State Medical Cannabis Dispensary Laws

State Medical Cannabis Dispensary Laws, Licensing And Taxes

November 4, 2019 0 Comment

State medical cannabis dispensary laws, licensing and taxes guide. Marijuana might not have found its legal status at the federal level, but some states have accepted its medicinal properties and allowed its use, possession and even cultivation exclusively, for medical purposes. Cannabidiol found in medical marijuana has been found to be effective in treating long-term symptoms of certain diseases like epilepsy, aids, Glaucoma, Cancer and several other chronic diseases. 

State Medical Cannabis Dispensary Laws

While medical marijuana has found legal status in around 33 states, yet there are fine lines of restrictions that are imposed on its usage and possession. 

Hence, each state has its own medical cannabis laws, which clearly define the limit on the use and possession of medical marijuana, including marijuana plants for cultivation. The dispensaries selling medical marijuana are also required to keep these limits in sync with their final sale. 

If not bound by these restrictive limits, then a patient or a caregiver, using or possessing marijuana beyond the bounds of restrictive limits, might be imposed with criminal penalties.

The table below will help to understand the medical marijuana laws passed in each state and the restriction limits imposed on possession and cultivation of medical marijuana.

The Table of State Medical Marijuana Laws

StateYear PassedLaw and Passed vote percentagePossession; cultivation limit
Alaska1998Ballot Measure 8(58%)1 oz usable, 6 plants (3 mature and 3 immature)
Arizona2010Proposition 203 (50.13%)2.5 oz usable per 14-day period; 12 plants
Arkansas2016Ballot Measure Issue 6 (53.2%)2.5 oz usable per 14-day period
California1996Proposition 215 (56%)8 oz usable; 6 mature & 12 immature plants
Colorado 2000Ballot Amendment 20 (54%)2 oz usable; 3 mature & 3 immature plants
Connecticut2012House Bill 5389 (96-51-H, 21-13 S)2.5 oz usable
Delaware2011Senate Bill 17(27-14-H, 17-4 S)6 oz usable
Florida2016Ballot Amendment 2 (71.3%)35-day supply
Hawaii2000Senate Bill 862 (32-18 H, 13-12-S)4 oz usable; 10 plants
Illinois2013House Bill 1(61-57 H, 35-21 S)2.5 oz usable per 14-day period
Louisiana2016Senate Bill 271(62-32 H, 22-14 S)30-day supply
Maine1999Senate Bill 6112.5 oz usable; 6 plants
Maryland2014House Bill 881 (125-11 H; 44-2 S)30-day supply
Massachusetts2012Ballot Question 3(63%)60-day supply (personal medical use)
Michigan2008Proposal 1 (63%)2.5 oz usable;12 plants
Minnesota2014Senate Bill 2470(89-40 H, 49-16 S)30-day supply of non-smokable marijuana
Missouri2018Ballot Amendment 2 (66%)60-day supply; 6 plants
Montana2004Initiative 148 (62%)1 oz usable; 4 mature & 12 seedlings
Nevada2000Ballot Question 9(65%)2.5 oz usable; 12 plants
New Hampshire2013House Bill 573(284-66 H, 18-6 S)2 oz of usable during a 10-day period
New Jersey2010Senate Bill 119(48-14 H, 25-13 S)2 oz usable
New Mexico2007Senate Bill 523 (36-31 H, 32-3 S)6 oz usable; 16 plants (4 mature & 12 immature)
New York2014Assembly Bill 6357 (117-13 H, 49-10 S) 30-day supply of non-smokable marijuana
North Dakota2016Ballot Measure 5 (63.7%)3 oz per 14-day period
Ohio2016House Bill 523 (71-26 H, 18-15 S)90-day supply
Oklahoma2018Ballot Question 788 (56.8%)3 oz usable; 6 mature & 6 immature plants
Oregon1998Ballot Measure 67 (55%)24 oz usable; 6 mature & 18 immature plants
Pennsylvania2016Senate Bill 3(149-46 H, 42-7 S)30-day supply
Rhode Island2006Senate Bill 0710(52-10 H, 33-1 S)2.5 oz usable; 12plants
Utah2018House Bill 3001 (60-13 H, 22-4 S)113 grams of unprocessed cannabis
Vermont2004Senate Bill 76 (22-7) HB 645 (82-59)2 oz usable; 2 mature & 7 immature plants
Washington1998Initiative 692 (59%)8 oz usable; 6 plants
Washington, D.C2010Amendment Act B18-622 (13-0 Vote)2 oz dried
West Virginia2017Senate Bill 386 (74-24 H, 28-6 S)30-day supply

