How to Open a Dispensary in Massachusetts

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Massachusetts, one of the latest states to legalize recreational marijuana, is now accepting licensing applications to open dispensaries in the state. Applications will be reviewed on a first-come, first-served basis, but there is no limit on the number of medical or recreational dispensaries that will be allowed in the entire state. As a result, profits of the marijuana industry in Massachusetts are expected to increase dramatically by 2021. They are estimated to reach around $1 billion within five years.

Legalization in Massachusetts

Initially, legalization of cannabis in Massachusetts started in November 2012, when voters approved Question 3, making Massachusetts the 18th state to enact a medical cannabis program. Opening a dispensary or becoming a cultivation facility producer was limited to 35 sites. Out of 35 available licenses, only 15 were actually awarded. The state reopened the application submission process for the second time on June 29th, 2015 for non-profit organizations to apply for a Certificate of Registration to operate a Registered Marijuana Dispensary (RMD).

Finally, last November, Massachusetts became the first state on the east coast to legalize cannabis for recreational use.

As of now, there is no deadline on the application process. The department will review applications on a first-come-first-served basis. Unlike other states, applicants are not scored but reviewed and awarded a license based on their compliance with Chapter 369 and the regulations.

Number of Dispensaries Allowed

Medical: No limit. (12 open for sales. Just under 100 at earlier stages of application)

Recreational: 75 until October 2018, with no limit after that. If a city or town decides to limit the number, the first licenses will go to experienced medical operators, followed by a lottery for the remaining spots if any. None have been issued so far.

Potential Profits

In 2016 medical sales amounted to $100 million. This number is set to increase to 238.4 million by 2021. Adult use sales are projected to reach 929.3 million by 2021.

How much money is there in the dispensary market

How much money is there in the dispensary market – Image powered by Observer.com

 Opportunities for Cannabis Businesses

Massachusetts is open to Medical Marijuana Treatment Centers, also known as Registered Marijuana Dispensaries (RMD). RMDs are nonprofit entities that may obtain, grow, and dispense marijuana-related products. As of November 8th, 2016, this expanded to inlcude recreational marijuana businesses.

The regulations that went into effect December 15th, 2016 allow for:

  • Cannabis testing facilities
  • Cannabis product manufacturers
  • Retail cannabis stores
  • Cannabis cultivators

The state has not established an application process yet; however, recreational stores and facilities can apply for licenses in April 2018. The first permits are scheduled to issue in June. The first stores should open July 1st.

Massachusetts plans to issue the first set of licenses to applicants with the most experience operating medical marijuana treatment centers. After that, they will use a lottery among qualified applicants.

License Requirements

Licensing your cannabis business is different depending on its function. There are 4 types of licenses available: Cultivator, Manufacturer, Testing Facility, and Retailer (dispensary and delivery).

The standards for Massachusetts marijuana are the same as an alcohol licensee. Previous marijuana-related convictions won’t disqualify you from licensure. Growers should also be aware that the Cannabis Control Commission can institute an absolute cap on marijuana cultivation statewide.

There will be a maximum of 75 cannabis product manufacturers until October 2018 and a max of 75 cultivators until October 2019. When an application is received by the Cannabis Control Commission, they send a copy to the municipality in which the cannabis establishment is to be located. Whether the application is approved or rejected, the applicant will receive an official answer within a period of 90 days.

Financial Requirements

Application Fees

Recreational Businesses:

  • Initial Application fee: up to $3,000
  • License for retail marijuana store: $15,000
  • License for a marijuana cultivator: up to $15,000
  • License for a marijuana testing facility: up to $10,000

Medical Businesses:

  • Dispensary Stage 1 Application Fee: $1,500
  • Dispensary Stage 2 Application Fee: $30,000
  • Architectural review: $8.25 per $1,000 of construction costs, with a minimum fee of $1,500

Expected Profits for Me?

Marijuana dispensaries and delivery services generally bring anywhere from $50,000 a year up to millions. A well-run business can make tens of millions of dollars.

Time Frame

The time frame to start any kind of cannabis business varies – but at least a year is a good estimate. You will need time to secure finances, acquire necessary licenses, and source suppliers and employees.

Links to Consulting Companies in Massachusetts

Looking to start a marijuana dispensary in Massachusetts? These consulting companies can help. They provide a variety of services to get your business going – from assistance with state licensing requirements to running and stocking your business.

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