How to Open a Dispensary in New York

The foundation of any successful cannabis venture begins with a comprehensive understanding of the laws and regulations governing the industry. So here’s a quick recap on New York’s path to legal, recreational cannabis retail stores.

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In March 2021, New York Governor Andrew Cuomo signed the Marijuana Regulation and Taxation Act (MRTA) into law, legalizing adult-use cannabis. Under this legislation, the Cannabis Control Board was established to oversee the industry's regulatory framework.

If you have been keeping up with cannabis legalization, you may have heard about Conditional Adult-Use Retail Dispensary licenses. CAURD licenses will amount to at least 50% of the adult-use cannabis business licenses to be awarded in New York and up until 2023, were the only way to legally sell recreational cannabis.

This has since changed, and New York is now accepting applications through the general Adult-Use Retail Dispensary License.

There are several small differences between the CAURD licenses being phased out and the general dispensary licenses but the main difference is that now applications are open to the general public while before, CAURD licenses were only available to justice-involved individuals (people and communities disproportionately affected by cannabis prohibition) who owned at least fifty-one percent (51%) of the business.

You can still apply as a Social and Economic Equity (SEE) applicant if you meet all social equity eligibility requirements and submit a competitive application.

The other big difference is the application and license fees. Since the new applications are for the general public, the fees have been increased proportionately — $1,000 as the adult-use application fee and $7,000 as the dispensary license fee.

These fees are reduced by 50% for SEE applicants.

The Cannabis Control Board will oversee the licensing process, and it's essential to ensure you meet all the requirements outlined in NY cannabis regulations.

Here are the 5 key steps to successfully applying for a New York dispensary license:

Start by gathering all the necessary documentation and information required for the application, including detailed financial records, business plans, security plans, operational protocols, and compliance measures — more on this later.

Engaging with the local community is crucial for a successful dispensary application. Demonstrate how your dispensary will benefit the community by:

• creating jobs
• offering educational programs
• supporting local initiatives.

Collaborating with local leaders and organizations will build positive relationships and the votes of confidence will strengthen your application.

One of the most important parts of any application is having a comprehensive security plan that outlines measures to prevent theft, ensure employee safety, and maintain compliance with New York state regulations.

This plan should cover surveillance, access control, cannabis inventory tracking, and product storage. Most importantly, choose a dispensary tech stack that is fully compliant with the state of New York — like Cova POS.

Also Read: What is an Essential Dispensary Tech Stack.

New York's cannabis legislation emphasizes social equity, aiming to address the historical injustices caused by cannabis prohibition. If you are a SEE application, you'll need to outline how your dispensary plans to contribute to social equity and community development.

This may include partnerships with local organizations, employment opportunities for affected communities, and initiatives that promote inclusivity. Learn more about the NY Social and Economic Equity Plan here.

Once your application is thoroughly prepared, submit it on the online application portal on the New York State Business Express (NYBE) during the designated application window. Adhere to all submission deadlines and requirements to ensure your application is considered.

Editor’s Note: As of the time of writing, October 10, New York Adult-Use Licensing applications are closed. The last batch of applications was the initial Queue 1 from December 2023. It’s unclear when the next application window will open — more information can be found on the Office of Cannabis Management website.

All cannabis business license applications are in-depth, but the retailer license is especially comprehensive. To have the best shot at success, you need to start thinking about your organizational structure, finances, day-to-day operations, and marketing long before you file the actual application.

This is what the rest of this guide covers — the operational side of opening a cannabis dispensary in New York, or in other words, the business plan for your cannabis business.

Editor’s Note: For a comprehensive review of New York marijuana laws, check out our dedicated New York Cannabis Law page where we dive much deeper into the application process and answer the most common questions on dispensary operations and regulatory requirements.

Many people incorrectly assume that the first step to opening a cannabis dispensary in New York is applying for an adult-use retail license — when it really starts with creating a robust business plan.

A well-structured cannabis retail business plan should cover market analysis, competitive analysis, target demographics, marketing strategies, operations plan, and financial projections. A robust business plan not only demonstrates your dispensary's viability to potential investors and lenders but also provides you with a clear direction for achieving your goals.

Unsure where to begin? Here are three questions that every cannabis dispensary owner should ask themselves:

Feasibility: Is my dispensary a good market fit?

New York is big — with nearly 20 million residents and a thriving tourism industry, the state has immense potential for cannabis business owners. In fact, the projected market size for adult-use cannabis in New York is estimated to reach several billion dollars annually.

Also Read: How Much Money Does a Cannabis Dispensary Owner Make?

But you still need to do your due diligence to identify and understand the market gap your dispensary will fill. Being familiar with your store location and its people helps — but it’s not enough — you also need to familiarize yourself with ongoing business, regulatory, and financial developments.

For instance, New York wrapped up its inaugural Cannabis Grower’s Showcase (CGS) earlier this year. No doubt, the CGS will become a great way for cannabis businesses to promote and sell their products directly to consumers. But could your dispensary make use of it?

The landscape is constantly changing and staying up to date with such developments and integrating plans into your cannabis business plan will go a long way in growing and improving your bottom line.

Finances: How much does it cost to open a dispensary?

New York is one of the most expensive places in the world. Unsurprisingly, operating a cannabis dispensary can be significantly costlier compared to the rest of the country. As a potential dispensary owner in New York, you should anticipate allocating a sum ranging from $400,000 to over $1 million to launch and manage a cannabis dispensary.

