Choosing the Best Location for Your Cannabis Retail Store

Choosing the Best Location for Your Cannabis Retail Store

Experts expect cannabis sales to continue growing rapidly over the next few years as more states legalize products containing THC for medicinal and recreational purposes. In 2018, legal cannabis revenues fell somewhere between $8.6 billion and $10 billion. Projections show sales will fall between $25 billion and $30.4 billion in 2023.

The cannabis industry’s growth does not guarantee success for business owners. Cannabis retail stores must pay hefty taxes that cut into their profits. (It doesn’t help that cannabis companies must pay federal taxes even though they cannot access low-interest small business loans supported by the Small Business Loan Association.) The industry has also attracted competitive entrepreneurs determined to create brands that will dominate the market.

Business owners can help ensure success by choosing the best locations for their cannabis retail stores. Finding the perfect place takes a lot of research and insight, but it can pay off in the form of higher revenues, more customers and lower fees.

Research Zoning Laws for Permissible Use

Just because a state has legalized cannabis doesn’t mean that business owners can open retail stores anywhere they want.

California offers an excellent example of the limitations that counties and neighborhoods can put on cannabis retail stores. Cannabis laws in Los Angeles County say that companies can open businesses for cultivation, manufacturing and retail. Ventura and Orange Counties, however, ban all of these activities.

Business owners can start narrowing their location options by eliminating properties in countries and communities that ban cannabis sales. A corner retail store in Orange County might look like the perfect place for a thriving dispensary. Unfortunately, county law prevents anyone from selling any cannabis products for recreational purposes.

Are Cannabis Licenses Available?

Many areas have a limited number of cannabis licenses that they will allow at one time. This approach helps existing cannabis stores thrive while making it impossible for streets to turn into “pot zones” that may discourage other businesses.

Potential business owners need to find out how many licenses are available in an area. Without an available license, no one can open a cannabis store in the community.

Estimate Foot Traffic That Will Bring in More Customers

Foot traffic can play a critical role in the success of any retail store. When a street or shopping center gets a lot of foot traffic, stores can expect people to come in out of curiosity or convenience. A person might not have even thought about purchasing a cannabis product today. When they walk by an attractive store, though, they think about how they don’t have any edibles at home. They don’t plan to enjoy them until the weekend, but this seems like a convenient time to buy.

Several tools can help business owners estimate foot traffic before they lease or purchase storefront properties. Useful tools include:

Owners should pay attention to more than the number of people walking by the storefront. Demographics matter, too. How many people are likely to enter the store, explore merchandise and spend money on products? Knowing more about the store’s target demographic can help business owners estimate the true value of foot traffic.

Estimate Vehicular Traffic

The amount of vehicular traffic can also play an essential role in how many people visit a cannabis retail store. Ideally, entrepreneurs should look for locations on busy—but not overly congested—streets. Frequent traffic jams could prevent people from driving to the store. A location on a busy street, however, will get more attention from drivers.

What counts as “congested” in one city may not seem problematic elsewhere. For example, drivers in Los Angeles might tolerate heavy traffic better than those in Portland, OR. The attitude of nearby residents should play a role in the decision.

Consider Whether the Store Has a Good Place for Advertising

Storefronts located on busy streets need ways to stand out from other businesses. A cannabis retail store in the middle of a shopping center might not get noticed by many drivers. On-site advertising could solve that problem, but it costs money.

Before acquiring storefronts on popular streets, business owners need to consider:

  • Local regulations that will influence on-site advertising, such as limiting the height of a sign.
  • Whether commuters can see the store from the street.
  • How much it would cost to install a small billboard that attracts attention from the road.
  • The regulations and costs of promoting the store with neon signs and similar on-site advertisements.

Depending on advertising options and costs, it may not make sense to choose cannabis retail store locations that seem like excellent opportunities at first.

Look for a Cannabis Retail Store With Ample Parking

The average American drives nearly 13,500 miles per year. The number of miles driven varies significantly by state. Regardless, it’s obvious that most Americans prefer to drive than walk. Given this preference, it makes sense for cannabis retail store owners to find locations with ample parking.

Population density will play a role in how much parking a store needs. A city with a lot of residential buildings near downtown might not need much parking. A store in the suburbs, however, will need a parking spot for every customer. When shoppers discover that they cannot find easy parking, they might decide to frequent another cannabis store. As long as they can purchase the products they want, they don’t care where they shop.

For drivers, it’s more convenient to choose a storefront connected to a large parking lot. Many of them do not want to pay for street parking or parking garages. Depending on the area, a filled parking lot could mean a long walk between parking a car and visiting the store.

Think About Security the Cannabis Retail Store Will Need

Cannabis retail stores need to take security seriously. Criminals would love to target cannabis stores that have millions of dollars in products and plenty of cash on hand. An excellent security system that prevents people from entering or leaving the retail area without permission certainly helps. Avoiding the possibility of successful burglaries, though, makes the store even more secure.

Business owners should look at the amount of criminal activity in an area before spending money on retail space. A low-crime area will not bring in as many thieves. Plus, customers will feel more comfortable coming to and leaving the store with cannabis products.

A secure storefront should also have physical barriers that make theft more difficult. Ideally, the store shouldn’t share doors with other businesses. It should have as few entrances and exits as possible (including windows). All windows and doors should be made of a heavy material that criminals cannot smash or cut.


Businesses can make a lot of money by entering the cannabis industry. Finding the best location for a cannabis retail store is one of the steps people should make when developing their business plans.

Use to find cannabis retail businesses for sale, cannabis retail locations for sale, and cannabis retail locations for lease.

February 24, 2021Comments Off

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