Welcome Colorado dispensary owner hopefuls and entrepreneurs. If you are reading this, you are likely interested in learning how to open a dispensary in Colorado!
I this article we will explore the steps you need to take to open a dispensary, licensing, funding, current legislation, and more! Let's dig in.
Since the legalization of recreational cannabis in Colorado in 2012, the cannabis market has grown in leaps and bounds, with sales topping off at $2.2 billion in 2021 according to the Colorado Department of Revenue.
With retail cannabis making up most of last year’s sales at $1.82 billion, it would be wise for any cannabis business to understand how to open a dispensary in Colorado, so where to begin? Well the first question is what does the legal landscape look like at this time?
Can I open a dispensary in Colorado 2022?
The answer is yes, you can open a dispensary in Colorado in 2022. The passage of Amendment 64 amended the Colorado constitution to allow the licensing of cannabis retail stores. However, state requirements apply to anyone who wants to work in the cannabis industry in Colorado, including opening a dispensary.
What are the stipulations of opening a dispensary in Colorado in 2022?
All applicants who want to open a dispensary in Colorado must:
- Be 21 years of age or older
- residents of Colorado for at least 2 years or married to someone who has been a resident of Colorado for at least 2 years
- Pass criminal background checks
- Not be employed by the local or State Licensing Authority
How do I open a dispensary in Colorado?
The first step to opening a dispensary in Colorado would be to ensure you are eligible for a license, acquire it, and then move forward with the rest of the process. The next recommended steps include building a cannabis business plan, hiring a consultant, and getting funding.
1 - Create a business plan
Your business plan should encapsulate the requirements for starting a dispensary in Colorado, for example:
- An available business name
- Projected expenses and potential revenue
- Market research and competitor analysis
- License application requirements
2 - Generate funding
Opening a dispensary is costly. It is, therefore, necessary to secure funding from reliable investors. The State of Colorado permits the generation of funding from individual investors, banks, and investment firms.
3 - Select a store location
The State of Colorado has limitations on where dispensaries can open. These zones are specifically away from schools and residential areas. It would help if you kept the state’s zoning limitations in mind while selecting a location for your dispensary.
4 - Apply for a license
To help with this step, you can download a copy of the Medical Marijuana Business License Application or Retail Marijuana Business License Application. Other documentation may also be required, like evidence of the premises to be licensed, copies of tax/wholesale license, and funding source disclosure.
What are the Colorado cannabis laws in 2022?
The Colorado cannabis laws in 2022 can be summarized by breaking regulations into two categories: The laws regarding the buying and selling of cannabis and the laws regarding the use and possession of cannabis. In this article, we will cover both.
What are the Colorado cannabis laws regarding the buying and selling of cannabis:
- You must be 21 and above
- You may only buy retail marijuana from licensed retail stores
- Only licensed retailers can sell marijuana products
- Retail marijuana businesses can only be open between 8am and midnight (precise timing regulations may differ locally)
What are the Colorado cannabis laws regarding the use and possession of cannabis:
- Adults aged 21 years and above can have up to 2 ounces of marijuana.
- Public use of marijuana in any way is illegal, this covers both indoor and outdoor public areas.
- Because marijuana is federally illegal, use of it on federal land, including national parks, national forests, and ski slopes, is prohibited.
- While use on private property is legal, property owners are allowed to ban the use and possession of marijuana on their properties—for example; landlords can ban tenants from using marijuana in rental homes.
- Employers can still test for marijuana and make employment decisions based on drug test results.
What type of cannabis retail license do I need to open a dispensary in Colorado?
Different types of cannabis retail licenses are available—for example, retail marijuana store licenses, retail marijuana cultivation licenses, and retail marijuana product manufacturer licenses.
If you want to open a dispensary in Colorado, you will need a retail marijuana store license, which is necessary for any business that sells medical or adult-use marijuana.
How do I get a cannabis dispensary license in Colorado?
The first step would be to ensure you meet all the earlier mentioned eligibility criteria to open a dispensary in Colorado. The remaining steps are laid out in this checklist:
- Download the regulated marijuana business license application form
- Include all applicable findings of suitability applications
- Pay the license application fee, available on the MED (Marijuana Enforcement Division) Fee Schedule
- Pay local jurisdiction fees
- Include any necessary supporting documentation
How much does it cost to open a dispensary in Colorado?
On average, opening a dispensary in Colorado will set you back anywhere from $150,000 to $2,000,000. With license application fees costing $7000, and $1800 for annual renewal, you are already spending almost $10,000 on licensing alone.
You should expect to spend about $250,000 on staff payroll annually. Depending on several factors, monthly rent rates may vary, but they are often between $3,500 and $10,000.
The remaining amount will cover advertising, security, and professional and legal service fees.
How can you keep your dispensary compliant in Colorado?
To help your dispensary to remain compliant with the State of Colorado’s compliance requirements, it is essential to acquire seed-to-sale software or a POS system that automatically fulfills these requirements and sends automated reminders to dispensary owners about updating licenses and permits.
The State of Colorado also has statutorily required resources like an educational resource, a marijuana concentrate advertising warning statement, and a universal symbol for packaging and labeling of all regulated marijuana, all of which must be acquired by any dispensary in Colorado.
What is the track and trace technology used in Colorado?
Like several other states, Colorado has adopted state-mandated track and trace technology to help authorities monitor cannabis from the point of cultivation to the point of sale to a consumer.
All MED-licensed retail cannabis businesses are required to use METRC as the primary track and trace system. Any business that fails to do so will have the privileges of their license revoked. \
What else do I need to know to open a dispensary and succeed?
Opening a dispensary is no small feat. From navigating government legal structures, to opening a retail store, there is a lot to cover. That being said, we live in the age of information, and everything you need is available at your fingertips, either online, or from an expert near you!
If you are looking to learn the in's and out's of opening a dispensary, the best place to start would be to check out the guide below where we cover every step you need to take from conception, to scale. You might also want to consider finding a cannabis consultant who can be your right-hand-person for the journey ahead. Best of luck to you!
If you want to learn more about how to open a dispensary in Colorado, check out our free guide below!