Here are some of the major expenses can expect to spend in your first year:

• Application & License Fee: $8,000 - $12,000*
• Staffing & Payroll: $120,000 - $250,000
• Equipment & Tech: $40,000 - $70,000
• Leasing/Real Estate: $80,000 - $430,000

These costs can fluctuate significantly depending on your location and business scale. Real estate in particular is a major factor in New York, with retail space running anywhere from $128 to $393 per square foot – prime locations can push those numbers even higher.

*An additional $2,000 for the Limited Retail Consumption Facility (LRCF) license to have an on-premises consumption area.

For a full breakdown of startup costs, read The True Cost of Opening a Cannabis Dispensary in New York.

Profitability: What's the revenue potential for a New York dispensary?

A central theme of New York’s legalization push was social equity. As such, the state has provided numerous schemes and educational resources — some that provide a tangible, monetary benefit to your dispensary and others that help you navigate the legal and regulatory requirements.

The most prominent of these schemes is the Social Equity and Economic Plan.

The SEE provides opportunities to communities disproportionately affected by past cannabis prohibition. By actively participating in social equity programs, you can contribute to a more inclusive industry while benefiting from priority licensing.

With a business plan in hand and a good idea of the financial investment required, your next job is to secure funding for the different aspects of opening a dispensary, including real estate, construction, staffing, inventory, and marketing.

To attract investors and lenders, your financial projections should be realistic and based on thorough market research.

Also Read: Cannabis Dispensary Financing, Funding, And Loans

Based on your requirements, you may explore funding sources, such as private investors, venture capital, and crowdfunding platforms, as traditional funding sources may not be available to you due to the federal status of cannabis.

However, that might soon change with the DEA getting closer to potentially rescheduling marijuana and opening up banking services to cannabis businesses.

Before you can submit your license or secure funding, you’ll be asked for a detailed plan on how you’ll bring your vision to life.

This includes choosing a suitable location, designing an appealing and functional retail space, partnering with the right technology provider, and ensuring compliance with state regulations.

When finding the perfect location for your dispensary's success, consider factors such as foot traffic, proximity to other businesses, accessibility, and local demographics.

More importantly, ensure that the chosen location complies with zoning regulations and aligns with the state's requirements for dispensary proximity to schools and other sensitive areas.

The interior design and layout of your dispensary play a significant role in creating a welcoming and customer-friendly environment. Design your space to accommodate different customer preferences, provide easy navigation, and showcase your product offerings effectively.

To go a step further and stand apart from other stores, consider incorporating educational displays that inform customers about different cannabis strains, product types, and consumption methods.

Curate a diverse and high-quality product menu to cater to various customer preferences. Work closely with licensed suppliers and distributors to maintain a consistent inventory of cannabis products, accessories, and related merchandise at your NY dispensary.

To tie it all together in an effective package — implement an efficient inventory management system that tracks sales, monitors stock levels, and ensures compliance with state regulations.

Compliance with state regulations is non-negotiable. Implement strict security measures, including surveillance cameras, access control systems, and alarm systems, to safeguard your products and ensure employee and customer safety.

Regularly review and update your security protocols to stay current with industry best practices and any regulatory changes in New York, while ensuring you use compliant cannabis software.

It’s 2024 (about to be 2025) — it’s impossible to run a retail store without good technology.

Your inventory management platforms, point-of-sale systems, compliance software, etc should all be optimized for a cannabis dispensary and its unique requirements.

Go one step further and get a New York-compliant dispensary POS system for easy integration with BioTrack, New York’s official cannabis track and trace system, and additional features such as:

• compliance reporting
• record accuracy
• advanced sales tracking
• inventory control
• real-time monitoring and reporting of dispensed marijuana

Hiring a knowledgeable and customer-centric team is essential for the success of your dispensary. Hire individuals with a passion for cannabis, strong customer service skills, and a commitment to the unique NY marijuana culture.

Put together a plan for comprehensive and regular training on product knowledge, customer interactions, and regulations to ensure a seamless customer experience.

Local regulations around marketing and advertising cannabis products can be murky with traditional advertising options severely restricted for cannabis businesses. That said, you can still promote your brand through:

Digital marketing: Build a user-friendly website with integrated menus and implement cannabis SEO strategies to reach your target audience effectively.

Social media: Use social media platforms to share educational content, post product highlights/updates, and engage with potential customers to foster an online community.

Community engagement: Participate in local events, support charities, and collaborate with neighboring businesses to build a positive reputation within the local community.

Educational initiatives: Host workshops and informational sessions about strains, consumption methods, and responsible use to position your dispensary as a trusted source of information.

Opening a cannabis dispensary in New York, like most states, starts with obtaining the relevant New York retail cannabis license but it doesn’t end there.

From understanding the cannabis regulatory framework and the application process to finalizing financial requirements, and operational strategies and developing a strong marketing strategy, cannabis business owners have their work cut out for them.

One thing that can make all the difference is partnering with a New York-compliant cannabis technology provider like Cova.

As a dispensary Point of Sale, Cova is loved by dispensaries across North America including New York, thanks to advanced features including:

• Cashless payment solutions and integrated eCommerce help retailers grow their business
• Advanced inventory tracking and seamless traceability reporting to help New York retailers meet cannabis license requirements
• Intuitive sales tools that are easy to use, making it easy to train new budtenders and serve customers efficiently

To top it all off, Cova’s vast ecosystem of integrations includes leading tech partners in the cannabis industry, like Leafly, Weedmaps, Headset, KayaPush, SpringBig, and many more.