Research and Planning

Most states and provinces actively maintain a checklist of sorts on their official websites that details how the application process works, which you’ll definitely want to take a look at. Generally speaking however, the four most important first steps in opening a dispensary, no matter the location, can be boiled down to finding your location, making sure you’ll get your license, raising your initial capital, and drafting a solid business plan. The following are brief overviews of each step to help you plan. Be sure to research your local laws and regulations, as important details will vary from one state and province to the next, and local city bylaws can have a significant impact.


cannabis dispensary license application requires a prospective physical 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 locked down. 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. Chapter 7 of this 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.


Ultimately, no license equals no dispensary, so this is an excellent place to begin your research. Work with an attorney and perform 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, Oklahoma, Washington, Missouri, Michigan,Illinois, Nevada, Montana, 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).


Simply put, no bank is going to approve a business loan to a cannabis dispensary. You can’t go to the 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 require 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.

Business Plan

Business Plan and Research for opening a cannabis dispensary

Your business plan is by far the most important document that you will need to draft; you will use it to help secure financing, and to demonstrate to the authorities that your operations plan satisfies their legal requirements, among other things. Your plan will cover finding and developing the location you intend to use, how you source your flower, the operations of your dispensary, your financing, how you intend to handle security, your planned contributions to the community such as a commitment to hire locally, wages to be paid, and all other essential strategic elements.

You may want to consider hiring a professional consultant to help walk you through developing your business plan. In Chapter 3 we’ll take a closer look at the individual components of a good dispensary business plan.

Next, let’s learn about the licensing and application process in Chapter 3.