With Medical marijuana getting legal, states have one more reason to rejoice and that is collection of taxes. Hence, before you jump into marijuana business, it’s important you understand your state tax liabilities.

 State Medical Cannabis Dispensary Taxes

While most of states have implemented a sales tax on the sale of marijuana, a few states have also put an additional excise tax on the sale of marijuana as well. For e.g. in Alaska, excise tax is applicable on sale or transfer of marijuana from the place of cultivation to the retail store or to the manufacturing facility.

Other than tax revenue, most of the state regulated medical marijuana dispensaries are imposed with application and registration fees, which usually are more than the regulatory costs. The table below shows the fees (application and registration) along with taxes in each of the legalized states in U.S.

State Medical Marijuana Application, Registration Fee & Applicable Taxes

StateApplication & Registration Fees                 Taxes
AlaskaNone for medical marijuana. Only adult use businesses are licensedNone on medical marijuana. $50/ounce excise taxes on flower buds (in adult use sales)
Arizona$5000-application fee, $1000-renewal fee5.6% sales taxes, along with local taxes
Arkansas$15,000-application fee for cultivation facilities$100,000-license & renewal of cultivation facilities$15,000-license fee for dispensaries$22,500-renewal fee for dispensaries
4%tax on sales, 6.5% standard state sales tax, plus local taxes apply
California$1000-application fee for testing labs, distributors & retailors$3000-$112,000-annual licensing fee for testing labs$1500-120,000-annual licensing fee for distributors$2500-$96,000-annual licensing fee for retailors(licensing fees will depend on the gross business revenue)$1205, $77, 905-annual license fee for cultivators$135-$8655-application fee for cultivators (fees will vary based on size and type of operation)
$9.25/ounce excise tax on flower, 15% retail excise tax, along with state sales and local taxes.Patients with government ID’s just pay excise taxes and not the sales taxes. 
Colorado$6000-$14,000-applicqation fee for medical marijuana centers$1000- application fee for infused product manufacturers$3000-$11,000-registration fee for centers$2200-registration fee for infused product manufacturers$3300-$11,300-renewal fee for centers$2500-renewal fee for infused product manufacturers2.9% state sales tax, plus local taxes
Connecticut$1000-application fee for dispensaries$25,000-application fee for producers$5000- permit and annual renewal fees for dispensaries$75,000- permit and annual renewal fees for producersMedical marijuana is not taxed
$5000-compassion center application fee$40,000-certification and biennial renewal feeOnly gross receipts, exceeding $1.2 million revenue are taxed
Florida$60,063-application fee for dispensing organizationsNo license renewal fee set6% state sales tax, with local tax (if any)
Hawaii$5000-application fee$75,000-initial licensing fee$50,000 license renewal fee$3000-testing facility certification fee$3000-testing facility certification renewal fee4% standard general excise tax (for most islands except Oahu, where it is 4.5%)
Illinois$5000-application fee for dispensaries$25,000-application fee for cultivation centers$30,000-license fee for dispensary$200,000-license fee for cultivation centers$25,000-annual renewal fees for dispensary$100,000-annual renewal fees for cultivation centers7% excise tax at wholesale level and 1% sales tax
Louisiana$450-medical marijuana pharmacy application fee$100,000-cultivator fees annually for the license ($100 annually for the license plus 7% of gross sales)
5% standard state sales tax
Maine $15,000-application fee$14,000-refunded amount to those who aren’t chosen$15,000-renewal fee5% sales tax and 7% meals and room tax on edible products
Maryland$6000-application fees for growers & processors$11,000-application fees for growers/dispensaries$5000-application fees for dispensaries$125,000-annual license fees for growers$165,000- annual license fees for dispensaries/growers$40,000- annual license fees for processors$40,000- annual license fees for dispensariesMedical marijuana is not taxed
