At the time of this writing, the state of Utah had licensed fourteen medical cannabis dispensaries. Only eight had opened; the remaining six were required by the conditions of their licenses to be open by June 1, 2021. Bear in mind that all of the license holders were granted their licenses more than a year ago. Why have so many not opened?
Utah is not alone in facing these sorts of issues. Similar stories are told in other states. Entities interested in opening medical marijuana dispensaries get their licenses but then have trouble moving forward. In most cases, they discover that running a dispensary is not as easy as it might have seemed.
Obtaining Banking Services
One of the first things business owners discover is that it is not easy to obtain banking services when you are involved in the cannabis industry. Banks, credit unions, payment processes, et al just don’t want to get involved. They know that marijuana remains a Schedule I controlled substance at the federal level. They don’t want to risk DC’s wrath by providing banking services to what is technically an illegal business.
This leaves dispensary owners in the position of having to establish cash-only operations. While that may not seem like a big deal to someone who has never operated a retail business before, operating on a cash-only basis is not optimal. It limits your customer base, exposes you to a greater risk of theft, and makes it much more difficult to pay your own bills.
Fortunately, electronic payment providers are beginning to emerge. If you were to visit Deseret Wellness in Park City, Utah, you could pay for your prescription through an electronic payment company that transfers money directly from your bank account to the pharmacy’s account. It is similar to how a debit card works, except that it doesn’t require the dispensary to interact directly with your bank.
Maintaining Enough Stock
Another big problem for dispensaries is keeping enough stock on the shelves. This is more of a problem in states like Utah, where there is a concerted effort to tightly control the market. Utah has only licensed eight growers so far. Only a small number have managed to consistently get crops to market. Without enough raw material, processors cannot make enough retail products. And without those retail products, dispensaries cannot keep their shelves full.
Maintaining Legal Compliance
Above and beyond basic business functions comes the responsibility of maintaining legal compliance. The stricter state laws are, the more difficult compliance can be. Once again, Utah is one of the strictest medical cannabis states in the union.
Every cannabis pharmacy in the Beehive State must have a certified pharmacist on staff. Patients are required to consult with that pharmacist on their first visit. There are rumors that lawmakers are working on a new provision that would require pharmacists to review every transaction before it is completed.
There are additional requirements related to the state’s database, how products are labeled, the amount of product a dispensary can sell to a patient, and so on. Dispensary owners have to be aware of the rules and follow them to the letter.
In Over Their Heads
There have been rumors in some states that dispensary licenses have been issued as political favors, to business entities that should never have received them. At any rate, the fact that so many licensed dispensaries take so long to open suggests that license holders get in over their heads. They do not realize how difficult it is to operate a dispensary in a way that simultaneously turns a profit and maintains regulatory compliance.
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