weGrow Phoenix will be holding a Dispensary Permits Seminar on May 16th from 12:00 – 3:00 PM. This complimentary seminar will cover more information on the financial aspects of owning a dispensary as well as the legalities and process of applying for a dispensary permit.  The seminar will feature Ryan Hurley of Rose Law Group and Dhar Mann the founder and CEO of weGrow Store.

weGrow Founder and CEO Dhar Mann via MMJ Business Daily:

This is the second column in a three-part series.

Once you have carefully considered the unique challenges involved in opening a medical marijuana dispensary and the various ways to mitigate risk, the next step is to identify the right opportunity.

If you’re looking to capitalize on the “Green Rush” in a state that allows medical marijuana dispensaries, you likely have three choices: 1) invest in (or buy) an existing dispensary; 2) apply for a dispensary permit during an open registration process; or 3) launch a dispensary in a jurisdiction where no moratorium is in place.

Whichever approach applies to your situation, it’s prudent to assess the market opportunity before you start to invest a lot of money. In the second part of this series, I’d like to examine the important factors to consider when assessing the financial opportunity of owning a dispensary.

Before I dive into the details, I’d like to make one point of clarification. I will use the term “financial opportunities” frequently. With the exception of Colorado, each medical marijuana state requires you to be a not-for-profit entity. So the term financial opportunities refers to sales potential, not profit potential.

Artificial Scarcity

Why were dispensaries in Los Angeles, the second most populous city in the U.S., closing doors while a dispensary in Oakland reported tens of millions of dollars in sales? A large contributing factor is scarcity (or, in economic terms, artificial scarcity).

In cities and states where medical marijuana distribution centers are heavily regulated, there’s usually a larger financial opportunity.

Oakland, for instance, placed a moratorium on medical marijuana dispensaries to limit the number to four (although it recently increased this number to eight), effectively legislating an oligopoly. Los Angeles, on the other hand, did not cap the number of dispensaries. As a result, medical marijuana centers sprouted up in L.A. at a rapid pace, and in some cases two or three opened within one city block.

Which city offers the better opportunity? Oakland.

The same principle is at work when taxi medallions in major metropolitan cities sell for hundreds of thousands of dollars: Restricting the number of licenses limits the competition, resulting in a larger economic opportunity.

Read more at Medical Marijuana Business Daily.

weGrow Founder and CEO Dhar Mann via MMJ Business Daily:

This is the first column in a three-part series.

On Jan. 24, 1848, when James W. Marshall found gold in Coloma, California, word spread throughout the broader United States about mining opportunities. The news attracted hundreds of thousands of gold-seekers enticed by the idea of cultivating endless fortunes and establishing a new prosperous livelihood in the Golden State.

The sequence of events is what is commonly referred to as the “Gold Rush.” A similar trend was sparked, albeit unintentionally, in October 2009 when David Ogden, the former deputy attorney general, sent a memo advising U.S. attorneys to “not focus federal resources” on “individuals whose actions are in clear and unambiguous compliance with existing state laws providing for the medical use of marijuana.”

This created what is commonly referred to as the “Green Rush,” where myriad businesses are looking to cash in on the seemingly endless opportunities within the medical marijuana industry.

However, like most of the gold-miners left with only the “rush” rather than the gold, an extremely high majority of businesses that decide to chase after the MMJ industry don’t make any money at all, especially when considering this industry’s unique risk-to-reward factor.

But, if you’re like many people seduced by the buzz of the marijuana industry, no lawyer, family member or angel-on-your shoulder is going to convince you otherwise. And you can indeed make money in this industry – if you approach it the right way.

For those fearless entrepreneurs interested in wholesale marijuana cultivation and/or retail distribution, I’d like to guide you through the process of monetizing marijuana opportunities.

In this column I’ll focus on the first step, which is mitigating risk.

While all investment opportunities carry risk, wholesale marijuana cultivation and retail distribution have a very unique one: criminal prosecution.No entrepreneur should ever begin discussing any medical marijuana opportunity without considering the legal risks at the very beginning of the process.

Even if you’re already determined to enter the medical marijuana business no matter the risks, you must understand the discrepancies between state and federal laws and be aware that all preparations of the cannabis plant (whether recreational or medicinal) are classified under Schedule 1 of the Controlled Substances Act.

Furthermore, you must be cognizant of various risk mitigation methods.

Here are five ways to lower your chances of running into trouble with local, state or federal officials by mitigating risk:

#1. Choose the Right Location – This is probably the most important decision you will make. At any given time there are only a few states even issuing medical marijuana dispensary permits. Obviously you should never open a medical marijuana dispensary, delivery service or grow in a non-medical marijuana state.

In states where there has traditionally been less risk of opening a medical marijuana business, such as California and Colorado, there has been increasing pressure from the federal government. In those two states, U.S. attorneys are targeting dispensaries within 1,000 feet of where children gather, such as public schools, so stay away from these areas even if your state allows you to be closer (in California, for instance, you can set up shop within 600 feet of a school, while in Washington DC it’s 400 feet).

