Are you about starting a marijuana café business? If YES, here is a complete sample marijuana café business plan template & feasibility report you can use for FREE.
Okay, so we have considered all the requirements for starting a marijuana café business. We also took it further by analyzing and drafting a sample marijuana café marketing plan template backed up by actionable guerrilla marketing ideas for marijuana cafés. So let’s proceed to the business planning section.
If you are conversant with the trends in the united states especially as it relates to legislation of substance consumption, you will agree that cannabis or marijuana is being legalized across most states hence opening doors for new businesses along the cannabis business value chain.
One of the very green and promising businesses an aspiring entrepreneur that has eyes for the future should consider starting is a marijuana café. This business is just kicking off especially in the state of California and the patronage is out of this world.
Before you open a marijuana café, you need to first look at the existing laws in the country or state you reside in. Although marijuana is still very much prohibited in most countries and even in some states in the United States, some states still allows it as an alternative source of medicine and leisure.
So, if you are interested in starting your own marijuana café business, then you need to talk to a lawyer to know if it is allowed in your area and the limit that is expected of you. The medical marijuana café business generates huge profits especially when you are in the right location.
You can’t just put a ceiling on the profits you can make when you open this business. Below is a sample marijuana café business plan template that can help you to successfully write your own with little or no difficulty.
A Sample Marijuana Cafe Business Plan Template
1. Industry Overview
Marijuana café is an establishment where patrons visit to purchase and consume cannabis in different forms especially for leisure. Businesses in this industry usually sell marijuana edibles and also provide limited food and alcohol services as a means of increasing their revenue generation.
Despite the fact that marijuana is legal in two-thirds of the states in the US, there are few places where people are legally allowed to consume marijuana publicly. In the United States, several states do not yet allow marijuana to be purchased and consumed in the same location. Most prohibit marijuana consumption in public, relegating it instead to private residences or clubs.
In Las Vegas, for example, it is illegal to consume marijuana anywhere on the Strip, whether in a hotel room, bar or casino, even though cannabis is legal for medical and recreational use in Nevada. Seattle is dealing with a similar problem — it is legal to buy marijuana but legally complicated to smoke it unless you own your own home.
In 2018 in the United States of America, it became legal to sell and distribute marijuana through a regulated business in the state and recently, in 2019, new regulations for marijuana businesses were passed, with strong restrictions on selling and advertising to anyone under 21.
According to CBS News polling, there are currently more than 10,000 licensed cannabis operators in California, making it the largest cannabis market in the country, according to the state’s cannabis portal. Recreational use of marijuana has been legalized in nearly a dozen states, and 65 percent of Americans now think it should be legal — a record high.
In order to invest wisely, you need to carry out a research on the industry or line of business you intend investing in. Researching will open you up to the various opportunities you can leverage on and how you can access them. It’s not compulsory that you must be the one to carry out the research; you can pay professionals to help you out.
Any entrepreneur who wants to start a marijuana café business in the US would definitely be confronted with tough legislation, which is why you must get your facts and figures first, then look out for the required licenses and permits before opening your marijuana café.
2. Executive Summary
Melting Bot® Marijuana Café, LLC is a neighborhood – hybrid weed lounge and restaurant where patrons can order up some weed along with their meal. It will be located on the ground floor of one of the busiest campus communities in the United States of America.
We have been able to secure a one-year lease of a vacant shop within the campus facility. We are fortunate to secure a facility with an option of renewal for 5 years at a rate that is favorable to us.
We are going to be involved in the sale of fresh and dried marijuana, marijuana edibles, sale of other tobacco products, food, assorted red and white wines, beer and liquor, distilled spirits, and martinis to patrons in a conducive environment that is specifically designed for socializing and networking.
Melting Bot® Marijuana Café, LLC is designed to meet both the health and safety standards as recommended by the local authority.
Our customers are going to be treated to good music at all times. We have made provisions for live band, karaoke, country side music and jazz et al. This will be played at the background to create the ambience that our customers will cherish. We look to embrace the intellectual stimulation linked to marijuana.
