I think there have been a lot of things overlooked by a lot of people in this thread. First and foremost is the idea that all MMJ dispensaries are only selling flowers. The most successful and profitable dispensaries are selling edibles, drinks, and most importantly clones. So if you are running a dispensary and only selling flowers and hash, you are bound to fail.
Clones are a huge money maker, especially if you can produce your own. Keeping a single mother plant is rather inexpensive, and taking clones from that mother even less expensive. It may only cost a few dollars in equipment and time (this being the more costly) to make a viable clone that can then be sold for an easy $15 - $20. The profit margin there is huge and can keep a business or grow going. From what I have been able to gather it is those who distribute genetics (either in clone or seed) who will survive in an expanding marketplace or impending legalization. This follows a simple rule in business, keep the overhead low (one plant can create hundreds of clones or thousands of seeds) and the output high.
Edibles and other forms of ingesting MMJ can also be places where dispensaries can make up some profits. While the mark-up may not be as high as with seeds or clones it is probably going to be higher than the mark up on flowers. While a home made brownie may not command a lot of money more novel foods like sodas or lollipops may be able to have a slightly higher mark-up.
Also having other products in the dispensary that are not MMJ can help. If you are selling clones offer supplies to grow those clones. The convenience of having everything in one place may make it more likely that patients who are only growing a few plants will by from you rather than making another stop at the grow store to pay a dollar or two less for the same product. This can be another place for dispensary owners to make a few bucks to cover business expenses.
The illegal market is also making it much harder for legitimate MMJ dispensaries to operate and make a profit. There is very little overhead for the illegal dealer, no rent, no electricity, no staff, no taxes, all make it easy for them to offer a low mark-up and still see a profit. This is not a luxury that legitimate dispensaries can afford. So when your average street dealer asks $60 for an eighth of mediocre quality it forces the dispensaries to offer the same price on eighths of the same or better quality. While it seems that having a convenient place to acquire ones meds would make people pay just a bit more for their MMJ the opposite seems to be true. Who complains to their street dealer about price? Not that many people. But as soon as you are running a legitimate dispensary people grow a pair and start bitching left and right about the price of their meds. This makes the dispensary owners drive their prices down (and ultimately the profits) to stay competitive in the market and keep patients in their shop rather than them going down the street to the next dispensary.
There are a lot of ideas that can help keep an MMJ business afloat, these are just a few. Ultimately it comes down to business plan, a good one will succeed and a poor one will fail. I have personally experienced what the SoCal dispensaries have to offer and seen which ones are the most successful. The best ones have incorporated each of these ideas in some capacity. So while it is incredibly hard to start a successful MMJ business in SoCal, and increasingly so in other places as well, it is possible.
On a bit of a side note, caregiverken, I think you highly underestimate how much of a mark up you are paying on everyday items. Places like Wal-mart, K-mart and even your grocery store have huge mark-ups on the products they sell. It may not seem like there is that much of a mark-up on a $10 t-shirt but it is probably marked up almost 100%. The lower the price you pay the more likely it has a high mark-up. I have friends who own a head shop and everything in there is marked up 50-100%, they are making significantly less than other businesses around them and are still doing pretty well; not BMW driving well but good enough. So next time you think that your MJ is being marked up too much think about what the mark-up on the rest of the stuff you buy really is.
