How to open a Dispensary in Colorado

How to open a Dispensary in Colorado:

What kind of cannabis business
When was cannabis made legal
Colorado’s marijuana market
License requirements
Financial requirements
How much does a dispensary make?
Timeframe
Links to consulting companies

Colorado is one of the states that spearheaded the medical cannabis movement in the United States. It has had medical cannabis since 2000, and as of November 2012, marijuana is allowed for recreational use as well. Colorado has a long list of qualifying conditions for medical marijuana. They include cancer, glaucoma, HIV/AIDS, hepatitis C, amyotrophic lateral sclerosis, Crohn’s disease, Alzheimer’s disease, cachexia (wasting syndrome), seizures, severe and chronic pain, severe nausea, severe or persistent muscle spasms, post-traumatic stress disorder, and many more.

Opening a marijuana business is very similar to any other type of business, but there are some things to keep in mind. Below is an in-depth look at what you’ll need to launch a successful cannabis business in the Centennial State.

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What kind of cannabis business can I open in Colorado?

All applicants for cannabis businesses should be 21 years of age or more and have a clean criminal record. The following businesses are legally allowed to operate within the state of Colorado:

Retail marijuana stores
Marijuana product manufacturers
Marijuana cultivators
Marijuana testing facilities
Marijuana distributors
Marijuana extraction services

When was cannabis made legal

Colorado legalized medical cannabis in 2000. In November of 2012, Amendment 64 legalized the possession and cultivation of marijuana by adults 21 and older for recreational use. Since then, Colorado has been a focal point for the marijuana industry in the United States.

Colorado’s marijuana market

As of May 1st, 2017, the number of Licensed Medical Marijuana Businesses in Colorado includes 520 centers, 776 cultivation centers, 250 infused product manufacturers, and 14 testing facilities. The number of Licensed Retail Marijuana Businesses consists of 479 stores, 667 cultivation centers, 257 product manufacturers, and 13 testing facilities.

License requirements

Starting May 1, 2016, the Denver Excise and Licenses is prohibited from processing new cannabis business licenses (including retail stores and cultivation facilities). Instead, applications for these license types at new locations will be accepted via a lottery process.

Applicants who wish to enter the licensing process will have to submit a completed application form, along with supporting documents and fees to the state’s Marijuana Enforcement Division. The MED will then file a copy with the Denver Excise and Licenses, who will review the validity of the submission. If rejected, applicants will receive a letter from Denver Excise and Licenses explaining the reasoning behind the state’s decision. In the case of a successful outcome, the applicant will be notified that they are approved to file a licensing application.

Colorado’s law allows counties and cities to set rules for growers and sellers. They’re even allowed to ban marijuana businesses if they choose. Be sure to check the local laws before you decide to open a business.

Financial requirements

Depending on location, costs for starting a marijuana business in Colorado can vary. Below you can find a detailed breakdown of all associated costs.

State fees:

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Retail Marijuana Store: $4,500
Retail Marijuana Cultivation: $4,000
Retail Marijuana Products Mfg: $4,000
Retail Marijuana Testing Facility: $2,000
Retail Marijuana Transporter (2-yr license): $4,900
Retail Marijuana Operator: $2,700
Affiliated Interest (that is not an IBIO): $200
Commercially Reasonable Royalty Interest Holder with more than 30%: $400
Commercially Reasonable Royalty Interest Holder w/less than or equal to 30%: $200
Permitted Economic Interest $400 Profit Sharing Plan Employee: $200
Qualified Limited Passive Investor – Limited Initial Background Check: $75
Qualified Limited Passive Investor – Full background for reasonable cause: $125
Qualified Institutional Investor: $200

Local fees:

Retail Marijuana Store: $2,500
Retail Marijuana Cultivation: $2,500
Retail Marijuana Products Manufacturing: $2,500
Retail Marijuana Testing Facility: $500
Retail Marijuana Transporter (2-yr license): $500
Retail Marijuana Operator: $500

How much does a dispensary make?

Marijuana dispensaries can make staggering amounts of money. Anywhere from $50,000 a year to tens of millions of dollars is a reasonable expectation.

Timeframe

It can take some time to launch a cannabis business, due to the amount of licensing involved. It is best to plan on needing at least a year, but it can take longer, especially when you consider, suppliers and employees.

Links to consulting companies that can help open a dispensary in Colorado

Looking to start a marijuana dispensary in Colorado? These companies can consult you on licensing requirements and applications and help you find tools for running and stocking your business.