We are in business to make profits and at the same time to give our customers value for their money; we want to give people the opportunity to legally and freely consume marijuana. Melting Bot® Marijuana Café, LLC will make available most of the marijuana brands produced in the United States of America and in other parts of the world especially in countries like Cuba, Mexico and Africa.
We are aware that marijuana cafés easily attract intellectuals and business people and we know that the campus community is one of the places where we can easily tie down these people. No one under the age of 21 is allowed inside, even if they have a medical marijuana card, and the cafe encourages patrons to act as if they are going to a normal bar. That means no driving home under the influence of marijuana.
We will ensure that all our employees are selected from a pool of qualified and customer centric people in and around Los Angeles – California. We will make sure that we take all the members of our workforce through the required training that will position them to meet the expectation of the company.
Melting Bot® Marijuana Café, LLC is owned by Malcom Josh and his immediate family members. Malcom Josh has managed several cigar lounges, smoke shops, bars and nightclubs in Los Angeles and Las Vegas prior to opening his own marijuana café. He has the magic wand to run the business to profitability.
3. Our Products and Services
Melting Bot® Marijuana Café, LLC is going to operate a standard marijuana café in the University of California – Los Angeles. These are some of our product and service offerings;
- Fresh and dried marijuana
- Cannabis-infused baked goods such as hash cookies, pot brownies, and space cakes
- Cannabis-infused drink
- Capsule containing THC or CBD (that is not sold as a regulated pharmaceutical is also considered an edible and provides the same effect as food and drink)
- Cannabis tincture (It is an alcoholic extract of cannabis)
- Cannabis oil (It is a product based in cooking oil that has been infused with cannabinoids by mixing cannabis with the heated oil).
- Cannabis-infused butter, or cannabutter, (It is a cannabis-infused ingredient used in many cannabis edibles).
- Tobacco, food and drinks
4. Our Mission and Vision Statement
- Our vision is to establish a standard and secured marijuana – friendly smoking environment, in Los Angeles – California that will be the melting pot of all lovers of marijuana, shisha, cigars, tobaccos, wine, alcoholic and non – alcoholic drinks.
- Our mission is to establish a marijuana café business where our highly esteemed customers can legally engage in smoking, vaping and eating cannabis in any form and at every given time and a place where people can network and socialize. We are on a mission to embrace the intellectual stimulation linked to marijuana.
Our Business Structure
Melting Bot® Marijuana Café, LLC is established to be a pacesetter when it comes to how standard marijuana café should be run in Los Angeles and even in the United States of America.
We have the goal of assembling a team of dedicated workforce who will give our customers excellent customer service at all times, a team that will ensure that we will continue to have repeated customers and a team that will indeed make us the melting pot for marijuana patrons and socialites in Los Angeles.
We will work hard to attract people with the right mindset to help us achieve our business goals and objectives. Below is the business structure that we will build Melting Bot® Marijuana Café, LLC;
- Chief Executive Officer (Owner)
- Marijuana café Manager
- Bartender / Baristas
- Accountants / Cashiers
- DJ
- Greeters / Customer Service Agent / Table Attendant
- Cleaners
- Security Officers
5. Job Roles and Responsibilities
Chief Executive Officer – CEO:
- Increases management’s effectiveness by recruiting, selecting, orienting, training, coaching, counseling, and disciplining managers; communicating values, strategies, and objectives; assigning accountabilities; planning, monitoring, and appraising job results
- Creating, communicating, and implementing the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
- Responsible for fixing prices and signing business deals
- Responsible for providing direction for the business
- Creating, communicating, and implementing the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
- Responsible for signing checks and documents on behalf of the company
- Evaluates the success of the organization
- Carrying out induction for new team members
Marijuana Café Manager:
- Responsible for managing the daily activities in the café
- Ensure that the facility is in tip top shape and conducive enough to welcome customers
- Interfaces with vendors
- Reports to the Chief Executive Officer
- Attends to customers complains and enquiries
- Prepares budget and reports for the organization
- Responsible for Training and Development in the organization
- Responsible for procuring of supplies and equipment
- Handle any other duty as assigned by the CEO
Bartender/Baristas:
- Plan and present bar menu to clients
- Check identification of guests to make sure they meet age requirements for the purchase of marijuana, alcohol and tobacco products.
