How to get a Recreational Dispensary License in the United States and a State by State Cannabis Program Overview

how to get a dispensary license

There are more than half of the states in the United States which have legalized medical marijuana and nearly a dozen which have implemented programs to allow for the adult use of recreational cannabis. With this in mind, there has never been a better opportunity to get into the emerging cannabis industry. Since cannabis is still federally prohibited, the businesses which actually handle cannabis products, such as dispensaries, are heavily regulated. Even with this heavy regulation, the cannabis industry has seen a huge influx in the number of participants applying for a license from the nearly dozen states which have implemented legal cannabis. Each state has a different process for applying for a cannabis license and this can often be a pivotal aspect of a company’s business plan. Without an operational license, there is no business. With each state being slightly different from a regulatory standpoint, let’s take a closer look at how each state regulates the emerging cannabis industry.

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Alaska Cannabis Industry

The cannabis market in Alaska has been one which voters passed via a referendum in the election of 2014. The program is fairly inclusive and allows for the growth of cannabis to be conducted by both commercial businesses and consumers. Under the Alaska cannabis regulations, residents can cultivate up to 6 plants in their homes and carry up to an ounce. Furthermore, the cannabis industry in the northerly state of Alaska has experienced product shortages after the implementation of their adult-use program. This is a common theme found from new cannabis markets and one which Alaska has worked through as more operators came online within the cannabis sector.

To open a dispensary in Alaska, businesses can expect to spend around $50,000 to apply for a cannabis business license. With this, it’s around $6,000 for state fees and the remainder of the money goes to the planning and facility build out which is required to be completed before an application can be approved.

Colorado Cannabis Industry

The state of Colorado allows consumers 21 years of age and older to possess up to an ounce of dry flower cannabis product and produce up to six plants in their home for cultivation. Colorado has become a blueprint with its strong example of an operational cannabis program in the United States.

One of the oldest cannabis programs in the nation, Colorado was the first of two states to regulate cannabis in a similar manner to alcohol. Having first mover advantage, the adult-use market has flourished in the rocky mountain state. The state offers a robust regulatory system through the establishment of their Marijuana Enforcement Division (MED) and decade long medical marijuana program prior to the legalization of adult-use cannabis. Licensing can be expensive for businesses looking to enter the Colorado cannabis market but as one of the most established markets for legal marijuana in America, the heavily regulated state industry should be seen as a positive safety net against federal intervention to the state’s cannabis program. For businesses looking to enter the Colorado cannabis market, they should expect licenses to run around $10,000 to $15,000 per license per year. The development of operational plans and facility build-out can cost anywhere from $50,000 to far higher numbers depending on the size of the build-out.

California Cannabis Industry

California, one of the largest economies in the world legalized adult-use of cannabis in the 2016 election and have since implemented recreational cannabis regulations. The average user can produce up to six plants in their homes legally, a similar theme we’ve seen since Colorado used this number as a guide. Furthermore, users 21 years of age and older can also purchase and carry up to an ounce of cannabis flower.

A business can expect license fees to start around $1,000 in California but can jump as high as $75,000 in state fees depending on the volume of sales the business makes. This may seem as a high number compared to other markets but it should also be noted California is the largest state in America with an estimated population of nearly 40 million individuals. This huge market potential leaves a great opportunity for operational cannabis businesses in the Golden State of California.

Maine Cannabis Industry

The marijuana program for the state of Maine was nearly stifled by the governor despite voters passing the regulations in the 2016 election. Luckily, after the governor of Maine vetoed a cannabis tax bill, the state legislature stepped up and overruled the veto to implement cannabis legalization per the people’s vote and will in Maine. For consumers, the cannabis program in Maine allows consumers 21 years of age and older to carry up to 2.5 ounces of cannabis flower. Furthermore, consumers are restricted to growing only 3 flowering cannabis plants. The state of Maine leaves much of the cannabis regulatory process up to local municipalities but there is also a small $500 state application fee for would-be cannabis businesses.

