Barton Morris, Cannabis Legal

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Medical Marijuana License
Business Planning
BARTON MORRIS | CANNABIS LEGAL GROUP

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Business Planning
• Assists in Attracting Investors
• Necessary for Applications
• Necessary for Operations and Budgeting
• The Effectiveness of a Business Plan is Dependent upon the source of its
data
• Must be Conservative
• The More Detailed (but brief) The Better
• Branding and Style are Important

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Importance of a Business Plan for
Applications
• Regulators may use it against you especially if there are specific promises
utilized to be persuasive - i.e. community improvement, special
programming
• Your license is only issued for one year
• Use these numbers to set your goals

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LARA Administrative Rule 6 Application
Requirements
A business plan with the:
1. Anticipated number of employees and
2. Projected gross receipts

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City of Lansing Rule 1300.5(11)
License Application Submission
A copy of the proposed business plan including, but not limited to, the
following:
1. the proposed ownership structure of the establishment including
including percentage ownership of each person or entity
2. a current organizational chart that includes position descriptions
and the names of each person holding each position

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Fundamental Components of a
Business PlanRed = State Application Required Information
• Keys to Success
• Mission Statement
• Start-Up Costs
• Market Analysis
• Pro-Forma Financials
• Projected Revenue
• Branded Cover Page
• Executive Summary
• Table of Contents
• Team Members
• Investment Opportunity/ROI
• Organizational Chart
• Projected Cash Flow/
Liquidity Requirements
• Number of Employees and
Anticipated Labor Costs
• Projected Expenses

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Executive Summary
Provides a brief summary of the scope of the entire project and goals. Defines the past,
current and future landscapes. It sets the stage and should be written with both
excitement and persuasion.

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Corporate Summary
• Corporate structure and history
• Identifies the members, officers, organizers and core team along with their
history of accomplishments and compliance
• Photos are nice touch
• Summarizes capital contributions

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Organizational Structure

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Keys to Success
What makes you special and why?
What sets you apart from the competition?

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Pro Forma Financials
• Financial estimates based upon historical and reliable data
• Even though this industry is new, accurate data can still be obtained with
thorough investigation
• Write accompanying statement about details of figures
• What can you do to investigate? Where do your sources of information come
from?

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Market Analysis Strategies
Visit and price other dispensaries
Talk to owners and employees
CannabisBenchMarks.com
MJ Business Daily Factbook
PriceofWeed.com
Data from Colorado, Oregon, Washington, and Arizona

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Key Desirable Data
Number of Patients City/County
Census Population City/County
Marijuana Used per Patient
Historical Wholesale Price per
Pound
Retail Price per Ounce
Average Time Per Patient
Number of Area Facilities
Number of Customers per week
Average Sale Per Patient

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How to Forecast Retail Sales?
• Evaluate the competition
• Ascertain the patient customer potential
• Estimate the number of weekly sales
• Understand the average sale per patient

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Michigan Medical Marijuana Patient
Count Data
Bureau of Medical Marihuana Regulation
◦ Laws Rules and Other Resources
◦ BMMR Legislative Reports
◦ MMMA Act Statistical Reports

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2014
Medical Marijuana Act Statistical Report

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2015
Medical Marijuana Act Statistical Report

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Medical Marijuana Act Statistical Report
2016

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County
# of patients (Dec
2016)
Population (July
2016)
Patient to Population
Ratio
Wayne 34,941 1,749,366 2.00%
Oakland 24,416 1,243,970 1.96%
Macomb 19,455 867,730 2.24%
Kent 8,754 642,173 1.36%
Genesee 14,802 408,615 3.62%
Top Five Michigan Counties - Medical Patients

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147,070 (132,300) Arizona Dispensary Patients
7,000 average pounds sold per month
25.82 grams per patient per month average
2017 Arizona Average Patient Purchase
Amount

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How to Forecast Wholesale Sales
• KNOW THE WHOLESALE MARKET
RATE
• HAVE A GOOD MARKETING PLAN
• GROW GOOD WEED

