Head shops are retail stores that specialize in the sale of legal recreational drugs, medicinal herbs and drug paraphernalia, such as pipes and water-bongs; stores such as these may also sell artwork, antiques, music, clothes, magazines and comic books. Opening a head shop in most states in America is legal, and opening a head shop in the state of California requires the same steps as opening any other type of business in California. California is home to hundreds of head shops throughout the state, and opening one should not be much trouble as long as you are honest with the government about what your business is.
Look for a location for your head shop after you have obtained sufficient funds. Find a place that will be near your customer base, such as by a university, near a bar district or next to liquor stores; in these types of locations you will inevitably attract young adults who are interested in your products. Do not choose an area where lots of minors gather, like next to an arcade or by a high school, since your products will most likely be purchased by adults.
Consider a name for your shop that is catchy and can be easily remembered; also, make it unique to your location. For example, if your head shop is in Berkeley, California, consider a name like the Berkeley Blaze Bungalow; if your head shop is near the ocean in San Diego, consider a name like the San Diego Smoke Ship.
Register your business with the state of California and apply for and obtain a seller's permit for your head shop. To do this, first register your head shop by choosing a business type, such as sole proprietorship, and registering your business's name and type with your local county government; keep in mind that different business types have registration requirements, so be sure to be clear on what type of business your head shop is. California law stipulates that head shops need to obtain seller's permits, because the store sells tangible products; you can obtain this seller's permit from your local county government after registering. Set up your business to collect and pay sales tax for the state, county and city, or as required in your area.
Apply for and obtain a tobacco license for your head shop. Selling pouched tobacco, cigarette rolling papers, hookahs and flavored hookah tobacco will expand your customer base as well as increase profits; you definitely will need this license for a head shop in California. Offer a wide variety of tobacco product choices and offer side deals with these products as it will increase purchase incentives; for example, a customer who buys a hookah can get a free pouch of flavored hookah tobacco.
Research online, in magazines and books for the most up-to-date information on the type of products your store will be selling; this is an important step before actually ordering products, because you do not want to order outdated items. Consider subscribing to a magazine that deals with head shop products. Also, get involved in local organizations related to this type of business, such as glass artists associations; California has many such organizations, and at places like this you can discover what glass bowl and bong products are new on the scene.
Find suppliers for the type of products you will be selling, such as those companies that specialize in retail sale of tobacco products, pipe companies, art wholesalers, t-shirt producers and rolling paper companies; go directly to the source, if possible, as prices will be cheaper. Consider finding a trustworthy and reliable local glass-blower to buy from. Consider placing an advertisement online, on your store window and in a local newspaper saying that your store is interested in employing a glass blower.
Research prices by checking what other local California head shops' selling rates are and prices of comparable online stores. Figure out what your product purchasing budget is based on how you want to price your products. Be competitive in price and quality. Figure out how to maximize profit; consider pricing a little lower than competitors to start, figuring that volume of sales will increase profit margin.
Arrange your inventory by ordering all of the products you will need for several months' worth of sales. Consider your budget before purchasing and project a sales plan in order to meet your profit goals.
Develop a marketing strategy for your head shop to tap into your customer base; use both traditional marketing methods such as paid advertisements and grassroots-style advertising, such as sponsoring local bands. Understand that a head shop targets a certain group of customers. Your customers will range in age from 18 to retirement age, but your main customer base will probably be those in their twenties, so target this age group carefully. Plan for over a month of advertising time.
Go to local music concerts and hand out business fliers as well as free products like rolling papers; arrange advertising time on a local underground music radio station to announce special deals, opening hours and location; post an advertisement in a local newspaper and on locally based online magazines; hand out or post fliers at local bars, clubs, liquor and tobacco stores and universities.
Get a social media account to help to keep information flowing about your company. This will enable you to advertise inexpensively or even for free to a wide variety of interested customers. It may also enable you to find new customers. Make to sure to keep this account up to date and post promotional deals from time to time to get higher sales volumes at your store.
Get your shop ready to open by placing window displays to advertise to people walking by. Consider showing off some of your best products in this window display, such as your largest bong, prettiest bowl piece and best tobacco grinder. This will get people to stop and look at your products.
Keep up to date on laws regarding the things typically sold in head shops, such as bowls, bongs, the legal hallucinogen salvia and other legal highs. Laws regarding paraphernalia sold in head shops are always changing. Be careful not to offer anything illegal in your store, even by accident. As of 2011, marijuana is medically legal in California, and hence the sale of marijuana paraphernalia, like bowls, bongs and pipes, is also legal; however, it is illegal to sell such products for illegal consumption of drugs, so be sure to make clear that the products are being sold for legal use only. Salvia, a recreational hallucinogen, has been made illegal in several states but is still legal in California as of publication; this product is one of the more popular legal highs and can bring in a lot of revenue for your head shop. Be alert to any changes in laws concerning these products and regularly inquire with your local county or state government about the legality of other recreational and medicinal herbs, pills and powders.
