Cannabis Dispensary

How Much Does It Cost To Open A Cannabis Dispensary In Your State?

October 15, 2019 0 Comment

As per statistical analysis of ArcView Market Research, a leading cannabis market research company, the marijuana industry is growing and is likely to touch 21.8 billion mark by 2020. Although, the industry is promising, one cannot ignore the number of hurdles that are posed on starting marijuana business. 

Right from opening a registered marijuana dispensary to running it successfully, every step requires a lot more than determination. It needs planning, a major part of which rests on financials. 

Every state, where marijuana has been legalized, demands a certain amount of capital requirement to start off with the idea of opening a medical or recreational marijuana dispensary. 

When considering cannabis dispensary business, we are sure that you have a lot of questions ran through your mind. Let’s take a look at what you need to know to get started. 

How much does it cost to start a dispensary?

  • What are the initial requirements to start-up a cannabis dispensary?
  • What is the application and licensing fees for cannabis dispensary?
  • What is the cost of cannabis dispensary PoS software and hardware requirements?
  • How much does it cost for day-to-day operations of cannabis dispensary?
  • How much does it cost for commercial rental agreement of legal cannabis dispensary?
  • What is the employee cost for a legal cannabis dispensary?
  • How much does it cost to implement security features in a cannabis dispensary?
  • How much does it cost to interior design and branding of a cannabis dispensary?
  • What is the inventory cost of a cannabis dispensary?
  • What is the marketing cost of a marijuana dispensary?

Let’s read on to gauge an idea about the financial aspect of starting a licensed marijuana dispensary.

Initial requirements to start-up a cannabis dispensary

To understand what are the initial requirements to start-up a cannabis dispensary is capital, read the below initial requirements list to gauge how the marijuana setup cost structure works in every state. Although, the standards for capitalization are more or less the same, yet each state has its own minimum criteria.

  • In Arizona, it’s a must to have $150, 000 as start-up capital (but the build-up costs of a medicinal dispensary touch at least a minimum of $250, 000 mark in the state)
  • $250, 000 in Nevada
  • $500,000 of liquid capital in Massachusetts
  • $150, 000 in Pennsylvania

Since Marijuana industry still doesn’t allow financial institutions and banks to extend financial services, including extending loans to retail dispensaries. So, the start-up funding is usually raised by owners in association with some third-party lenders or fundraisers. Sometimes, dispensary owners also stock up on bulk cash to raise the start-up capital. 

It’s good news for the cannabis industry, the House of Representatives passed a standalone marijuana reform bill for the first time in history on Wednesday, September 25, 2019. This Secure And Fair Enforcement (SAFE) Banking Act of 2019 protect banks that service the cannabis industry from being penalized by federal regulators.

However, there’s still a lot more than the basic start-up capital cost. 

Other initiation costs include application fees, licensing and registration fees, costs involved with inventory, space rental, security surveillance, interior costs, POS subscriptions, wages/salaries of employees, marketing and advertising costs. All these together shoot up the start-up cost of marijuana dispensary to a decent 6-digit figure ($150,000-$200,000). 

Let’s understand this with specific break ups.

  • $250, 000 towards wages/salaries of employees
  • $100,000 towards space rentals
  • $50,000 for renovations/interiors costs
  • A minimum of $5000 towards licensing/application fee 
  • $50, 000 towards security surveillance
  • $25,000 towards business equipment like POS subscriptions (both hardware and software)
  • $1500/lb towards products/inventory
  • $25,000 for marketing and advertising and 
  • $150, 000 towards the basic start-up capital requirements

Application and licensing fees for cannabis dispensary

Like start-up capital, licensing fees also differs in every state. Plus, if the dispensary owners show interest in growing the weed, then they will need to get an additional cultivation or producing license along with a cannabis retail one. The dispensary license needs to be renewed on an annual basis to keep up with the smooth flow of operations. This also is different as per each state.

  • $150 in Louisiana along with $5000 of application fee
  • New Jersey applicants pay a whopping figure of $20,000
  • In California, $1000 to apply for license and again anywhere between $4000-$120,000 if approved
  • In Oklahoma, the license fee is around $2500
  • The application fee in Missouri, for a medical marijuana licensed dispensary is $6000 (non-refundable) and $10, 000 for its annual license renewal fee.
  • Applicants in Nevada pay somewhere around $3000 towards license renewal alone
  • In Arizona, $5000 is the licensing fee and
  • In Connecticut, an enormous amount of $75, 000 is charged for the same, in addition to $25, 000 for the application

Hence, taking an average of the varying rates across all marijuana legalized states, one will have to park a minimum of $5000 alone for license application alone. Not to mention the non-refundable license fee, which will range anywhere in between $1000-$10,000.

The cost of cannabis dispensary POS software and hardware requirements

One of the imminent features and success factors behind a flourishing cannabusiness is its POS software and hardware. A decent POS will range anywhere in-between $250-$500. However, a higher price range, doesn’t guarantee an efficient business.

An efficient POS should be marked with features like 

  • Managing inventory
  • Processing cash inflow and outflow
  • Streamlining important in-house dispensary operations
  • Maximize sales 

However, while all these features are provided by most of the top POS service providers like Cova, BiotrackTHC, Flowhub, IndicaOnline etc., none of them go beyond the sales. 

