How to open a marijuana dispensary in 2020

In the United States, anti-marijuana laws are falling like dominoes. As of this writing, 11 states—plus the District of Columbia—have legalized the herb for both medicinal and recreational use. Others will soon follow, and it is easy to see why: last year it was reported that the legal marijuana industry has brought Colorado more than $1 billion in state revenue.

Pot is a burgeoning and lucrative sector of the economy. Cannabis shops are popping up all over the place, and there has never been a better time to get in on the action. Of course, there are a few things you should know before throwing your hat in the ring. In this article we will walk you through what it takes to successfully open a marijuana dispensary.

Requirements to open a dispensary

Let’s be upfront about one thing: opening a marijuana dispensary is not cheap. It requires significant capital. And by “significant” we mean $250,000 or more—and that’s just the start-up cost. Some states will not grant you a license to legally sell marijuana unless you can demonstrate that you have the financial resources to operate a business long-term. Remember: operating a business means spending money on rent, employees, payroll taxes, and inventory—in addition to the cost of your product.

Don’t count on traditional business loans from a bank, either. Until marijuana is legalized at the federal level, most banks simply won’t entertain the idea of loaning you money. The good news is that federal legalization has become a matter of “when” rather than “if.” But until that time you will most likely have to rely on generous family and friends, and maybe an angel investor or two.

License costs

Once you have the capital, it’s time to obtain your license. As you can probably imagine, this is a slow, expensive, labor-intensive process involving lots of red tape and regulatory fees. You will almost certainly be subject to an extensive background check. If you have a criminal record, that’s going make the job of getting a license even harder.

The costs associated with acquiring a license vary by location, and even within locations. As a general rule, don’t expect to spend less than $5,000. In some states it could be more like $15,000, or even upwards of $20,000.

To get an idea of what you’re in for, take a look at California’s Bureau of Cannabis Control website, which includes licensing information, application forms, and video tutorials. Each state in which marijuana is legal will have a similar resource.


This can be tricky. For one thing, there are rules about how close a marijuana dispensary can be to certain spaces. California law, for example, stipulates that marijuana dispensaries have to be at least 600 feet away from grade schools, daycare centers, and youth centers.

Which brings us to the term “compliant property.” Essentially, this is a spot that ticks all the boxes with respect to the cannabis retail regulations in a given state, county, city, etc. These regulations have enormous variation and are subject to change. You really have to be able to roll with the punches if you’re going to successfully operate a marijuana dispensary.

Unless you’re made of money, chances are good that you will be renting a building. This can be another source of consternation. Not all landlords are on board with their property being used to sell weed, especially if you’re not completely honest with them about it beforehand.

Nor, for that matter, is everybody thrilled by the prospect of having a marijuana dispensary in their neighborhood. This is another thing to bear in mind when shopping for a location: how receptive are the locals likely to be to your new business? If the answer is “Not very,” keep looking.

Needless to say, not everybody is cut out for starting a marijuana dispensary. It requires unusual amounts of money, patience, and commitment. It’s by no means easy, but then nothing worthwhile ever is.

Author: indoexpo

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