In this article, we will take a closer look into the prerequisites of opening and owning a marijuana dispensary in Colorado.
Dispensary Laws in Colorado
Dispensary laws for opening a marijuana dispensary in Colorado are some of the most comprehensive ones out there because of the State’s maturity on the topic. The State dictates that for anyone to open a dispensary, they must:
- Be at least 21 years old
- Be a Colorado resident for the past two years, or should be married to someone who has been a Colorado resident for at least two years
- Not have any prior convictions with regards to possession or distribution of controlled substances within the last 10 years
- Be fully discharged of all felony convictions for at least five years
- Have a clean moral history. This will be determined by criminal records and a letter from your local police station
- Not be employed by the local or State Licensing Authority. This may include being employed by the sheriff or a prosecuting officer
These conditions also apply to the owner’s partners and employees. Retail marijuana dispensary operations must also keep the following in mind:
- Employees shouldn’t be allowed to use marijuana products. Employers can
- Test employees for drugs
- Make employment based on drug tests
- Use of marijuana on business property would be considered (illegal) public use, unless dedicated usage areas (enclosed) are maintained
- You can implement possession and usage policies stricter than State law, not more lenient
The Cannabis Market in Colorado
In August 2019, it was reported that Colorado surpassed its previous record of monthly marijuana sales, recording sales figures of over $173.2 million. Of these sales, 81.9% accounted for recreational marijuana sales ($141.87 million).
In 2020, however, in the wake of COVID-19 pandemic, Colorado citizens managed to crush the previous year’s record again. In August 2020, sales crossed the $200 million mark. Here is a graph showing how the market continued to grow from 2018; and is expected to do the same for years to come.
Because of Colorado market’s maturity, it is no surprise that there are a large number of marijuana dispensaries already in the market. The largest cannabis business in the State is The Green Solution with 21 locations to boast.
Other notable legal weed dispensaries include:
- Native Roots (19 locations)
- LivWell (15 locations)
- Green Dragon (14 locations)
- Starbuds (12 locations)
- Lightshade (8 locations)
- Oasis Cannabis Super Store
- Simply Pure
- Colorado Harvest Company
- The Clinic Colorado
- Verde Natural
- Smokin Gun Apothecary
- The Farm
- Maggie’s Farm
- Best Day Ever
With so many dispensaries in Colorado, the only way you can open a new marijuana dispensary in Colorado and get an edge over your competitors is with the service you provide or by serving an underserved niche.
You will have to rely on business efficiency to get the edge you need, i.e., by employing hard working employees, using connections, promoting good causes, using state-of-the-art software, and more.
How to Open a Dispensary in Colorado
Based on the eligibility criteria mentioned above, if you meet all of the State’s demands, you can move on to looking at other aspects of opening a dispensary in Colorado.
Step 1: Establishing Your Business
The state of Colorado’s office is currently accepting license applications, but the public can’t visit their office for more information yet because of the virus.
First order of business should be to make a business plan to educate your (potential) investors, team, and the State of Colorado. You’ll have to submit this plan when you’re ready to apply for a Marijuana Business License in Colorado.
Here are some of the basics that you need to keep in mind:
- Application fees. In 2021, the fee for Medical and Retail Marijuana Stores is $7,000. We’ll discuss this in detail in the following sections
- The licensing fee is payable every year, but not the application fee
- The same initial requirements are applicable to your employees and you
Step 2: Planning
In the planning phase, you’ll have to put together the detailed business plan we mentioned above. This is when you start forecasting your business, i.e., determining projected expenses, millstones, potential revenue, and more. Conduct extensive market research to ensure you know what you’re talking about.
You need to impress the state and investors, so write accordingly.
Step 3: Generate Funding
The business plan will help you give your investors a good idea of who you are. The State of Colorado allows funding secured from individual investors, banks, and investment firms alike.
Step 4: Property for Your Store
Colorado has specific zones in which marijuana stores can open. These zones are away from schools and residential areas. When considering a property to buy, make sure you check the State’s zoning plans as well.
Step 5: Time to Apply for a License
Once everything is ready, it’s time to apply for the license to open a marijuana dispensary in Colorado. Following is a table showing the fee structure applicable in 2021.
|License Type||Application Fee||License Fee||Total|
|Medical Marijuana Store||$5,000||$2,000||$7,000|
|Retail Marijuana Store||$5,000||$2,000||$7,000|
|Medical Marijuana Store – Renewal||$300||$1,500||$1,800|
|Retail Marijuana Store – Renewal||$300||$1,500||$1,800|
|Registration of Owner||$800||–||$800|
|Owner License Renewal||$500||–||$500|
|Registration of Employee||$100||–||$100|
|Employee License Renewal||$75||–||$75|
You can find the application form on the official Colorado state website.
Step 6: Setting Everything Up
After you have the license, all you have to do is set up your inventory, management systems, and other supporting systems. This includes buying furniture, inventory, building a robust supply chain infrastructure, setting up a point-of-sale system, and more importantly, an inventory management system.
Colorado’s mature cannabis industry means that it is much more thorough than most other states. The smallest of mistakes can therefore have huge impacts on your operations. To ensure everything is code-compliant and efficient, let Cure8 help you set your IT infrastructure up and build a solid foundation for your cannabis business.
Once all that’s done, all you have to do is launch!
Whether you’re simply mulling things over or have your eyes set on opening a marijuana dispensary in Colorado, let our experienced developers and advisors help you secure and streamline your processes. Get in touch with us and experience leading technology and security experts’ help!