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$597.00
arcviewgroup.com

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Gross Revenue 2019 2020 2021
$1,638,000 $1,965,600 $2,358,720
$1,638,000 $1,965,600 $2,358,720
Expenses 2019 2020 2021
Employee Salaries $607,588 $698,726.2 $803,535.13
Community Improvement $16,380 $19,656 $23,587.2
Insurance $60,000 $60,000 $60,000
Office Supplies $2,400 $2,400 $2,400
Packaging $3,000 $3,000 $3,000
Utilities $6,000 $6,000 $6,000
Cost of Goods Sold $819,000 $982,800 $1,179,360
Professional Fees $15,000 $10,000 $8,000
Compliance $4,500 $4,500 $4,500
Licensing Fees $15,000 $15,000 $15,000
Marketing $25,000 $25,000 $25,000
Lease Payments $18,000 $18,000 $18,000
Security $3,000 $3,000 $3,000
Total $1,594,868 $1,848,082.2 $2,151,382.33
EBITA $43,132.00 $117,517.80 $207,337.67
Three Year
Revenue and
Expense
Projections - Retail

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Income Projections 2018 2019 2020
Flower $4,000,885.00 $6,898,600.00 $6,545,000.00
Trim $126,094.00 $212,330.00 $194,650.00
Total Revenue $4,126,979.00 $7,110,930.00 $6,739,650.00
Expense Projections 2018 2019 2020
Insurance $20,400.00 $22,440.00 $24,684.00
Inventory Software $8,160.00 $8,976.00 $9,874.00
Licensing Fees $15,000.00 $16,500.00 $18,150.00
Accountant/Bookeeping $10,800.00 $11,880.00 $13,068.00
Attorney Fees $15,000.00 $16,500.00 $18,150.00
Security Monitoring $636.00 $700.00 $770.00
Telephone $2,376.00 $2,614.00 $2,875.00
Rent $7,500.00 $8,250.00 $9,075.00
Compliance Audits $1,200.00 $1,320.00 $1,452.00
Labor $459,268.00 $505,195.00 $555,715.00
Utilities $186,000.00 $204,600.00 $225,060.00
Facility Upkeep $32,400.00 $35,640.00 $39,204.00
Genetic Acquisitions $9,600.00 $10,560.00 $11,616.00
Staff Training $18,000.00 $19,800.00 $21,780.00
Marketing $24,000.00 $26,400.00 $29,040.00
Secure Transportation $9,804.00 $10,784.00 $11,863.00
COGS Variable Expenses
Packaging $10,800.00 $11,880.00 $13,068.00
Nutrients/Media $45,000.00 $49,500.00 $54,450.00
Labor $288,000.00 $316,800.00 $348,480.00
Utilities $72,000.00 $79,200.00 $87,120.00
$1,235,944.00 $1,359,539.00 $1,495,494.00
Three Year Revenue
and Expense
Projections - Cultivation

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Costs Notes
Building $0 Ross contribution old store
Buildout $250,000 Needs new roof and hvac
Security System $15,000 10 cameras
POS Software $1,000 down payment and training
Computers $12,500 5 computers (one for office)
Display Cabinets $7,500 60 total square feet display
Signs (In and Out) $10,000 2 outdoor, 2 indoor
Professional Fees $40,000 lawyer, architect, CPA
Application Fees $15,000 city and state
Equipment $1,000 4 scales
Website $2,500
Furniture $16,000 Desks, chairs, waiting room
Total $360,000
Start Up Costs

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Business Planning Tips
• Make it Look Good and Readable
• Keep it Simple But Complete
• Use an NDA
• Increase Revenue Projections with Marketing

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Marketing Strategies
• Internet Based Content/Educational Marketing
• Brand Awareness
• Train/Certify Employees Regularly
• Emphasize and Dedicate Resources to Compliance

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• Advertising
• Books and Records
• Facility
• Inventory Tracking
• METRC Compliance
• Reporting Requirements
• SanitatioRequirement
s
• Security
• SOP’s
• Signage
• Visitor Procedures
• Waste Disposal

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Thank You