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How to Transition from CBD Store to Recreational Cannabis Dispensary

Transition from CBD Store to Marijuana Dispensary

In the ever-evolving world of cannabis retail, transitions and expansions are common as regulations change and opportunities arise. Many CBD stores are now considering a transition to full-fledged cannabis recreational dispensaries as legalization spreads across the United States. This guide will walk you through the steps, regulations, and considerations in making this transition successful. We'll also delve into specific regulations and opportunities for CBD stores in Minnesota.

Understanding the Recreational Cannabis Retail Opportunity 

The legalization landscape in the U.S. often starts with medical marijuana, followed by recreational use. As more states open up the recreational cannabis market, existing CBD stores have a unique opportunity to tap into this new customer base and expand their operations—and revenue. While CBD sales were projected to reach $4.3B in the U.S. in 2023, Recreational Cannabis sales are expected to reach between $18.6B and $22.5B this year. That estimate rises to $26.9B in 2024 according to the MJBiz Factbook.

The Importance of Cannabis Regulations

Cannabis regulations play a pivotal role in shaping the industry, and they vary significantly from state to state. Staying informed and compliant with these regulations is crucial for a successful transition. Here's why they matter:

  • Regulations ensure the safe production and distribution of cannabis products.
  • They provide a framework for taxation, which can impact pricing strategies.
  • Compliance with regulations is necessary to avoid legal issues and maintain a good reputation in the industry.
  • Understanding the purchase limits, labeling requirements, and testing standards specific to your state is essential.

What to Know Before Transitioning from CBD to THC

Before embarking on your journey from a CBD store to a recreational cannabis dispensary, consider these essential factors:

Changes in Customer Demographics:

  • Prepare for a broader customer base, including health enthusiasts, creatives, and those using cannabis for various purposes.
  • Customize marketing communications for the new target market.

Changes in Taxes and Operations:

  • Adjust pricing strategies to accommodate varying tax rates.
  • Monitor profit margins and inventory management.

Changes in Compliance Requirements:

  • Understand and adhere to stricter compliance laws for the recreational market.
  • Implement seed-to-sale tracking systems, such as Metrc, for regulatory compliance.

How to Transition from a CBD Store to a Recreational Cannabis Dispensary

1. Update Your Business Plan

Whether for your own benefit or to prepare for the possibility that a new license application may require it, you should consider updating your business plan first. Along with revising your executive summary and company analysis, you’ll want to include the following:

  • Industry analysis
  • Customer analysis
  • Competitive analysis
  • Cannabis marketing and sales plan
  • Operations and security plan
  • Financial plan

2. Acquire a New License

To transition successfully, you need to secure the necessary licenses for recreational cannabis sales:

  • Research your state's specific requirements for licensing.
  • Verify the zoning regulations for your existing store location.
  • Determine the cost of a recreational dispensary license and other operational expenses before applying.

3. Expand Your Inventory

Expanding your inventory is crucial for meeting the demands of both recreational cannabis and medical cannabis customers:

  • Familiarize yourself with potency rules and regulations regarding product categorization.
  • Ensure your suppliers can meet the increased demand, considering supply and demand dynamics.
  • Take into account customer preferences and pricing strategies.

4. Change Your Dispensary Layout

Reconfiguring your dispensary layout may be essential to cater to regulations or satisfy recreational consumer expectations. 

  • Plan the display of recreational products.
  • Set up additional waiting rooms, shelves, or storage areas.
  • Enhance security measures to accommodate increased foot traffic and inventory.

5. Update Processes and Train Staff

Training your staff or hiring new budtenders for the transition is key to providing a seamless customer experience:

  • Prepare budtenders to answer questions about THC and CBD percentages.
  • Ensure staff is well-versed in compliance requirements.
  • Update your SOPs to reflect cannabis retail best practices.
  • Utilize a compliant cannabis POS system, such as Cova, to streamline operations.

6. Use a Compliant POS System

Choosing the right POS system is vital for a successful transition to the recreational market:

  • Look for a system that integrates seamlessly with state regulatory systems like Metrc.
  • Ensure the POS system has ID and age verification, purchase limit alerts, and automatic reporting features.
  • Provide your budtenders with a user-friendly interface that simplifies the customer experience.

When transitioning from a CBD store to a dispensary, it's paramount to utilize compliant POS and cannabis software like Cova. These tools are essential for maintaining adherence to strict cannabis retail regulations, automating processes to prevent human error, and ensuring compliance with sales limits and age verification. With features like built-in ID scanners, purchase limit gauges, and traceability integration, compliant POS and cannabis software simplify the regulatory burden and help you run a successful dispensary. Make sure your transition is seamless and compliant with the right software in place.

Transitioning CBD Store to Rec Dispensary in Minnesota

Timing can be everything when it comes to success in cannabis retail, and Minnesota is a prime example of perfect timing for CBD store owners to capture first mover advantage. Although sales of recreational cannabis likely won’t begin until 2025, and Minnesota Cannabis Laws and licensing regulations are still in development, established CBD dispensaries are primed to be the first to capture the THC consumer market.

CBD Laws in Minnesota

Minnesota offers unique opportunities for CBD stores. Here's what you need to know:

  • CBD is legal for adults over 21.
  • The CBD product must contain less than 0.3% THC.
  • Amended statutes like Chapter 18K, Minnesota Statute 151.72, and HF 4065 regulate CBD sales and products.

Legal Status of CBD in Minnesota

  • CBD products can contain up to 0.3% THC.
  • Accurate labeling and proper testing are required.
  • Purchasers must be over 21.

Purchasing CBD in Minnesota

  • CBD can be bought online or in person without a prescription.
  • Ensure products are accurately labeled and tested by an independent lab.

Buying CBD at a Dispensary

  • CBD with higher THC content for medical use can be obtained at licensed dispensaries.
  • Since recreational CBD is legal, it can also be found at various retail locations.


Transitioning from a CBD store to a recreational cannabis dispensary is an exciting venture with significant potential. However, it comes with a range of regulations and considerations to navigate. Understanding the unique regulations in your state, adapting your business model, and using the right tools will be critical to your success in this growing market. Remember that laws may evolve, so stay updated on local regulations to ensure compliance and continued success in the industry.


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