Massachusetts$1500-stage 1 application fee$30,000-stage 2 application fee$50,000-license registration feeMedical marijuana sales are not taxed
Michigan$6000-application fee$10,000-$66,000-annual regulatory assessment fee3% excise tax at point-of-sale and 6% standard sales tax
Minnesota$20,000-manufacturer application fee$75,000-$100,000-annual fee rangeMedical marijuana sales are not taxed
Missouri $10,000-cultivation facility application fee$25,000-cultivation facility annual fee$6000-dispensary facilities application fee$10,000-dispensary annual fee$6000-manufacturing facility application fee$10,000-manufacturing facility annual fee4% retail sales tax
Montana$500-dispensary licensing fee (depends on no. of patients)
$1000-1-10 patients$2500-11-50 patients$5000-50 and more patients
2% on gross sales
Nevada$5000-medical marijuana facility application fee$3000-infused product facility certification fee$3000-cultivation facility certification fee$5000-independent testing lab certification fee$30,000-medical marijuana dispensary certification fee6.85-8.1% state & local sales tax, 2% excise tax for wholesale sales & 2% excise tax on retail sales
New Hampshire$3000-application fee$40,000-$80,000-payable in stages, as per the geographical areaMedical marijuana sales are not taxed
New Jersey$20,000- annual dispensary fee$2000-for unsuccessful applicants7% sales tax
New Mexico$1000-application fee for producers$5000-$30,000-annual producer fee5.125%-8.8675% gross receipts tax, depending on geographical location in state
New York$10,000-application fee$200,000-registration fee (2-year registration period)7% excise tax, 7% sales tax
North Dakota$5000-application fee(non-refundable)$25,000-licensing fee5% state sales tax, plus local tax (if any)
Ohio$20,000-Cultivator level I application fee$180,000-cultivator level I initial license fee$200,000-cultivator level I renewal fee$2000-cultivator level II application fee$18,000-Cultivator level II initial license fee$20, 000-Cultivator level II renewal fee$10,000-processor application fee$90,000-processor initial license fee$100,000-processor renewal fee$5000-dispensary application fee$70,000-dispensary biennial license fee$2000-testing lab application fee$18,000-testing lab initial license fee$20,000-testing lab renewal fee5.75% state sales tax, plus local taxes (if any)
Oklahoma$2500-application fee7% retail sales tax, regular sales taxes @ 4.5% plus local sales tax
Oregon$250-application fee$1000-annual license feeMedical marijuana sales are not taxed. Oregon also does not have a sales tax.
Pennsylvania$5000-dispensary application fee$10,000-license fee for growers/processors$30,000-for each dispensary location (with $5000 renewal)$200,000-for growers/processors ($10,000 renewal)Growers/processors pay 5% tax on medical marijuana sales
Rhode Island$250-application fee$250,000-annual registration fee4% surcharge& 7% state sales tax
UtahYet to be determinedMedical marijuana is not taxed
Vermont$2500-application fee$20,000-$30,000-annual feeMedical marijuana is not taxed
Washington State$250-producer application fee$1480-producer annual fee$250-processor application fee$1480-processor annual fee$250-retailor application fee$1480-retailor annual fee37% excise tax on sales at retail level
West Virginia$55,000- grower & processor application cum registration fee ($50,000 gets refunded in case of rejection)$12,500-dispensary application and registration fee ($10,000 gets refunded when application is denied)Dispensaries pay 10% sales tax

Hence, marijuana business in different states gets levied with varying rates of taxes (sometimes, sales, excise or even both). With marijuana industry, the rules, regulations and tax laws are conflicting at federal, state and local level. Hence, before embarking with a marijuana business set up, it’s best to consult the law and tax structure prevailing in your state, along with consulting a cannabis business attorney to understand the same.