Zencanna Cannabis Dispensary PoS Software

Presenting Zencanna, first of cannabis POS kind, to provide easy and seamless sales and tax automation. The Zencanna POS software and hardware integrates with Intuit QuickBooks, Xero, metrc, BioTrackTHC, LeafDataSystems, webHooks, CashVault, mPOP etc. to bring the best of both regulatory and tax compliance. 

When talking about compliance, ZenCanna provides compliance as in

  • Full state integration, making cannabusiness 100% tax compliant.
  • Sends updated and accurate tax rates, specific for each state and local jurisdiction
  • Provides holistic view into everything from historical tax filing data to the current filings.
  • Automates filing and remittance, putting all the preparation, submission and sales and tax filings into autopilot mode.
  • Provides pre-filled accurate tax forms to facilitate the e-tax filing process. The software even provides the option of doing the same, with due payments and reports.

While the leading POS providers offer their services through adequate software and hardware, in the starting price range of $200-$500, only Zencanna Cannabis POS offers with a starting, affordable price bandwidth of just $99. 

The POS is replete with appropriate integrations to cater to the automated tax calculation and e-filing services of a cannabusiness, along with fulfilling the basic operations of organizing and conducting the day-to-day business operations of a marijuana dispensary store. 

Zencanna’s unique tax compliance POS is equipped to handle all the players in the cannabis industry, which include

  • Cultivators/growers
  • Manufacturers/distributors/wholesalers
  • Dispensaries, both medical and recreational

Cannabis dispensary day-to-day operational costs

The following breakup, will help you gain an idea of some of the primary operational costs and how much to expect from them.

  • Cannabis Dispensary Leasing or Commercial Rental Agreement Cost

When hunting for a space rental or property for marijuana dispensary, it’s important to look at a property, which meets compliance as in the designated distanced gap from school, religious institution or even residential zone (Apart from this, the place has to be convenient for potential customers. 

Usually, the rentals for marijuana dispensaries are state specific and vary drastically with locations and states. Annual real estate costs might run into anywhere in between $50,000-$100,000. Into this if you add security deposit into the amount, it is a neat $150,000.

  • Cannabis Dispensary Marketing Cost

Just like any business, marijuana dispensaries will also have to vest a solid marketing plan for its online and offline presence. Right from designing a marketing campaign to website design, development and hosting plans, everything will have to be planned for a successful business.

Usually, for any marijuana start-up, marketing costs run around $25,000-$70,000 (this includes advertising as well). Higher marketing costs, better to create a strong customer base. Into this add another $2,500 for website design, development and hosting for the dispensary’s online presence.

  • Employees Cost for Cannabis Dispensary

Cannabis industry has successfully helped in generating a lot of employment opportunities. To pay employees their wages, it’s important to park an amount, which will suffice for at least a couple months of wages, without disrupting the operations.

When talking about employees, you need to include wages right from those of the director, managers to budtenders and security guards. Usually the corpus that should be parked for wages/salaries for all these range of staff, can be around $250, 000 on an annual basis.

  • Cost to Implement Security Features in Cannabis Dispensary 

Security and surveillance are of paramount importance in marijuana dispensaries. Be it because of heavy dealing in cash or due to legal issues revolving around its sale and purchase, security has to be upright, at all times. 

For the sake of this, its crucial that marijuana dispensaries invest in substantial security and surveillance to avoid any kind of risks associated with the business. $50,000 is the basic cost for security structuring in a marijuana dispensary.

  • Cannabis Dispensary Interior Design & Branding Cost

Displays and interiors in a marijuana dispensary are crucial in building business. That’s why investing on interiors is something most of the dispensaries are doing consciously these days. However, like everything else, this too has some cost associated. 

Like mentioned earlier, a minimum of $50, 000 goes into re-modelling a space into a suitable marijuana dispensary, which matches the regulatory requirements and of course one’s brand image. 

  • Inventory cost for cannabis dispensary

Opening a dispensary will need a substantial cost segregation for the inventory or the cannabis. As a retailer, you will buy the weed in bulk, by the pound, which in itself is an expensive affair. 

Going by the trend of pricing, each pound of the week hovers by $1, 500/lb. Although market prices are volatile, but taking this price as benchmark will be safer bet. Considering the size or capacity of weed that as start up you plan to sell, it’s crucial to have this as a baseline, not to mention some buffer for inventory spoilage.

Based on the baseline mentioned above, around $70,000 is the rough estimate that one should park for inventory and packaging supplies (including labels). 


In this article we have given a rough idea and estimate of the major operational costs for opening a marijuana dispensary, but still there are a lot of smaller miscellaneous expenses that remain uncovered. 

All in all, taking all kinds of expenses into the picture, including the start-up capital and licensing fees as well, it would be advisable to have at least $300,000 of assets (the proportion of liquid assets would vary according to your state) as a starting point.

Since funding part of a cannabis business remains a struggle, it’s wiser to approach the right fund raisers for funding requirements. The faster you get hold of your financials, the faster you will be able to take advantage of the ever-growing cannabis industry.

About Zencanna PoS Software

For dispensaries, the hardest part in the business is to understand is the taxation. Yes taxation is a complex matter, but we will help you in cannabis tax compliance needs with Zencanna tax automation PoS software.

It will automates cannabis tax calculations and tax filings based on your dispensary locations. Zencanna dispensary PoS software maximize your profit returns by minimizing your tax burden, while also reducing the time you must commit to your tax compliance and reporting obligations. Schedule a free demo or call us on: 1-877-811-3829.