- Mix drinks, cocktails and other bar beverages as ordered and in compliance with standard drink recipes.
- Prepare alcohol or non-alcohol beverages.
- Service wine and beer to guests.
- Arrange bottles and glasses to make attractive displays.
- Assess customers’ needs and preferences and make recommendations
- Make lists of supplies in conjunction with the marijuana café manager / management
- Prepare inventory or purchase requisitions as needed to replenish supplies.
Accountant/Cashier:
- Responsible for preparing financial reports, budgets, and financial statements for the organization
- Provides managements with financial analyses, development budgets, and accounting reports
- Responsible for financial forecasting and risks analysis.
- Performs cash management, general ledger accounting, and financial reporting for one or more properties.
- Responsible for developing and managing financial systems and policies
- Responsible for administering payrolls
- Ensuring compliance with taxation legislation
- Handles all financial transactions for the company
- Serves as internal auditor for the company.
Disc Jockey (DJ)
- Ensures that customers are entertained with the best of music per time
- Manage the sound system for the café
- In charge of music collections
- Responsible for developing music playlists.
Greeters/Customer Service Agent/Table Attendant
- Open doors and welcome customers
- Ensures that customers feel relaxed and at home
- Handle customers enquiries
- Assess customers’ needs and preferences and make recommendations
- Serve customers in a friendly and helpful manner.
- Determine when a customer has had too much marijuana and alcohol and if required refusing any further serving on a polite way.
- Demonstrate a thorough knowledge of marijuana and alcoholic products, menus and Promotions
- Handle any other duty as assigned by the café manager
Cleaners:
- Clean up after customers
- Clear ashtrays as and when required.
- Wash glassware and utensils after each use.
- Maintain a clean working area by sweeping, vacuuming, dusting, cleaning of glass doors and windows, etc. if required.
- Ensure that toiletries and supplies don’t run out of stock
- Handle any other duty as assigned by the café manager.
Security Officers
- Ensure that the marijuana café facility is secured at all times
- Control traffic and organize parking
- Give security tips to staff members
- Patrols around the building on a 24 hours basis
- Any other duty as assigned by the smoke shop manager
6. SWOT Analysis
Melting Bot® Marijuana Café, LLC is established with the aim of becoming the melting point for socialites in Los Angles which is why we have taken our time to critically analyze and conduct SWOT analysis to be able to identify areas we need to work on if indeed we want to achieve our business goal.
In view of that, Melting Bot® Marijuana Café, LLC hired a HR specialist to help her conduct SWOT analysis for the business and below is a summary of the result that was generated;
- Strength:
Our strengths as a company are, excellent and detailed customer service, a wide range of assorted marijuana, tobaccos, and alcoholic drinks both from the United States and other parts of the world. Excellent facility, excellent ambiance and perfect location for a marijuana café.
- Weakness:
Our perceived weakness could be that we are new business, and we may not have the financial muscle to sustain the kind of publicity we want to give our business.
- Opportunities:
As marijuana becomes more widely used, consumers are going to want public places to consume it — just like alcohol, hence opening vast opportunities for a business such as ours. There are unlimited business opportunities available to marijuana café businesses in busy communities like University of California – Los Angeles; Los Angeles is one of the cities in the world where social life is at its peak.
Besides, the campus facility where our marijuana café is located is one of the busiest in the United States and it is open to loads of opportunities due to the influx of international students and the fact that there are currently more than 10,000 licensed cannabis operators in California, making it the largest cannabis market in the country.
- Threat:
Because there are no federal standards when it comes to regulating marijuana usage and consumption, all the various states and localities that have legalized cannabis are coming up with their own rules and regulations hence posing a threat to us. Another threat that may likely confront us is the arrival of a new marijuana café in same facility or within same location where our target market exists and who may want to adopt same Business model like us.
7. MARKET ANALYSIS
- Market Trends
A large number of Americans view marijuana as less harmful than alcohol and believe it is less dangerous than other drugs. Many opponents of legalization, however, think it leads to a rise in crime and favor the federal government taking action to stop the sale of pot in states that allow it.
