Frequently asked questions about licensing for retail marijuana stores or dispensaries
What licenses, permits, and registrations are required for a retail cannabis dispensary?
If you operate a retail cannabis dispensary, you may need to obtain the following licenses, permits, and registrations:
- Secretary of State registration: Register with the Secretary of State when forming your business or if you are an out-of-state business.
- Employee Identification Number (EIN): Issued by the IRS, an EIN is also known as a Federal Tax Identification Number and is used to identify a business entity.
- State sales tax permit
- Doing Business As (DBA) registration: If you plan to operate under a name that is different from your legal business entity name, you are required to file a DBA (doing business as) with either the state or local jurisdiction. A DBA is also referred to as an “assumed name”, “fictitious business name” or “trade name”.
- State-issued cannabis business license
- City-issued cannabis business permit
- General business license: A general business license (sometimes called a privilege license) may be required from each city and/or county in which your business will be operating.
- Zoning permit: Your business may need to provide a proof of zoning from the local municipality allowing a cannabis retail dispensary business.
- Certificate of occupancy: A certificate of occupancy states a legal use and/or type of permitted occupancy of a building
- Alarm permit: Many cities, police departments, and fire departments require alarm system users to obtain an alarm permit.
Who is eligible to sell retail marijuana?
Different jurisdictions have different eligibility requirements, but most tend to agree that applicants must be, and employ, persons of at least 21 years of age with no history of felony convictions (except for states that have social equity conditions).
States may also have a residency requirement. In Alaska, all persons with a direct or indirect financial interest must be Alaska residents.
What is the dispensary license application process?
When you apply for a license to sell recreational marijuana you can expect to undergo background checks, state inspections of your facilities, and an audit of your business plan. Typical attachments to the application may include a Certificate of Good Standing from the Secretary of State, floor plans of the marijuana facility, a tax bond, and Articles of Incorporation or a Partnership Agreement if applicable.
How much does a dispensary license cost?
After background check , fingerprinting, inspections, application, and other fees, the cost of the state license will likely be around several thousand dollars. For example:
- California: $1,000 (application fee), $2,500 - $96,000 (license fees based on gross annual revenue)
- Colorado: $5,000 (application fee), $2,440 (retail marijuana store license fee)
- New Mexico: $2,500 (annual license fee for cannabis retailer license)
License/permit fees at the local level can also vary. For example:
- San Francisco: A city cannabis permit application costs $2,000, plus $3,000 for each cannabis activity.
- Denver (all retail license types): $5,000 (non-social equity licensees) and $2,500 (social equity licensees).
- Albuquerque (cannabis retail location): Cannabis Retail Location Approval has no fee (as of Sept 2022). Permit fees have not yet been determined for cannabis establishments selling pre-packaged edible cannabis products.
Do employees need to be licensed to work in a cannabis retail store or dispensary?
Employees must usually be at least 21 years old and pass a background/criminal check. (Felony convictions may disqualify them, such as recent drug offenses or violent crimes.)
Some states require that any employee who works for a cannabis-related business be licensed or registered. For example:
- Colorado: Any person who possesses, cultivates, manufactures, tests, dispenses, sells, serves, transports, or delivers Regulated Marijuana, who is authorized to input data into a Regulated Marijuana Business’s Inventory Tracking System or point-of-sale system, or who has unescorted access in the Restricted Access Area or Limited Access Area must hold an Employee License.
- Nevada: All employees, contractors, volunteers, owners, officers, and board members of a cannabis business must always carry a current cannabis registered agent card while at a facility.
- California: Employees are not required to obtain a special license to work in the industry. However, some cities may require special work permits for employees to work in cannabis establishments.
CT Corporation can help
Outsourcing business registration and license research, applications, management, and renewals can help you take the pressure off internal resources. By working with a full-service management provider who specializes in the efficient processing of business licenses you can free up your time to focus on starting and growing your retail marijuana store or dispensary while ensuring you keep up with changing compliance requirements.
For more information on CT Corporation services and how we can streamline your business licensing, please contact us.
