Dispensaries are risky business in Colorado Springs

~Zen~ · Oct 25, 2010

It seems EVERYONE wants to open a dispensary and get rich. Or so it seems anyway in Colorado Springs where there is quite an assortment of shops to choose from.

Corey Puglisi saw immediate business potential when he started visiting medical marijuana dispensaries for his glaucoma. Customers seemed to be steady, and the cash register always seemed to be ringing.

He wanted in.

“First things first, I wanted the money,” he said. “That’s the same with any business.”

He was one of many would-be entrepreneurs who hoped to start a medical marijuana dispensary in Colorado Springs before a state-wide moratorium started this summer.

But his business, like others, didn’t get much further than the dreaming stage.
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This article in the Colorado Springs Gazette goes on to state:

Other medical marijuana businesses have already gone under.

Tanya Garduno, director of the Colorado Springs Medical Cannabis Council, said she knows of 12 dispensaries that have gone out of business in the past two months.

City sales tax licenses indicate that the number could be higher. Through the end of June, the city had 230 medical marijuana related-businesses with active sales tax licenses. At the end of September, that number had dropped to 188. In unincorporated El Paso County, there are 17 dispensaries with land-use permits. (Click here for a map of local dispensaries.)

“People who jumped in thinking ‘If I just open my doors, I’ll be OK,’ are finding out that they made a mistake,” Garduno said. “Patients have little tolerance for bad medicine or bad customer service. They know there is always a better place they can go.”

Even some places that are running a sound business are having a tough time, she said.

There’s a lot of competition, and changing regulations mean dispensary owners are having to spend money to stay in compliance.

“I haven’t spoken to any center owner who has even come close to turning a profit,” she said.
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The fellow who dreamed of opening his own cash-cow was disappointed with the reality of doing business.

Puglisi thought he was ready to be a dispensary owner. He hired a lawyer to help him start a business and make sure he was following the laws. Puglisi searched for a place to rent and started taking classes on growing marijuana.

But finding a place to lease was tough. Then, the potential costs started to climb. At first, he thought he could open a dispensary on $20,000. But when he learned of the costs for taxes, fees and equipment, his calculation got him closer to about $50,000 to stay in business for the first year. He had a way to get the money, but then he started learning more about the changing laws and regulations.

“In the end, I decided to wait,” he said. “I want to let them iron out all of the laws so when I put my foot into it, I’ll have a steady beam to stand on.”
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Only the strongest will survive in this environment of extreme competitiveness.

The Colorado Springs Medical Cannabis Council estimates there are 12,000- 15,000 medical marijuana patients in Colorado Springs. Assuming that number is on the high end, that would equate to fewer than 90 patients per dispensary.

That’s probably not enough customers to support the number of dispensaries in Colorado Springs. Dispensaries report that it takes about 250 to 350 patients to stay in business, said Elizabeth Robinson, president, founder and CEO of Grow Room Communications , a Denver public relations firm targeting the medical marijuana industry launched last month.

“In the end, only the strong will survive,” Robinson said. “Those are the dispensaries that will overpower and beat out the little shops.”
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Read more about the goings on in Colorado, and the Springs area here.

Ryanchapwood · Sep 2, 2011

I heard some ppl with med licences are doing business outta their own home, less laws cuz if u have a licecne urself, u can sell to other users with no problems. Also i live in a tiny town so no law interfers with than as long as rules are followed. just my opinion

unfocusedanakin · Sep 2, 2011

Ryanchapwood said:

I heard some ppl with med licences are doing business outta their own home, less laws cuz if u have a licecne urself, u can sell to other users with no problems. Also i live in a tiny town so no law interfers with than as long as rules are followed. just my opinion
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It's much cheaper on the black market then the dispensary, the problem is they need to catch up. No one is going to pay 55 plus tax for an 1/8 anymore, not in Colorado. Add in the fact that dealers don't care if you even have a card.

Ryanchapwood · Sep 4, 2011

sounds like you guys need to check out the small towns in the countrysides. i can get 1/8 for 40 bux

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Dispensaries are risky business in Colorado Springs

~Zen~ California Tripper Administrator

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Dispensaries are risky business in Colorado Springs

~Zen~ California Tripper Administrator

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unfocusedanakin The Archaic Revival Lifetime Supporter

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