Marijuana was decriminalized in California in 2016. The passage of the Adult Use of Marijuana Act allowed anyone 21 years of age or older to legally grow, possess, and use cannabis for non-medicinal purposes, with certain restrictions.
A close observation of the trends in the industry shows that marijuana use has increased dramatically among American and European youths because of the social atmosphere it creates, and because many young adults believe marijuana is a safer alternative to cigarette smoking.
Most marijuana cafés in the United States have a chic or ultramodern element such as glass tables, plasma televisions, and oxygen bars et al.
The Marijuana cafés cum Cigar Lounges industry will continue to improvise on ways to increase sales. They seek to remove the association of marijuana with high – end clientele and overwhelming cannabis-infused drink and food lists and replace it with a more casual and relaxing atmosphere.
Many of these marijuana cafés are furnished with nooks and cozy booths encased in rich colors and plush surroundings in hopes their guests will linger. Marijuana cafés look to embrace the intellectual stimulation linked to marijuana. The phlegmatic environment lends itself to a good social setting with a less crowded feel and more intimate appeal.
Going forward it will be the norm for marijuana cafés to incorporate a larger variety of alcoholic drinks and food choices as part of their product offerings. It is obvious that adding these product offerings help in creating an alternate source revenue.
8. Our Target Market
Before starting our marijuana café business in Los Angeles – California, we conducted a market survey and feasibility studies and we are certain that there is a wide range of people who would patronize our marijuana café on a regular basis.
In view of that, we have created strategies that will enable us reach out to various people who are likely going to become our loyal customers. Below are our target markets;
- Corporate Executives
- Politicians
- Celebrities
- Taxi Drivers
- Socialites
- Business People
- Sports Men and Women
- Government Officials
- College Students
- Tourists
Our Competitive Advantage
Part of what is going to be our selling point is the fact that we operate a standard and health compliance marijuana café, in a perfect location (one of the busiest campus facilities in University of California – Los Angeles, the United States) for the kind of business that we run and also the fact that our marijuana café facility is highly secured.
Another factor that will give Melting Bot® Marijuana Café, LLC competitive edge is that we have enough packing space for our customers. We are not ruling out the fact that we have a dedicated and customer centric workforce that are willing to give our customers full value for their money and time.
We are among the very few neighborhood marijuana cafés in Los Angeles that sells marijuana in almost all the form that is available, and that will surely count towards our advantage in the market place. Also the robust experience of our CEO and the café manager is also a positive for Melting Bot® Marijuana Café, LLC.
Lastly, our employees will be well taken care of, and their welfare package will be among the best within our category in the industry meaning that they will be more than willing to build the business with us and help deliver our set goals and objectives.
9. SALES AND MARKETING STRATEGY
- Marketing Strategy and Sales Strategy
Top of the list on our marketing and sale strategy is generating a buzz for our marijuana café via word-of-mouth and leveraging on roadshows around the UCL campus community. Despite the fact that our first outlet is located inside University of California Los Angeles, the model of marijuana café we intend running is a neighborhood café hence we are not going to rely only on the conventional ways of marketing.
We don’t have plans to run paid adverts on Local TV and radio stations or even newspapers but we will sure maximize every other available means to promote our business. Parts of the marketing and sales strategies that we will adopt are;
- Open our marijuana café in a grand style with a party for all.
- Ensure that we have a wide range of marijuana, food and drinks at all times.
- Make use of attractive hand bills to create awareness and also to give direction to our café
- Position our signage / flexi banners at strategic places
- Position our greeters to welcome and direct potential customers
- Create a loyalty plan that will enable us reward our regular customers
- Engage on roadshows within our neighborhood to create awareness for our marijuana café.
Sources of Income
Melting Bot® Marijuana Café, LLC is established with the aim of maximizing profits in the marijuana café industry and we are going to ensure that we do all it takes to attract our target market. The sources of income for Melting Bot® Marijuana Café, LLC are stated below;
- Fresh and dried marijuana
- Cannabis-infused baked goods such as hash cookies, pot brownies, and space cakes
- Cannabis-infused drink
- Capsule containing THC or CBD (that is not sold as a regulated pharmaceutical is also considered an edible and provides the same effect as food and drink)
- Cannabis tincture (It is an alcoholic extract of cannabis)
- Cannabis oil (It is a product based in cooking oil that has been infused with cannabinoids by mixing cannabis with the heated oil).
