual database of the products and the data concerning the sells must be organized, with limited access to the data and a set of strong (a minimum of eight (8) uppercase and lowercase letters, digits and characters, e.g., *, %, ^, etc.) password. Although these measures do not guarantee that the shop products and data will be intact, these steps will still pose a range of obstacles in the way of the alleged violators (Feruza and Kim 17).
Recreational Shops
As it has been stressed above, there are two key types of cannabis shops, and recreational one is definitely the rarest. Because of the legal status of cannabis as a psychoactive drug, obtaining a license for the given type of shop is very complicated (Svrakic 90).
Medical Shops
In contrast to the recreational cannabis business, the one that sells medical marijuana is much easier to obtain the license for. Seeing how the purpose of the business existence is much more justified, the license will be issued much sooner for the person, who starts a medical marijuana shop (Svrakic 90).
Conclusion: Managing Pot Shops in Colorado
There is no need to stress the fact that selling cannabis, whether for recreational or medical purposes, is a very risky business. As a result, it is imperative to make sure that the business is fully legal, which makes a major part of the process of setting up a cannabis shop. Obtaining the license is a major part of proving the legitimacy of the business (Svrakic 91).
However, the procedure for opening a pot shop in Colorado also depends on the purpose of the shop to be created in the first place. As a rule, the distinction between the target audience, which the company is going to promote the product to, should be defined first. Thereafter, it will be necessary to make a choice between building a medical and a recreational marijuana shop. As long as the major legal issues are tackled, the shop is ready to open (Svrakic 91).
Security Issues and Other Specifics of the Business
Apart from dealing with legal concerns, one must also take the necessary measures to provide decent security for the shop and the products. Because of the controversy around the subject matter, as well as the fact that cannabis is also listed among the key products of illegal business, i.e., drug peddling, it is necessary to make sure that the owner of the shop should come up with a decent risk management strategy.
It is crucial to make a reasonable choice between the ability to govern the company’s organization and production processes and minimizing the number of losses that the owner may possibly take in case of a legal, financial, ethical, or any other type of conflict (Rejda and McNamara 56).
Recommendations: What Needs To Be Born in Mind
Whenever one decides to open a shop selling cannabis in the Colorado area, one must make sure that the risk management strategy has been defined properly. Even though Colorado laws define medicinal marijuana, as well as recreational one, as a substance that can be sold legally once the corresponding license is obtained, the process of starting this kind of business is very complicated. It is important to avoid any major issues. Otherwise, the shop may be closed by the local authorities.
Works Cited
Andersson, Mark, Benjamin Hansen, and Daniel I. Rees. “Medical Marijuana Laws, Traffic Fatalities, and Alcohol Consumption.” Journal of Law and Economics. 56.2 (2013), 333-369.
Basis and Purpose – R 103. 2013. Web.
Colorado Department of Revenue. Permanent Rules Related to the Colorado Retail Marijuana Code. 2013. Web.
Feruza, Sattarova Y. and Tao-hoon Kim. “IT Security Review: Privacy, Protection, Access Control, Assurance and System Security.” International Journal of Multimedia and Ubiquitous Engineering 2.2 (2007), 17–31. Print.
Rejda, George E. and Michael J. McNamara. Principles of Risk Management and Insurance (12th ed.). Upper Saddle River, NJ: Pearson. 2014. Print.
Salimath, Manjula S. and Raymond J. Jones. “Scientific Entrepreneurial Management: Bricolage, Bootstrapping, and the Quest for Efficiencies.” Journal of Business and Management 12.1 (2011), 85–104. Print.
Svrakic, Dragan M. “Legalization, Decriminalization & Medicinal Use of Cannabis: A Scientific and Public Health Perspective.” Missouri Medicine 109.2 (2012), 90–98. Print.