How Much Does it Cost to Open a Dispensary?

By Michael Cheng | March 25, 2016

Opening a medical marijuana dispensary is every cannabis enthusiast’s dream. For one’s business plans to come to fruition, it is important to understand the costs that come with the application and startup process. Read on to find out what the procedures are like for people who are interested in owning a medical cannabis dispensary in the US.

Dispensary Startup Fees

The meticulous application process is designed to separate the serious applicants from those who aren’t fully committed to the business. Because of this, there are numerous requirements to consider before getting into the fun stuff, like selecting which buds to offer at your store or creating an upbeat logo. In states where medical cannabis businesses are legal, the general upfront cost for an application is $5,000 (non-refundable). Licensing fees vary, depending on your location (for example, in Colorado the initial licensing fee is $3,000, while in Louisiana it’s $150, and in New Jersey it’s a whopping $20,000).

“Medical marijuana business license holders say the process to receive state and local medical marijuana certificates is grueling,” said Andrew Jolley, a Las Vegas dispensary owner.

Most applicants fail to meet the startup capital requirements needed to ensure smooth operations. When applying for a permit, individuals must prove that they have substantial amounts of cash on hand. Again, this varies from state to state. In Arizona, $150,000 is needed for startup capital; and in Nevada, $250,000 in liquid assets is the prerequisite. However, for most dispensaries, the actual capitalization costs are higher than the minimum threshold set by the state.

Cannabis Growers and Cultivators

Individuals who want to grow their own weed in addition to opening a dispensary should know that there are separate startup fees on the table. Growers must pay for an application fee and a license that is to be renewed annually. Some states, like Nevada, charge cultivators a yearly growing fee, which for producers residing in the state is $3,000. By comparison, Connecticut demands $25,000 for the grower’s application fee and a staggering $75,000 annual license maintenance fee.

Other Factors to Consider

Indirect costs for opening a marijuana establishment can sometimes be just as costly as the initial startup fees. In most states (like Colorado), applicants have to be a local resident of the area for at least two years, and should not have any controlled substance felony convictions within five years prior to the date of the application. When it comes to financial assistance, the party providing the funds should also have a clean criminal history, based on the standards of the licensing authority.

If the requirements above didn’t faze you, then then you should be good to go in opening up your very own medical dispensary. Although the guidelines are strict, they are there to ensure that cannabis establishments are reliable in offering quality medicine for patients looking for organic treatments.

Michael Cheng

Michael is a legal editor with publications for Blackberry, and R Magazine. He specializes in tech startups, cannabis gadgets and fitness wearables. He enjoys spending time outdoors, being a productive father and partaking in a nightly toke after the end of a long day.

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