- Cannabis-infused butter, or cannabutter, (It is a cannabis-infused ingredient used in many cannabis edibles).
- Tobacco, food and drinks
10. Sales Forecast
One thing is certain when it comes to marijuana café business, if your marijuana café is cozy, relaxing, well stocked and centrally positioned, you will always attract customers that will sure translate to increase in revenue generation for the business.
We are well positioned to take on the available market in Los Angeles California and we are quite optimistic that we will meet our set target of generating enough income/profits from our first six months of operation and grow the business and our clientele base.
We have been able to examine the marijuana café market, we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. Below are the sales projections for Melting Bot® Marijuana Café, LLC, it is based on the location of our business and other factors as it relates to marijuana cafés startups in the United States;
- First Fiscal Year (FY1): $240,000
- Second Fiscal Year: $500,000
- Third Fiscal Year: $750,000
N.B: This projection was done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown and there won’t be any major competitor offering same products as we do within same location. Please note that the above projection might be lower and at the same time it might be higher.
11. Publicity and Advertising Strategy
Melting Bot® Marijuana Café, LLC is a campus marijuana café and we will ensure that we create the buzz that will make people in our area know about us and what we do. We are quite aware that one of the ways of promoting our marijuana café is to create special internal promotions which in turn will help us achieve our aim of leveraging on word of mouth publicity.
Here are the platforms we intend leveraging on to promote and advertise Melting Bot® Marijuana Café, LLC;
- Encourage the use of word of mouth publicity from our loyal customers
- Leverage on the internet and social media platforms like; YouTube, Instagram, Facebook, Twitter, LinkedIn, Snapchat, Google+ and other platforms (music online forums) to promote our business.
- Ensure that our we position our banners and billboards in strategic positions all around Los Angeles – CA
- Distribute our fliers and handbills in target areas in and around our neighborhood
- Advertise our marijuana café business in our official website and employ strategies that will help us pull traffic to the site
- Brand all our official cars and vans and ensure that all our staff members wear our branded shirt or cap at regular intervals.
12. Our Pricing Strategy
The prices of our marijuana, food and other alcoholic drinks et al will be what is obtainable in the market. In fact, we will try as much as we can to sell below the industry’s average so as to attract loads of customers. We also have plans in place to discount our products once in a while and also to reward our loyal customers.
- Payment Options
The payment policy adopted by Melting Bot® Marijuana Café, LLC is all inclusive because we are quite aware that different customers prefer different payment options as it suits them but at the same time, we will ensure that we abide by the financial rules and regulation of the United States of America.
Here are the payment options that Melting Bot® Marijuana Café, LLC will make available to her clients;
- Payment with cash
- Payment via credit cards / Point of Sale Machines (POS Machines)
- Payment via online bank transfer
- Payment via check
- Payment via mobile money transfer
In view of the above, we have chosen banking platforms that will enable our clients make payment for our products without any stress on their part. Our bank account numbers will be made available on our website and promotional materials.
13. Startup Expenditure (Budget)
When it comes to starting a marijuana café business, the major areas that you should look towards spending the bulk of your cash is renting or leasing a facility and equipping the facility. Aside from that, you are not expected to spend much except for paying of your employees, securing the needed permits and licenses and the purchase of supplies.
This is what it would cost us to start Melting Bot® Marijuana Café, LLC in the United of America;
- The total fee for registering the business in Los Angeles, CA – $750.
- Legal expenses for obtaining licenses and permits as well as the accounting services totaling – $1,200.
- Marketing promotion expenses (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
- The cost for hiring a business consultant – $5,000.
- Insurance (general liability, workers’ compensation and property casualty) coverage at a total premium – $5,400.
- The cost of accounting software, CRM software and Payroll Software – $15,000
- The cost for payment of rent for 12 months at $1.76 per square feet in the total amount of – $105,600.
- The cost for facility remodeling – $25,000.
