The retail sector of the cannabis industry is growing as more states come online with legalization and the market expands to include more new cannabis-infused products. Opening a medical marijuana dispensary or a cannabis retail shop is a lengthy, rigorous, and expensive process; preparation and education about the requirements to open a dispensary and how to start a marijuana dispensary is essential, whether you live in Texas or elsewhere.
The Requirements to Open a Dispensary
The requirements to open a dispensary all depends on the state and city where the dispensary is licensed. However, many regulatory agencies do consider several of the same things, including your business and operations plan, security, storage, and location, to name a few. Typically you must have a complete business plan with an outline of property ownership, costs, business licenses, etc. It’s important to check the laws regarding cannabis legalization and licensing in your state and city to find out what the local requirements are.
How Much is it to Open a Dispensary?
The cost of opening a dispensary varies greatly by location, but you must also consider costs for compliance and licensing, security, and many other operational expenses that are much more highly regulated because they are in the cannabis industry. The cost of opening a cannabis dispensary ranges from $150,000 to $2 million. That includes estimates for key costs for annual staffing, rent, and up-front renovations. Like other investments, it is very important to do your research and make sure you have a well thought out plan and investment to carry you through opening a business in what is still an emerging industry.
How Much do I Need to Start a Dispensary?
The amount of money needed to start a dispensary greatly varies from state to state and location to location. It is a pretty safe bet that you will likely need to invest over $200k to get your dispensary ready for business, in addition to any rent amounts required by your landlord. There will be costs associated with the building itself, as well as with the regulatory bodies that govern the cannabis program in that particular city. As you obtain your local and state cannabis licenses, you may encounter some additional costs, including local approval fees or permits. For example, in the State of California, the state cannabis license fee is $1,000 and then the state cannabis annual fee is $4,000 – $72,000, depending on income.
How Much Does a Dispensary Owner Make a Year?
A dispensary owner’s salary all depends on the profits and income of the dispensary itself. It also depends on the amount of tax the dispensary must pay to the state on its net profit, as well as any permitting or other compliance costs. Because this is such a wide range of variables, it leaves for a wide range in how much a dispensary owner makes each year. According to Cannabis Training University, cannabis dispensary managers, those responsible for the daily business operations, earn on average between $60,000 and $150,000 per year.
I founded Comfort Solutions Cannabis Co. in May of 2018. Currently, my company focuses on the retail space of the medical dispensary without cultivation, but this may change depending on the bills that will be introduced here in the upcoming months of legislation. We want to provide the safest, highest quality products to our patients with their specific needs.
When I began my business plan, I realized that not only are Texas residents under-educated about cannabis itself, but the Endocannabinoid system, and the medicinal benefits this plant provides. Making sure people have access to this information is important.
How to Get a Grow License in Texas
It is only legal to grow industrial hemp in Texas, and it is governed by the Texas Department of Agriculture. You can apply online through their website. To apply for a grow license in Texas, you will need to have proper information prepared, such as location, security, and operations plan.
In order to obtain a license through the State of Texas, you must first have a business location. The catch-22 is how can you have a location confirmed without having a state license? It doesn’t add up. So, as a business owner, I recommend you focus on the cities that will be more welcoming to the cannabis industry. How do you do this? Here is what I have learned:
- Find a location that you vision your company in.
- Contact the Management company or owner directly who manages the site. Introduce yourself, explain your Mission statement and frankly ask if their owners are willing to lease to a medical cannabis dispensary. My most common reaction was, “No,” or “That is a great question. Let me call you back.” What intrigued me is that almost every commercial real estate agent called me back. I don’t think it was because they knew their owner would say no, but they, themselves are interested in this scope of the market and it is just not being talked about enough in North Texas, specifically. I have had many “yes” too, so don’t get discouraged.
- Once you confirm an owner is willing to work with you, contact the cities’ Zoning and Permit Department Director. Email them explaining your position in the industry, your intentions with your company, and request official Zoning Special Use permits.
- Don’t forget that most of these cities know about the Texas Compassionate Use Act, but it is not on their high priority to-do list of zoning. They know it’s an immeasurably valuable tax revenue resource, but, with the application process currently closed as of today, this is why it’s the time to reach out to your cities and request zoning.
