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What Do I Need To Open A Dispensary?

Mary Ekundayo

by Mary Ekundayo

May 11, 2024 08:00 am ET Estimated Read Time: 6 Minutes
Fact checked by Emily Mullins
What Do I Need To Open A Dispensary?

There are certain facts you need to face before venturing into the marijuana industry. One is that it’s unlike any other regular business out there. At the state level, numerous but navigable policies are targeted at regulating the circulation of these psychoactive drugs. 

However, if you would like to start your dispensary business, there is good news. While we encourage playing by the book, you also need to broaden your horizons about the niche. In 2019, reported retail and dispensary sales were around $6.5–8 billion in the U.S. cannabis market. This is just a peek at how lucrative the industry is.

That being said, below is a step-by-step guide curated to help prospective cannabis entrepreneurs like you find your way around the market. 

Make a Plan

The grand thing to get started with is having well-outlined plans. In reality, putting your affairs in order is very encompassing. It involves having a grounded knowledge of the law, researching the market, making a budget, creating a business entity, finding a location, and readying your licensing application.

Market Research

Over the past decade, dispensaries have been the newest rave in the business landscape. The legalization of recreational and medical marijuana across North America has birthed a rising industry. 

Revenue-wise, the cannabis industry does insane numbers yearly. According to BDS Analytics and Arcview Market Research, cannabis sales hit a whopping $3.8 billion in 2020. It has also been projected to shoot beyond $6 billion by 2025.

There are hundreds of licenses for the medical marijuana industry depending on where you stay. Hence, the determination of your geographic and customers’ psychographics will hint at how to open a dispensary store that suits audience needs.


Putting together a feasible financial plan will help sustain your marijuana business. If you don’t have the funds, you can reach out to those that do. However, remember that potential investors are on the lookout for your business plan.

The key components of your budget should include capital, operational costs, licensing fees, inventory costs, mortgage expenses, staffing, technological requirements, taxes, and future projections. Usually, medical marijuana doesn’t involve sales tax but recreational marijuana does.

For most cannabis entrepreneurs, finding adequate capital is often challenging. This is because you typically need a large sum to get through the application and also beat the competition. 

Other sources of raising funds include family and friends, loans, state programs, crowdfunding, partners, brokers, social equity programs, etc.

Know the Legal Process

Another thing to note is the state laws that permit you to grow cannabis for medical or personal use. Depending on your state, these statutes may be flexible, allowing for more detailed local regulations.

Compliance with state laws is critical to the success of your dispensary ownership pursuit. Many of these policies stem from the Federal Controlled Substances Act and the Marijuana Tax Act of 1937. Often, states might use “Cannabis” in place of “Marijuana.”

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  • Larger purchase limits
  • Peace of mind
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  • Access to higher potency strains
  • Save up to 25% on cannabis purchases
  • Skip the line at the dispensary

Moreover, some states haven’t legalized cannabis yet. If you stay in such locations, you’ll be acting against the law if you end up opening a dispensary. Behind recognizing the law, familiarize yourself with the latest statutory reviews, proposed bills, and changes that are likely to impact the marijuana business.

Registration and Licensing

Getting the necessary paperwork done will earn you a permit to run your dispensary store like other businesses. Often, licenses oversee growing, processors, transport, lab testing, provisioning, medical marijuana facilities, dispensaries, etc.

Most requirements involve age (21 years and above), no attributable misdemeanor related to a controlled substance within 5 years, and no felony convictions within 10 years. There is a preliminary background check that must be administered to everyone in the cannabis business. You’ll also need to fill out and submit all documents for review as the first step of the process.

The license is often more challenging to obtain than state permits, especially in competitive areas. Inclusive are also some additional legal fees you might incur for owning a dispensary. These include an initial non-refundable fee, approval fee, licenses and review, and annual fees. The latter expenses are based on revenue, scope, and size of the business.

Property and Dispensary Store Design

Now that we’ve covered application and licensing, your next step should be getting a suitable property and putting up your products for display. To do this, you should acquaint yourself with the property law of your state. Also, find the right design layout models for your dispensary store.

The idea is to allow for the visibility of your products. Customers are keen on varieties and are willing to explore to make their choices. You can help out by shelving your products well.

The most common dispensary design layouts include a pharmacy model, bank model, mobile model, and kiosk model.


If you don’t mind a tech-saddled operation, consider integrating technologies into your cannabis business. This involves different designs like seed-to-sale and POS systems. Depending on the supplier and route of delivery, you might need to track your products. Both systems help you achieve that.

You can also incorporate other appliances including computers, printers, payment terminals, and network provisions.


You need an effective marketing strategy to hit your periodic sales target. The aim is to thrive in the hazy competition. So, identify your target audience and your unique selling points. Ensure you build a community of loyal customers based on the quality of your service.

Choose your desired marketing method and medium. This could be via TV, radio, billboards, or placing an ad in the local magazine. However, don’t forget to harness the advantage of social media. Build your online brand and grow your audience continually.

How Much Does It Cost To Open A Dispensary?

Running a cannabis business is capital-intensive. The cost of owning a dispensary varies based on size, location, and regulatory requirements. Usually, most estimates would advise you to have $150k and above. In some states with extensive capital requirements, you could be looking at several millions of dollars.

Here is the list of some expenses and price ranges:

  • Application and licensing: $5,000 to $30,000
  • Real estate: $25,000 to $100,000
  • Professional fees: $50,000
  • Personal costs: $250,000
  • Marketing: $25,000 to $100,000
  • Financial service costs: $1,000 to $2,000 monthly
  • Capital investments: $25,000 to $50,000

To wrap it up, jumping into the marijuana game means grasping its unique nature and rules, but the payoff can be big. Planning matters—do your market research, budget wisely, and stay on the right side of the law. Getting the green light, finding a spot, and embracing tech are vital steps, but be ready to pay some serious cash. Success boils down to smart moves and following the rules, paving the way for solid growth in this dynamic industry.

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