What You Need to Know Before Starting a Dispensary

April 14, 2021


Owning your own business is a dream many have. After all, what’s better than working for yourself and bringing products you are passionate about to your community? This dream inspires many entrepreneurs to take the leap and start their own businesses.  

Running and owning a business is hard work no matter what type of business you have or product you sell. It takes lots of determination, long hours, and perseverance. This is especially true if you are considering getting into the marijuana business by opening a cannabis dispensary.

Opening up a marijuana dispensary comes with unique challenges, on top of the usual challenges running a business has. So, before you write up that business plan, be sure you read this article to get an idea of what you’ll need to do to make your dispensary dream a reality (and a success).


Knowing why you want to take on this task is essential. Your “why” is the driving force and what will keep you motivated throughout this process.

There are many reasons people may decide to open a dispensary and each reason is personal. Some common reasons include:

  • Getting into the marijuana industry early. As more states legalize marijuana for medical and recreational use, the industry will only grow. In fact, a Grand View Research report estimated that the marijuana market will be worth $73.6 billion by 2027 – just six short years from now!
  • Because they are passionate about the product. Perhaps you’ve seen the impact medical marijuana makes on patients who use it. Or you just really feel marijuana could be beneficial for everyone. Whatever your experience, having some passion for cannabis and a desire to share that passion is important.
  • Looking to expand into new areas. Other people may decide to open a dispensary as a way to diversify their business portfolio. This is probably one of the least common reasons but still a valid reason to open a dispensary.

No matter your reason for jumping into the marijuana market, write it down. It may help to see it on paper as you navigate this long process.


As you prepare to open a dispensary, be sure you give it real thought. As you consider every aspect, keep in mind the below.


A dispensary is a long-game business, not a get-rich-quick option. Though nearly all new businesses take time to become profitable, that is especially true for cannabis dispensaries.

Not only does it take a lot to get your dispensary off the ground, but it’s also expensive to operate going forward as you renew licenses and make adjustments as needed to stay in compliance.

As you plan for your future dispensary, remember this is a long-term commitment and it will take time before you start pulling a profit (if your business is successful). For many, the risk is worth it, but make sure it is worth it for you.


Though cannabis use is slowly becoming more accepted in the United States, its use is not yet legal everywhere, which can impact your ability to do business.

If you want to have an online dispensary, you’ll need to look up not only the laws in place for the state in which you plan to do business, but also the laws for every state in which you want to operate and sell products. Each state has its own set of rules and regulations, which can be challenging to navigate.

These regulations can apply to many aspects of your business, including, but not limited to:

  • Your dispensary’s location
  • Where you can source your product
  • Your shipping and trucking options
  • Your product’s packaging
  • Your logo and branding choices

You will need to be familiar with current regulations and also constantly prepared for changes. States can change their requirements at any time, and you’ll likely only have a set time period to comply with new regulations. Think about how you plan to stay on top of these changes going forward. For many, hiring someone to help with this is a great option, but it’s also another expense.  


In the United States, some states have only legalized marijuana use for medicinal purposes, while others have legalized it for recreational or both recreational and medicinal purposes. Before you open your dispensary, you’ll need to know first what type of marijuana use is legal in your state and, second, what type of dispensary you want to operate.

If both are legal in your state, do you plan to sell both? What restrictions are around those types of dispensaries? Even if you only want to cater to medical marijuana users, you’ll find there are regulations around that, too.

If you operate or sell in multiple states, you need to know what is allowed in each state. For example, as a recreational marijuana dispensary, you can’t sell to a place that only allows medical marijuana. You will also want to look up the regulations around shipping your product, should that be something you want to offer through your dispensary.


When most people want to start a business, they can walk into their local bank and apply for a loan (or hop online and start the process). However, it’s not that easy when it comes to getting funding to start a cannabis dispensary.

Because marijuana still is not legal on a federal level, most banks will not give loans to someone starting a cannabis business. For them, the risk of getting into a highly regulated industry isn’t worth it. This can leave you looking for other funding sources.

You may need to front the costs out of your own savings or through private investors. But, keep in mind, you’ll likely need a substantial amount of capital to get up and running, which can make finding the funds even more of a challenge.