And give preference to states with clearer and less ambiguous (if such a thing exists) state-regulated medical marijuana programs, such as Arizona or New Jersey, rather than states with a very weak centralized structure, such as California. I would suggest choosing a state that has passed medical marijuana through the legislature rather than through a voter referendum.

#2. Focus on Transparency – The federal government also has been targeting businesses that operate under the guise of a non-profit organization but are really multi-million dollar back-door operations. It should go without saying that you should be as above board and as transparent as possible. Don’t blatantly lie on your zoning and business application (“patient care” or “plant nursery” may be acceptable descriptions, but don’t use anything egregious ).

Be honest with your landlord about your intentions. Even though it will make the real estate selection process much more difficult and escalate your rent, it’s much better than investing hundreds of thousands of dollars into a building only to see the landlord try to evict you. Have a tight inventory control system to track all products, whether starter plants or finished cannabis, to prevent diversion. Develop a comprehensive business plan and patient handbook. Track patient purchases and perform constant inventory. Use an experienced security company. Always follow best business practices.

#3. Track Pending Cases and Comply With All Laws – Look into whether there are any significant pending legal cases that can alter medical marijuana policy, such as in Michigan, where the Court of Appeals in August 2011 ruled that the state’s MMJ law does not legalize the sale of marijuana for profit. That court decision left 100,000 patients without medicine and forced hundreds of businesses to shut down overnight.

If in an election year, consider if there are any front-runners that are strongly for or against medical marijuana that can affect your marijuana business. And then weigh how the situation would change if each candidate was elected. At the same time, even if inevitably you will be breaking federal law, make sure you are 100% compliant with every local and state MMJ law and regulation.

Read more at Medical Marijuana Business Daily.

The Franchise Hound:

“weGrow announced last week that they have already sold out the franchise rights to open all stores in Delaware, Arizona, New Mexico, and Washington D.C. The medical marijuana-focused hydroponics superstore has seen great demand for new franchises with over 1,000 applications already received.

There are no plans to open stores where medical marijuana legislation hasn’t already been passed, however Dhar Mann, founder of weGrow, said that rights are being purchased by investors for stores where the legislation is anticipated to pass soon.”

Read more….

Dhar Mann, weGrow founder explains why they decided to press on with the opening of weGrow in Arizona and the impact ( or lack of negative effect ) the opening of weGrow will have with a carefully selected location. See how governor Brewers plans affect the hydroponic superstore franchise.

National hydroponics franchise will mark 21,000 sq. ft store opening with public festival

PHOENIX – May 4, 2011 – New signage on an old Phoenix warehouse is one of the first visible indicators of the billion-dollar medical marijuana industry’s arrival in the Valley of the Sun. weGrow, the marijuana superstore franchise that sells products and services to help patients grow marijuana for medical purposes, is set to open its 21,000 square-foot store in Phoenix on June 1.

Known as the “walmart of weed,” weGrow’s new store will be the largest hydroponics store in Phoenix to date.

Located at 2937 W. Thomas Road (29^th Avenue & Thomas), weGrow does not sell any marijuana itself, just everything cultivators need to grow it. In addition to the largest selection of hydroponic supplies, weGrow features live indoor grow demonstrations with real plants, expert technicians to help customers build professional grow rooms, an on-site medical doctor for patient evaluations and classes on how to safely and responsibly cultivate medical marijuana.

June 1 also marks the date that the Arizona Department of Health Services will accept applications for initial dispensary registration certificates. The billion-dollar industry is expected to see around 100,000 potential patients in Arizona and is approved for 124 dispensaries.

“Many of the 124 dispensary permit winners will have never grown medical marijuana before- where are they supposed to go to learn about safe and responsible marijuana cultivation?” said Dhar Mann, weGrow founder. “The weGrow Phoenix store will be a full-service resource for patients and growers that offers much more than just hydroponics equipment.”

In anticipation of upcoming Arizona dispensaries, last week weGrow issued an RFP for cannabis testing companies interested in opening an on-site laboratory to examine medical marijuana before patient consumption.

The franchise is growing fast as more states legalize cannabis for medicinal use. weGrow currently operates stores in California and has immediate plans to open in Colorado, Oregon, New Jersey and Washington D.C. following the Phoenix opening.

weGrow will hold a press conference featuring industry experts followed by a public grand opening event called “weGrow Phoenix: The Green Rush” on June 1 at the new store. The event is expected to draw a massive crowd and will feature live entertainment, industry suppliers and support businesses, grow demonstrations and much more. Specific event details will be released over the next few weeks.

For more information about weGrow and the grand opening festival, please visit www.wegrowstore.com.

About weGrow

weGrow is the first honest hydroponics store, geared towards selling the materials necessary to grow marijuana for those with medical marijuana needs.  From the largest showroom of hydroponic equipment, to grow training services; weGrow is a one-stop-shop for cultivators. weGrow has several locations nationwide and has plans for continued growth. For more information, please visit www.wegrowstore.com.

###