Opening a Recreational Dispensary

Recreational Dispensary Facts - Complete Controller

In Opening a Recreational Dispensary or Cannabis shop, we have a lot of things to do, like market research, registering licenses, hiring, publishing, store placement, and marketing. And the biggest challenge of any new cannabis dispensary is compliance. So, here are some steps on how to open a dispensary. Let’s start!

 Business Plan

Market research

Pharmacies are a hot issue, also for non-smokers. In some states, legalizing recreational and medical marijuana opened a booming retail industry. So, get to know your market and determine the demographics and psychographics of your customers.

Budget draft

Another vital part of your business plan is a concise and transparent budget, including:

  • License application fee
  • License fee
  • Rental Costs
  • Cost of the product acquisition
  • Product transportation and storage
  • Employee salary
  • Security ADP. Payroll – HR – Benefits

Understand the Law and Apply the Law

We recommend reading to find out how to open a marijuana dispensary legally:

  • Cole’s Memorandum
  • National Assembly of the State Legislative Body
  • Medical Marijuana Facilities Licensing Act (if you are in Michigan)
  • Proposition 215 and Proposition 420 (if you are in California)
  • Tax regulations for cannabis pharmacies

Tax regulations for cannabis pharmacies

 Tax Code 280E should refer to deducting tax from sales and profits. Recreational marijuana tax at a net effective rate of 35–45%, which includes:

  • Retail taxes: 15%
  • Cultivation taxes: $2.75 per ounce dry weight and $9.25 per ounce dry weight for cannabis flowers

Business Registration

Choose the business type

Regarding the business type, you can choose to register one of the following:

  • Sole Proprietorship
  • Limited liability Company
  • Limited Guild
  • General partnership
  • Limited Liability Partnership
  • Company

Apply for the registration of business 

The City may require additional documentation to compare you to other applicants. Therefore, you should emphasize your experience, industry knowledge, readiness, funding, and social awareness in your business plan.

Get a License

You can apply for a vertically integrated micro business license; there is no need to apply for any license if you have fewer than ten employees. Otherwise, you will need a separate license to perform growth, manufacturing, distribution, or testing activities.

Retail marijuana license application process

Everyone involved in the cannabis industry will be background-checked and licensed. It covers work such as:

  • Farmer
  • Preparation
  • Transport
  • Processor
  • Laboratory test
  • Drugstore
  • Medical marijuana facility
  • Event organizer

Registration and license fees 

The overview of some of the additional costs you may incur as legal fees for owning a cannabis dispensary:

  • Initial license fee: $1,000
  • Approval fee: $5,000—$30,000
  • License and review: $0—$30,000
  • Annual fee: $4,000—$72,000

Fill in the license application

Fill out the license application before opening a recreational dispensary. Download A Free Financial Toolkit

Save the Layout Model

The four most popular dispensary layout models

The first challenge is to balance your safe stock with a visual merchandising layout, which includes the following four popular dispensary layouts:

  • Bank model
  • Dispensary model
  • Mobile model
  • Kiosk mode

Remember, not everyone supports marijuana. Therefore, an increase in vehicular and pedestrian traffic can cause complaints. So, having a safe place to park your car is a better experience for your customers.

Rent the Property

Land funds for retail marijuana are limited to urban areas. Therefore, this amount will increase your costs even more. In addition, you must submit an environmental impact analysis if you do chemical processing or farming on your premises.

Get permission from the City

Once you’ve found a suitable building or land, you’ll need a city permit to build and run your business. Signing up for one of these program locations will receive a discount on your distribution license and renewal fees.


You may consider integrating technology into your cannabis store operations, including:

Product inventory

Before bringing your marijuana inventory to the store, you must receive and create an inventory. The supplier usually makes these manifests with the exact requirements, whether the supplier is another company or your own. Finally, you state in your seed-to-sale software to verify that you legally own this inventory. The product details include the following:

  • Harvest
  • Unit of measure
  • Heavy
  • Cost

POS system

 When your employees sell products, your inventory decreases, POS can synchronize the following data and information from the seed-to-sale system via API:

  • Type of customer or patient for medical marijuana card
  • Patient identity
  • Transaction meter package
  • Trading date and time
  • Price
  • Size
  • Units sold

Other equipment

  • Printer
  • Payment terminal
  • Network connection
  • Computer CorpNet. Start A New Business Now

Retail Store Opening and Closing Checklist

With a new cannabis shop, you must spend 3-5 hours daily managing and checking inventory, especially during the first year. You already own the property and license. Now it’s time to organize the retail store opening and closing checklist. Develop processes to ensure reviews are conducted in the same way every day. 

Hire qualified dispensary employees

The success of recreational and medical marijuana retail stores depends on your staff to generate revenue in the first few months after the dispensary opens. Make sure you have good employees and prevent change.

Divide into appropriate roles

  • General Manager
  • Compliance manager
  • Receptionist or welcoming guests
  • Security
  • Sales partner or budtender
  • Inventory manager
  • Vendor or purchasing manager


Choose a marketing method

Your targeted market will determine your marketing choices. There are a few things it takes to market a new dispensary. However, be aware of a few limitations:

  • Do not place any billboards within 15 miles of the state border on the Interstate.
  • Don’t show minors in your ad.
  • Do not use any images, such as cartoon characters, to attract children’s attention.
  • It would help if you marketed for newly opened pharmacies through social media accounts like Instagram. Some ad limitations you need to know:
  • Make sure your audience is over 21 years old.
  • Don’t make free stuff, including buy one, get one free (BOGO) and contests.
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