marijuana dispensary

How Much Does It Cost To Open A Marijuana Dispensary?

It’s said that the key to success is to invest in what you love most. For most cannabis enthusiasts, one way of making real money in this industry is by opening a marijuana dispensary in their local area. If we can divert a bit, let me mention that according to statists from ArcView Market Research, retail sales in the marijuana industry are expected to rise to a whopping $21.8 billion by 2020.

With such statistics, it’s clear the marijuana industry will be a fruitful sector where investors can make thousands or even millions of dollars annually. One way of having a piece of this cake is of course by opening a cannabis dispensary. But, before you can open a dispensary in this sector, there is a long list of requirements, costs and state regulations you must adhere to.

Just like opening any other cannabis business, a marijuana dispensary must be registered and must be ready to face strict state regulations and financial hurdles. If you’re a potential investor eyeing to open up a marijuana dispensary, here’s a quick breakdown of the initial cost of running this business in the United States.

Think of the initial capital requirements

Now, before enjoying the fun part of investing in cannabis business—such as choosing the buds to sell and selecting logos—you need to think of the initial capital requirements. This strategy is mostly used by most states to distinguish between serious cannabis investors and part-timers. In those states where medicinal cannabis has been legalized, the initial upfront cost of application is usually $5000 (non-refundable).

Now, just to be clear, let me mention that the initial upfront fee varies from state to state. For instance, Colorado charges an upfront fee of $3000 while Louisiana charges a fee of $150. If you live in Arizona or New Jersey, get ready to pay as much as $20,000.

Aside from the upfront fees for application, cannabis merchants must have significant amount of money at hand. This amount also varies from state to state. For instance in Arizona, you must have a startup capital of $150,000, $250,000 in Nevada or $150,000 if you reside in Massachusetts.

Now, what if you don’t have the cash to meet state requirements? Well, in such a case, the only way to save your dreams of ever investing in the cannabis sector is either acquiring funds from third-party lenders or get funds through fundraising. You see, since cannabis is classified as a schedule I drug, most financial institutions (mostly banks) always shy away from giving out loans to cannabis investors for fear of being busted.

What’s the startup cost?

Once you’re done with the initial capital requirements, the next thing you need to think of is the initial startup cost. Here, things can get crispy and quite complicated so you need to be fully informed to avoid messing up on the way. Let’s discuss the initial startup cost below.

Licensing fees

This is the first requirement you’ll have to adhere to. Here, you’ll be required to pay both municipal and state licensing fees. In most states, you’ll be expected to pay an application fee of $5000 and a further licensing fee of $10,000 to $15,000. In addition to these fees, there are other costs involved for license maintenance and renewals. For instance in Nevada, you need to pay an annual license renewal fee of $3000 while in Connecticut, you need to pay a staggering $75,000 in license renewals.

Acquisition of premise

Finding a retail space for your marijuana dispensary is by far one of the most stressing parts in this business. Whether you’re acquiring the premise or leasing, the initial cost will significantly be high. You see, for you to make good money out of cannabis dispensary, you’ll need to find an area with good visibility and high foot traffic to attract potential buyers.

Professional fees

Since most people are not entirely knowledgeable about the cannabis business, there’s the need to hire professionals to keep your dispensary up and running. For instance, you need to hire cannabis business consultants to help you understand more about the state laws and regulations, a cannabis attorney to aid in licensing and compliance, architects and bookkeepers. Here, you’ll need to set aside annual costs that are upwards of $50,000.


Since the cannabis industry is very sensitive, you need to invest a significant amount of money in security and surveillance. Here, you’ll need to invest in security systems that are synced with the Department of Licensing and Regulatory Affairs via the internet so as to have an access of your business via live cameras. To set up such a sophisticated security system, you need to put aside around $20,000.

Marketing and advertising

Marketing and advertising marijuana dispensaries can be difficult even in states where cannabis has been legalized for medicinal or recreational use. The best form of advertisement involves setting up billboards or using the media. Since cannabis is classified as a schedule I drug, most states prohibit “open” advertisement to avoid exposing minors and other vulnerable members of the society to marijuana.

Due to this reason, the only ways to compliantly advertise cannabis dispensaries is through cannabis-based websites, emails, direct mails, and SMS. Depending on the location you’re operating from, advertisement costs can go as high as $25,000 before you know it.

Trained employees

Of course, for any successful business, you need to have a team of dedicated and fully trained employees. Although the size of your dispensary will dictate the number of employees needed, you’ll surely need to set aside an annual cost of around $250,000 to pay the manager, supervisor and a few budtenders. Remember your employees are part of the initial startup cost as they can’t wait for your business to make profits for them to get paid.

Cost of equipment

It’s obvious every business must have the necessary equipments to get up and running. For the case of a cannabis dispensary, you need to think of office furniture, seats for the waiting room, computer systems, surveillance cameras, scales, display jars, and lighting.

Below is a summary of the startup cost of starting a marijuana dispensary at a glance.

marijuana dispensary cost


This is how much it’s worth to open up a marijuana dispensary. In case the high costs I’ve mentioned didn’t faze you, then I think the information above is enough to help you take off. Note that even after complying with state regulations, you still need to have somewhere between $400,000 to $500,000 to keep the business up and running.

Finally, the cannabis industry is expected to grow to a whopping $20 billion in sales by 2020. Due to this reason, I think it’s an investment worth making especially if you’re a positive investor looking forward to making money in the near future.