Selecting a Site For a Provisioning Center: The 7.5 Most Important Actions

Currently, there are very limited opportunities for legal provisioning center sites in Michigan. Only 72 municipalities have opted in and have zoning regulations in place and the competition for finding and controlling the best sites is getting more intense every day. Below are listed the most important considerations for selecting a site for a provisioning center.

  1. MAKE YOUR LIFE EASIER
    Select a licensed site selection consultant who is knowledgeable in cannabis laws (both for the State of Michigan and local municipalities). This should be someone who has already spent the time to understand the challenges that you face and can efficiently find great sites that qualify and suite your needs. This consultant’s fiduciary responsibility is to you but is typically paid by the landlord or seller. This saves you the time of researching the regulations in 72 communities.
  2. TIMING IS CRITICAL
    Many of the qualifying localities will allow a limited number of provisioning centers, so it is important to start your search early enough to secure the best sites in the best markets. Your consultant will work with you to prioritize target municipalities and then put the maximum effort into securing sites that control the markets in these target cities. Secondary targets will then be targeted. This also works best if your consultant provides a team to secure sites rather than just one individual.
  3. UNDERSTAND TRAFFIC COUNTS AND ACCESS
    Traffic count analysis is not just choosing the site with the highest average daily count. Sometimes traffic counts can be so high that it makes access to the site more difficult than the site a competitor may have. It is also important to evaluate the type of traffic (what percentage of the drivers might be available to you as a customer). If the traffic count is accurate, easy ingress and egress is the next important consideration. How easy is it for clients to get in and out of your location? How does that compare to your competitors?
  4. KNOW YOUR CLIENTS AND WHERE THEY ARE
    In selecting a site for a provisioning center, demographics and psychographics are very important tools. When comparing sites a person, smoking medical marijuana, keep them in mind when selecting a site for a provisioning centerand localities, it is important to know such things as the following and then compare sites and localities based on that analysis: a. The age range for most of your clients b. The education level for most of your clients c. Income, employment type d. Number of caregivers and patients
  5. THE CHEAPEST SITE CAN BE THE MOST EXPENSIVE
    When you have a choice for selecting a site for a provisioning center, the first consideration should always be to pick the ones that meet the above requirements because they will always offer the highest projected volume. With the margins in the cannabis business, it is well worth it to lock up the best sites.
  6. MULTIPLE GOOD SITES AVAILABLE IN A MUNICIPALITY?
    Never be reluctant to tie up multiple sites (with letters of intent, leases with exit clauses or purchase agreement with contingencies) until you have the approvals you need for your chosen site. This will help lock out competitors until you control the best sites.
  7. LEASE NEGOTIATIONS
    Your consultant should research the landlord’s (or seller’s) motivation level and know the comparative value of other properties to get the best prices while minimizing negotiation time. For longer leases, consider requiring the landlord to provide money to help reduce your buildout costs.

7.5. SECURE SITES THAT ARE BETTER THAN FUTURE COMPETITORS CAN GET
Provisioning Centers are essentially a retail business in which clients (customers) will frequent the most convenient sites. Consider what might happen in the future (new sites, etc.) and concentrate on: a. High visibility b. Easy access c. Closest to the greatest concentration of potential clients d. Best location in the best municipalities

Thanks to guest blogger Bill Bussey for this post. He can be reached at CCIM XVentures 616-291-6022 bbussey@xventureswm.com