- Other start-up expenses including stationery – $500
- Phone and utility deposits – ($2,500)
- Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $60,000
- The cost for start-up inventory (fresh and dried marijuana, cannabis-infused drink and food and alcoholic drinks and non-alcoholic drinks) – $20,027
- Storage hardware (bins, utensil rack, shelves, glass case) – $5,720
- The cost for counter area equipment (counter top, sink, ice machine, etc.) – $9,500
- The cost for serving area equipment (glasses, flatware) – $5,000
- The cost for store equipment (cash register, security, ventilation, signage) – $13,750
- The cost for the purchase of furniture and gadgets (Computers, Printers, Telephone, TVs, Sound System, tables and chairs et al) – $14,000.
- The cost of launching a website – $600
- The cost for our grand opening party – $15,000
- Miscellaneous – $5,500
We would need an estimate of $250,000 to successfully launch our marijuana café in downtown Los Angeles, CA.
Generating Funds/Startup Capital for Melting Bot® Marijuana Café, LLC
Melting Bot® Marijuana Café, LLC is a private business that is owned by Malcom Josh and his immediate family members and they intend to finance the business alone. Although they have plans to make the marijuana café manager part owner of the business after 5 or 7 years of services, but that does not stop him from reserving over 80 percent stake of the business for himself and his family.
Since they are the sole financiers of the business, they have decided to adopt the following means to generate startup capital for the business;
- Generate part of the startup capital from his personal savings and sale of his stocks
- Source for soft loans from family members and friends
- Apply for loan from the banks
N.B: Malcom Josh and his family have been able to generate $100,000. The breakdown shows that they generated $75,000 from their personal savings and sale of their stocks, and they generated $25,000 soft loans from their family members and friends. The balance of $150,000 will be generated as loan facility from the bank.
14. Sustainability and Expansion Strategy
The future of a business lies in the number of loyal customers that they have, the capacity and competence of their employees, their investment strategy and business structure. If all of these factors are missing from a business, then it won’t be too long before the business close shop.
One of our major goals of starting Melting Bot® Marijuana Café, LLC is to build a business that will survive off its own cash flow without injecting finance from external sources once the business is officially running. We know that one of the ways of gaining approval and winning customers over is to properly position our marijuana café, ensure adequate security, availability of fresh and dried marijuana and various brand of cannabis-infused drink and food and excellent customer service.
Melting Bot® Marijuana Café, LLC will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of. Our company’s corporate culture is designed to drive our business to greater heights and training and retraining of our workforce is at the top burner.
As a matter of fact, profit-sharing arrangement will be made available to all our management staff and it will be based on their performance for a period of three years or more. We know that if that is put in place, we will be able to hire and retain the best hands we can get in the industry, and they will be more committed to help us build the business of our dreams.
Check List/Milestone
- Business Name Availability Check: Completed
- Business Registration: Completed
- Opening of Corporate Bank Accounts: Completed
- Securing Point of Sales (POS) Machines: Completed
- Opening Mobile Money Accounts: Completed
- Opening Online Payment Platforms: Completed
- Application and Obtaining Tax Payer’s ID: In Progress
- Application for business license and permit: Completed
- Purchase of Insurance for the Business: Completed
- Renting of facility and remodeling the facility: In Progress
- Conducting Feasibility Studies: Completed
- Generating capital from family members: Completed
- Applications for Loan from the bank: In Progress
- writing of business plan: Completed
- Drafting of Employee’s Handbook: Completed
- Drafting of Contract Documents and other relevant Legal Documents: In Progress
- Design of The Company’s Logo: Completed
- Printing of Promotional Materials: In Progress
- Recruitment of employees: In Progress
- Purchase of the needed furniture, electronic appliances, office appliances and bar accessories: In progress
- Creating Official Website for the Company: Completed
- Creating Awareness for the business both online and in the neighborhood: In Progress
- Health and Safety and Fire Safety Arrangement (License): Secured
- Opening party/launching party planning: In Progress
- Establishing business relationship with vendors – suppliers of fresh and dried marijuana, cannabis-infused drink and food, alcoholic and non – alcoholic drinks, tobacco, et al: In Progress