Before you start the process of opening a dispensary, think about the funding options available to you and whether you’ll have the cash you need to get started.


To operate a legal cannabis dispensary, you’ll need a license. Most states require them for both medical marijuana dispensaries and recreational cannabis dispensaries; unfortunately, securing a license won’t be as easy as filling out a form.

Some states require you to go through various processes, such as holding a town meeting of sorts in the area you plan to open before your license is approved. You may need buy-in from the town, and this must be done within a specific timeframe of you submitting your application.

Licensing fees can range from a few hundred to thousands of dollars. Not only will you need to pay the licensing fee up-front when you apply, but you’ll need to pay another fee when the time comes to renew your dispensary’s license.

Take some time to look up the licensing requirements in your area. Write down step-by-step what you’ll need to do to help you get off on the right foot. If you need help figuring out what to do, reach out to the office in charge of licensing.


A dispensary is nothing without having quality products to sell. Though there are lots of marijuana manufacturers out there, not all are willing to sell to dispensaries, as some prefer to work on their own. You’ll need to find a manufacturer that offers quality products and is willing to work with you.

Some states require dispensaries to grow their own product rather than purchasing a product to sell from other marijuana growers. If this is the case in your area, you will need to make sure you know how to grow and make the products you want and that you have the appropriate staff to accomplish your goal. This can also change your opening timeline and will likely require more startup money. While it does come with added steps and costs, growing your own can help you feel confident in the product you are selling your customers.


Your storefront is important; after all, location is everything. However, finding a store in the perfect location may be a bit of a challenge and something to look at before starting your dispensary.

First, some states have regulations around where you can operate, and you’ll need to follow them. For example, you may be required to be a certain distance away from a school or hospital. You may even be required to be a set distance away from other dispensaries.

Second, some landlords are not willing to rent to someone in the cannabis business. They could potentially get into trouble should you not meet the regulations in your area, which can deter them from leasing their open space to you.  

It’s important to note that hiding your intentions for the building is not a good idea, either. Be upfront with what you plan to do with the space. Keep searching until you find a building and landlord that is the right fit. Of course, if you have the money, you can buy a space too.  


It’s also important to know that some, if not most, states perform background checks on you when you apply for your license. That means that if you have a criminal background, you may not be approved to open a dispensary.

Some states also require these checks to be done on investors and employees (and you’ll likely front the cost). If you have a record, look into the requirements before you apply so you know what to expect and if you (and your investors) will qualify to open a dispensary.


Do you remember the last time you paid with cash? For many people, carrying cash is a thing of the past. Though some customers will undoubtedly be willing to pay in cash (which you’ll need to know the restrictions on as well), most will likely pull out the plastic to make payment.

Having the ability to process credit and debit card transactions at your dispensary is essential, especially if you plan to have an online presence. Know that not all banks will process them these charges and finding a processing merchant can be a challenge as being in the marijuana industry will make your business high-risk.

You’ll want to look for point of sale merchants who specialize in working with people in the marijuana industry. Not only will they allow you to accept payment in a form most people pay with, but some may offer additional services that can help you manage delivery and ordering options for your dispensary as well.

Finally, working with a card processor that specializes in the marijuana industry can also help you stay compliant. They will be able to help manage this from a payment acceptance end and may even have software to help you pull reports and manage your business as a whole.


Running your own business is often seen as the ultimate American dream but, it requires hard work to get a business off the ground. If your dream is to open and run a marijuana dispensary, you will face additional challenges other businesses don’t have. That doesn’t mean you can’t or shouldn’t chase your dream.

Before starting your business, make sure you do thorough research on the requirements and regulations that come with this type of business. Writing a thorough business plan that addresses all the challenges you may face is a great first step and can help you be taken more seriously by investors and even leasing agents.

You’ll also want to work with people experienced in the cannabis industry, such as card processors, designers, and even legal counsel. This can make it easier to navigate this changing market.

It may take a while to turn a profit on your new dispensary but, for many, the benefits of doing something you love and sharing a product you are passionate about is worth it. Good luck!