Escamilla isn’t alone in seeing the opportunity represented by Arizona’s coming dispensaries. For example, Bruce Bedrick, a Phoenix chiropractor, is already marketing a dispensing system.
Once the state’s regulations are in place, many entrepreneurs will likely want to get in on the beginning of what some call a sure high-growth industry.
Arizona voters narrowly passed Proposition 203 last November. The new law will allow qualifying patients with certain debilitating medical conditions buy up to 2.5 ounces of marijuana every two weeks from dispensaries, or grow up to 12 cannabis plants if they live 25 miles or farther from the nearest dispensary.
The Arizona Department of Health Services is now reviewing more than a thousand comments on the proposed medical marijuana rules. A new draft of the rules is expected by the end of the month, followed by a second comment period. Final rules are expected in March.
Those who attend his classes are “flat-out entrepreneurs,” according to Escamilla, who see the industry as more than just growing and selling marijuana. For example, insurance brokers who sell medical marijuana insurance, real estate agents who lease or sell dispensary space, and security people employed by pot shops have attended his program, he said.
“There’s a lot of outside interest just from those who are more entrepreneurial,” Escamilla said. “There’s a lot of people that kind of see it as a savior from a business perspective.”
Starting up a pot dispensary is much like launching other businesses, according to Gerry Keim, a professor of entrepreneurship at the W.P. Carey School of Business at Arizona State University. There’s learning how to cater to customers, measuring the competition and building relationships with suppliers.
“But this is one where you have uncertainty about the future of the rules of the game,” Keim said. “They will be emerging.”
Those able to land a spot in the market early may be better able to influence legislators and regulators, Keim said. “It’s the classic high-risk, potentially high-return situation,” he said.
Bedrick, the Phoenix chiropractor mentioned earlier, has held local seminars to inform others about medical marijuana permitting and how to properly run a dispensary.
He is marketing what he said was the most technologically advanced solution to get marijuana to patients: A medical dispensing system that looks like an ATM and could be run from a business office. The system is called the Medbox.
Bedrick said his system was the most affordable way for entrepreneurs because it requires as little as $25,000 to get into an investment pool.
“We are the most compliant, most fraud free, safest and most lean business model,” Bedrick claimed, predicting there will be more security and regulations as rules develop.
Bedrick said his licensed technology was devised after regulatory problems plagued California.
“The best way to be compliant is to take human error out of it,” he said, adding that his machines offer video security and biometric scanning if necessary. The Medbox machines take cards, so patients don’t have to pay cash for medicine.
Software that will meet state requirements for a real-time database would be able to shut down dispensing to patients with expired medical marijuana ID cards, or those who already bought their supply, Bedrick said.
“Our technology and software does that whole job for the state,” Bedrick said. “Whatever system Arizona creates, we will seamlessly integrate with that.”
According to trainer Escamilla, traditional sources of funding for startups are hard to come by in the marijuana business. “People either self-fund or they put together business plans and attract friends and family to fund their startups,” he said.
Greenway University has lawyers, CPAs and dispensary owners speak at seminars. Escamilla suggests that future pot shop owners hire a good attorney and an accountant.
“It’s more for business transaction and formation as opposed to criminal defense, which, for most people, that’s their first thought process,” Escamilla said.
Finding landlords who agree to host a dispensary can also be a challenge, Escamilla said. But if you follow the rules, he said it’s possible for some owners with several dispensaries to earn seven figures annually.
Startup costs run from $25,000 to $500,000, according to Escamilla, who expects annual license fees to be about the same as Colorado’s: $7,500 for less than 300 patients, $12,500 for 300-500 patients and $17,500 for more than 500 patients.
Escamilla stressed professionalism as a way of winning over communities. “We express to the student base it’s a professional environment, that we have to be mindful of the neighbors, the communities that we live in, and to tailor your marketing in such a way that it’s tasteful,” he said. “It’s an approach where you want to have a 42-year-old mother of two be able to come to your facility and use this as an alternative form of medicine.”
One of the ways to make people more comfortable with marijuana, he said, is to educate them that medical cannabis does not have to be smoked. He emphasized that patients can get their medication through edibles, sodas, ice creams and through vaporization, which eliminates toxins associated with smoke by heating the cannabis to form a mist.