Massachusetts Cannabis Industry

The state of Massachusetts legalized the adult-use of cannabis for users 21 years of age and older in the election of 2016. Businesses looking to operate in the Massachusetts cannabis industry should expect a $3,000 non-refundable application fee. Furthermore, those applications which are approved can expect to see an additional $10,000 to $15,000 in fees which will be due to the state of Massachusetts.

Despite the state legalizing cannabis in the 2016 election, there are yet to be any operational cannabis businesses as the state has dragged its feet with the implementation of the voter’s will for adult-use cannabis. With this in mind, it’s a great opportunity waiting among the many adult-use cannabis programs since competition is not overflowing in Massachusetts, yet at least. In a similar manner to other state cannabis programs, consumers in Massachusetts are allowed to carry up to an ounce of cannabis flower and grow up to six plants in their homes.

Nevada Cannabis Industry

Many believe the Las Vegas market may be one of the single largest cannabis markets for recreational users in the entire world. With that in mind, the Nevada cannabis industry sprang up fairly quickly through a combined effort of residents in Nevada, businesses and government officials to deploy recreational cannabis. The quickly implemented cannabis program may have been to assist with the state’s robust tourism industry, specifically in the city of Las Vegas. Again consumers in Nevada are allowed to carry up to an ounce of cannabis flower and grow up to six plants in their homes.

Businesses looking to get into the Nevada cannabis dispensary market should expect to pay $20,000 in state fees for their business application. Costs will be far higher than this after build-out, real estate acquisition, and other variables are considered to operating a cannabis business in Nevada.

Oregon Cannabis Industry

The state of Oregon was the third cannabis program to be deployed in America. The state program allows consumers to cultivate up to four plants per person and carry up to a single ounce of cannabis on them at a time. Oregon provides a looser framework than other states and has thus faced some challenged with cannabis leaving the state. An issue all states with cannabis programs deal with but is particularly challenging in Oregon.

Businesses can expect a heavily competitive market in Oregon though. With this heavily competitive market, the state application fee costs up to $5,000 per application. As with all businesses, the total cost of building out a licensed and operational business can reach far higher numbers with regards to other expenses.

Vermont Cannabis Industry

The state of Vermont was the first state in the union to pass cannabis regulations through their state legislature instead of a voter initiative. With this, businesses in the state of Vermont should expect the application fees to cost around $2,500 per application but the regulatory system for adult-use cannabis is yet to be implemented. So, the business opportunities in the state of Vermont are sparse. Consumers face similar regulations with their home cultivation limited to six plants per household and up to 1 ounce of cannabis to be carried per person 21 years of age and older.

Washington Cannabis Industry

The state of Washington was one of the first programs in the United States to develop an adult-use cannabis program. With this in mind, the state of Washington does restrict consumers from cultivating their own cannabis product. Consumers are still allowed to carry up to an ounce of flower on them.

For businesses looking to enter the Washington market, they can expect to pay at least $5,000 in state fees. Currently, the state is not accept additional cannabis licenses beyond transport licenses which have an application fee of only $250 since it’s more of an ancillary license compared to dispensaries or cultivators.

Washington D.C. Cannabis Industry

The District of Columbia provides a unique example of cannabis prohibition and it’s repeal. The district has voted overwhelmingly to allow for the possession and consumption of cannabis for adults 21 years of age and older. Yet, there is not an official licensing system in place for the district. This has led to a grey market in the District of Columbia which has thrived with the huge population in the D.C. metro area. While the District has taken positive steps to regulate cannabis the same as alcohol, until they develop a license program for growers, processors, and dispensaries to operate within the area the market will remain somewhat comparable to the wild west of weed. With this in mind, it’s still a better spot for cannabis consumers compared to the many states which restrict cannabis with harsh criminal charges. Although consumers can enjoy cannabis within the D.C. city limits, businesses still must wait for regulations to be put in place prior to operating a for-profit cannabis business.

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