How To Open A Cannabis Dispensary Complete Guide - Cova

Research and planning is critical before you even begin the process of writing your business plan and applying for a dispensary license. Most states and provinces actively maintain a checklist of sorts on their official websites that breaks down how the application process works, which you’ll want to look at in detail.

Generally speaking, however, the four areas you need to research and create a plan for are:

• Local laws and regulations
• Location
• License
• Financing

Local laws and regulations

Be sure to research your local laws and regulations, as we know that important details will vary from one state and province to the next, and local city bylaws can have a significant impact on your dispensary. Compliance will be a common theme throughout your planning and understanding the local laws and regulations will help set you up for success.

Location

In most jurisdictions, in order to even fill out the paperwork related to your license application you’ll need to have a prospective physical location for the dispensary already secured. This means you’ll need to research the various municipalities you are considering operating in, paying particular attention to local demographics and possibly additional hurdles when it comes to compliance at the local level.

Section 6 of our guide is dedicated specifically to the challenges associated with finding the ideal location for your dispensary and addresses all the major considerations involved in greater detail.

Licensing

Ultimately, not getting a license means not a dispensary, so this is an excellent place to begin your research. We recommend working with an attorney and performing an in-depth study of all federal, state, and municipal laws, along with licensing requirements. There are some helpful FAQ pages that cover cannabis laws and licensing in Canada, and the states of California, Colorado, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nevada, New Jersey, New Mexico, New York, Oklahoma, Washington, and Alaska, with links to the official cannabis website portals. The two most important things to look out for are “must haves” and “red flags”; ‘must haves’ being requirements you must satisfy in order to obtain the license (such as residency, etc.), and ‘red flags’ being items which can cause an instant rejection of your application (such as possession of a criminal record).

Financing

Simply put, we know no bank is going to approve a business loan to open a cannabis dispensary. You can’t go to the Small Business Administration (SBA) either, since cannabis is still illegal under federal law. That means the two primary sources of funding and capital for most small businesses just aren’t available for dispensaries. Consequently, you’re going to have to put some additional work into coming up with a plan to raise the initial capital you will require; this may mean a significant personal investment, or bringing in other investors. Be mindful that in most states, even simple financial investors in any cannabis-related enterprise may also have additional legal compliance hurdles to deal with.