How to Open a Smoke Shop
If you plan to start a smoke shop soon or in the future, there are a lot of considerations you need to make first. A smoke shop is not like most other types of business: It sells age-restricted products and must comply with additional permit and license requirements that many other shops – like clothing stores and hobby shops – do not have to deal with. The specific permit requirements you will have to comply with depend on a few factors, including your city and state and the specific products you intend to sell.
Step 1: Create a Budget and Business Plan
The first step in launching any type of business is creating a business plan. Your business plan needs to include the following:
- Who will lead your business
- How the business will operate
- The business’ marketing strategy
- The business’ projected income and expenses
- Analysis of the business’ target market
- The business’ budget
- The products and services the business will provide.
Within these sections, note details like which suppliers you will use and how you will finance the business. Will you secure a small business loan? Do you have cash on hand to fund certain aspects of the business? These are critical details that need to be part of your business plan.
Step 2: Determine the Licenses You Need
If you plan on selling tobacco products, regardless of whether you are an official smoke shop or simply a convenience store that sells cigarettes, you will need a specific tobacco sales permit from your city or state. Which permits you need depend on where you plan to open the shop. For example, an entrepreneur looking to start a smoke shop in New York City must obtain an NYC Tobacco Retail Dealer License from the New York City Department of Consumer Affairs.
The same is true if you intend to open a cannabis dispensary. In fact, you will most likely face more stringent licensing requirements to legally operate a cannabis dispensary than to start smoke shop. Find the requirements for prospective cannabis retailers from your state’s department of commerce. There may be different requirements in place for medical dispensaries as opposed to dispensaries that are open to all adult consumers.
Many cities and states also regulate the sale of e-cigarettes and liquid nicotine, known collectively as “vapes.” Find your city and state guidelines for retail vape sales on their respective department of commerce websites, because the requirements imposed on vape shops may be different from those imposed on tobacco shops.
Step 3: Create and Register a Name
Once you have a business plan and an understanding of the permits you need to have, the next step is to register the business. Determine which type of incorporation, such as a limited liability company or a partnership, makes the most sense for your smoke shop.
You will need to register your business with your state and with the Internal Revenue Service. Keep in mind that although you should know which permits you will need to launch an open smoke shop at this point, in most cases you cannot obtain these permits until you have a registered business. Once you have valid incorporation documents and a federal employer identification number, you can obtain the permits you need.
Step 4: Find the Ideal Location
The next step is to find the right location for your smoke shop. Keep in mind that because of the products you will be selling, your shop will likely face steeper zoning restrictions than other types of retailers. These restrictions may be set by the city or the state. For example, some cities restrict tobacco and vape shops from operating within 300 feet of a school and 500 feet of each other.
Beyond finding a location where you are allowed to open, you need to find one that is convenient for your clientele. An upscale cigar shop might do well in a trendy downtown area or a high-end mixed-use property, whereas a mid-range smoke shop that also sells coffee and newspapers would probably be most successful on the outskirts of a residential area.
Step 5: Hire Knowledgeable Staff
When you start a smoke shop, handling everything on your own is extremely challenging. Hire a knowledgeable, friendly staff to help you run the store and make the purchasing experience more enjoyable for customers.
Step 6: Market Your Smoke Stop
You cannot expect to make money by simply opening your cigarette shop. Potential consumers need to know about your newly open smoke shop, and your job as the owner is to let them know about it through effective marketing.
A few marketing strategies that could work for you include:
- Coupons in local newspapers
- Social media campaigns
- Vehicle wraps.
Step 7: Move In and Open
Once you have everything in place to create a functioning, open smoke shop, you are ready to launch. Spread the word about your newly open cigarette shop on social media, in print media and through any other channels you know will reach your target customers.
- Always ask for photo identification from customers, as it is illegal to sell tobacco products to anyone under the age of 18 in the United States. You could potentially lose your business license and be fined by law enforcement for breaking this law.
- Advertise your business locally and online to attract customers.
- Code Publishing: Chapter 17.61
- Counter Tobacco: Licensing E-Cigarette Retailers and Vape Shops
- Investopedia: Business Plan
- BizFilings: What Are Business License Requirements for Cannabis Business
- NYC Business: Tobacco Retail Dealer License
About the Author
Lindsay Kramer has been a small business owner since 2014. She’s no stranger to the wild ride that running a business can be, but that doesn’t mean she’s done learning. every day, it’s something different when you’re in the driver’s seat. Now, she’s focusing her writing on helping other small business owners and people planning to become small business owners navigate this crazy thing we call entrepreneurship.How to Open a Smoke Shop. Despite growing health concerns related to smoking, many people in the United States still choose to smoke and consume other tobacco products. Opening a smoke shop to cater to tobacco customers can be a profitable business endeavor, as people who smoke may feel more comfortable and welcome … ]]>