How to Open a Dispensary

How to Start a Dispensary Step by Step with Startup Cost

Are you planning on opening a medical or recreational dispensary? If you have the permit, you can open your own dispensary store.

The dispensary business is a very good and profitable business to go into. A testament to the profitability of the dispensary business is the number of individuals who are trying to get into the dispensary business.

The medical dispensary business is a somewhat complicated terrain although a booming industry. To open a dispensary requires some level of planning and strategy for the business to succeed.

What is in a dispensary? How much does it cost to start up a dispensary? How much money can you make owning a dispensary?

The laws guiding running a dispensary are different across the states. There are some important points to consider before opening a dispensary.

These points and steps are important and should be followed in other to open a thriving dispensary in your state. The points and steps are:

  • Understand your State Laws
  • Understand the Risk
  • Understand your Market
  • Understand your Costs
  • Get a Location
  • Get your License
  • Get Products for your Dispensary
  • Run Adverts for your Dispensary

Step 1: Understand your State Laws

Like stated earlier, the medical dispensary business is a somewhat complicated one and has peculiarity across states.

To open a dispensary, one needs to clearly and carefully understand the laws in his/her state governing and guiding the medical dispensary business.

For a clearer understanding of the laws, one should contact the Department of Health Services in the state where they intend to open the dispensary to understand the laws and their applicability.

You will be required to obtain a permit and some other documents before you will be allowed to open a dispensary in your city or community.

Step 2: Understand the Risk

Every business involves a certain amount of risks. Opening a medical dispensary has its own risk. Understanding the risk is an important key to success.

The complexities around the laws across the states are one of the risks and part of the reasons why known big businesses have not yet fully embraced the medical dispensary business. One should not make any attempt to run the business contrary to the state stipulated laws as this will come at very serious consequences. Financial oversight is very important.

The risks of legislation and regulation should be appreciated and concise efforts made to run the business aboveboard.

Step 3: Understand your Market

Before opening a dispensary it is important to understand your market and the niche you will be operating in. Understand the trend in the market. You need to understand the various players in the market and their various roles.

You need to understand your customers, who are all supposed to be above teenage age. You should also understand your competitors and what they are doing as the dispensary business is a very competitive one.

Step 4: Understand your Initial Setup Costs

How much money do you need to open a dispensary? The dispensary business is a capital-intensive operation.

Ensure you have taken care of your sources of funding and capital to run the business.

Initial setup costs for the medical dispensary could range from $40,000 to $120,000 (US dollars) depending on the state. These initial setup costs go to such expenses like legal fees, consulting fees and application fee to open the dispensary.

Step 5: Get a Location

Get a location for your dispensary. The location for the dispensary should not contravene state laws for the location of a dispensary.

In most states, the dispensary is not located close to a school or worship center. Ensure your location has enough adult population to form part of your customers.

The location should also be convenient for your customers to access. In choosing the location, consideration should be made for the cost of rent and environmental concerns.

Step 6: Get a License

What licenses are needed to start a dispensary? Before you can open a dispensary you need a license, which will enable you to operate the dispensary. Usually, getting a license for a dispensary is not easy and the application can take some time.

The application also goes through some scrutiny. One seeking to open a dispensary should have some cash and all supporting documents ready to facilitate the application for a license.

Step 7: Get Products for your Dispensary

When you get your location and license, the next step is to get products for your dispensary. To get products for your dispensary you need to be in contact with the right suppliers.

There is need to emphasize the right suppliers because you should ensure that your product supplies come through legally approved channels.

Step 8: Run Adverts your Dispensary

Now that the dispensary is set, it is time to reach out and sell your products. Being a new dispensary and almost unknown, some level of marketing and advertising is required to inform potential customers about the existence of the dispensary and its products and services.

The marketing and advertising efforts of the dispensary should be focused and concentrated within the location where the dispensary expects the bulk of its customers to come from.


The dispensary business is indeed profitable and still growing. However, it has its risks and challenges and someone opening a dispensary should appreciate the risks associated with the business and ensure to run the business aboveboard.

Part of the success with opening the dispensary will come from working with the right team. The entrepreneur should be in contact with the right professionals to ensure the success of the dispensary.