- How to get the City department to follow-up with zoning requirements and not blowing it off: Reach out to the City Council. Introduce yourself here as well. Request to speak at their monthly Board meeting. Explain intentions and request a special use permit for your business.
Big Tip: Most City Council members are familiar with the TCUP, but not with cannabis in general. Your success with the city is contingent on being able to work directly alongside their City Council. Always remember they are your biggest ally in the success of your business; they just need to be educated. This is your job.
Note: This is an important process in the success of your company. Once you get State approval, you will then submit your permit application through the local cities’ Zoning department. This must be approved prior to confirming your space with the landlord or owner, so it is understood that by accomplishing this will expedite your ‘Opening process’.
Aside from this, in 2019, the Texas 86th Legislature passed HB 3703, which included additional ailments to our existing low THC-program of less than .5% THC. These ailments include ALS, seizure disorders, terminal cancer, autism, epilepsy, and a list of incurable neurodegenerative diseases. The State did approve of this expansion but did not provide additional applications for dispensary licenses.
As of Fall 2019, a person transporting hemp in the state of Texas must possess a hemp certificate from the state. Failure to have the certificate is a criminal offense. Possession of a forged certificate is a felony.
Is it Legal to Grow Marijuana in Texas?
It is legal to grow industrial hemp in Texas, it is illegal to grow THC producing marijuana unless you are included in the Texas Compassionate Use Act, which allows any board-certified specialist to prescribe low-THC cannabis to patients who have been diagnosed with epilepsy, multiple sclerosis, autism, ALS, terminal cancer, spasticity, and neurodegenerative disease. Otherwise, in Texas, drug penalties are separated into different penalty groups depending on the type of drug in question by the Texas Controlled Substances Act. The penalty groups include 1, 1-A, 2, 3, and 4. Marijuana is classified as a group 2 substance. In Texas, anyone caught with high-THC marijuana faces potential jail and/or a fine. Depending on the amount of marijuana and type you’re caught with, you could be facing life imprisonment over simple possession. Texas has some of the harshest penalties for marijuana and the highest arrest rates.
Texas Dispensary License Cost
It is difficult to gauge this number since there is no licensing yet in Texas, but one can assume it will be well over $200K if you consider compliance and rental costs. The current program requires our 2 existing practicing licenses here the requirement of a vertically integrated setup with a fee of $580,000, along with a renewal fee of $380,000 every two years.
To make sure you are ready for a license, here are some tips for the Texas cannabis community to consider:
- Make sure your operational procedures work and work well. Do your research and buy books, such as “Starting & Running a Marijuana Business” by Debby Goldsberry.
- Currently, Texas is a seed to sale state. This means you can only sell what you manufacture in-house. There is no transportation plan in place. Let’s face it, we know what amazing products are available in other states, but are not allowed to provide it to our Texas community, so make sure you understand what seed to sale means.
- Your attorney is your best friend. Make sure when obtaining an attorney they are very familiar with cannabis laws, not just in Texas but in all states. They need to actively be following these markets to ensure you have the best chance of not making a drastic innocent error.
- Research your trademark laws. As the cannabis industry booms, thousands of company names are entered every day. Trademark can apply not just to your company name, but to the design of your store and setup.
Are Dispensaries Legal in Texas?
Dispensaries are not legal in Texas (yet). There are retail stores allowed to sell CBD products, but they must be registered with the Texas Department of Health. The new Farm Bill requires retail stores planning to sell CBD products to register with the state’s health department. Texas stores may sell hemp products such as CBD oil if they contain less than .3% of THC. CBD oils of less than .3% THC are legal.
We have a lot of work to do here in Texas this next legislative session to expand ailments, THC cap, and additional licenses with reasonable fees.
If you are interested in joining the Texas Cannabis community as an entrepreneur, the time is now! North Texas Cannabis Group is located in the Dallas-Fort Worth metroplex and provides routine meetings, both macro- and micro-eventss. Texas NORML and Foundation for Informed Texas also provide a variety of resources.
So what’s the next step Texas? Get involved with local groups. Educate everyone you know. Vote. Begin your business plan. Take comprehensive educational courses. Most importantly, don’t get discouraged. The growing trend in the United States is moving in a positive direction for us, and the larger we stand together the more powerful we will be.
We grow better together. Onward!