How to Open a Dispensary in Colorado

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Colorado was one of the first states to legalize medical cannabis, back in 2000 (California being the first). Then in November 2012, Colorado became the first state in the US to legalize recreational cannabis. Colorado essentially began the tidal wave of legalization that has resulted in medical cannabis legalization in 29 states, and recreational cannabis legalization in 9 states and Washington DC. Opening a cannabis business is very similar to any other type of business, but there are some things to keep in mind. Below, we’ll take a look at what you’ll need to launch a successful cannabis business here in Colorado.

What Kind of Cannabis Business Can I Open in Colorado?

What kind of cannabis business can I open in Colorado

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All applicants for cannabis businesses should be 21 years of age or more and pass a criminal background check. The following businesses are legally allowed to operate within the state of Colorado:

  • Retail marijuana stores
  • Marijuana product manufacturers
  • Marijuana cultivators
  • Marijuana testing facilities
  • Marijuana distributors
  • Marijuana extraction services

Legalization in Colorado and the Cannabis Market

Colorado legalized medical cannabis in 2000. In November of 2012, Amendment 64 legalized the possession and cultivation of marijuana by adults 21 and older for recreational use. Since then, Colorado has been seen as a focal point, as well as an example of how cannabis legalization would look in the rest of the US.

As of May 1st, 2017, the number of officially licensed medical cannabis businesses in Colorado includes: 520 centers, 776 cultivation centers, 250 infused product manufacturers, and 14 testing facilities. The number of licensed retail businesses includes 479 stores, 667 cultivation centers, 257 product manufacturers, and 13 testing facilities.

License Requirements

Starting May 1, 2016, the Denver Excise and Licenses is prohibited from processing new cannabis business licenses (including retail stores and cultivation facilities). Instead, applications for these license types at new locations will be accepted via random lottery.

Applicants will have to submit their completed application, along with supporting documents and fees to the state’s Marijuana Enforcement Division (MED). The MED will then file a copy with the Denver Excise and Licenses, who will review the submission. If rejected, applicants receive a letter from Denver Excise and Licenses explaining the reasoning behind the rejection. In the case of a successful outcome, the applicant will be notified that they are approved to file a licensing application.

Colorado law allows both counties and cities to set rules for both growers and sellers. They’re even allowed to ban cannabis businesses if they deem it necessary. Always check your local laws before you decide to open a business.

Financial Requirements


Financial requirements

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Depending on the location, costs for starting a marijuana business in Colorado can vary. Below you can find a detailed breakdown of all associated costs.

State Fees:

  • Retail Cannabis Store: $4,500
  • Retail Cannabis Cultivation: $4,000
  • Retail Cannabis Products Mfg: $4,000
  • Retail Cannabis Testing Facility: $2,000
  • Retail Cannabis Transporter (2-yr license): $4,900
  • Retail Cannabis Operator: $2,700
  • Affiliated Interest (that is not an IBIO): $200
  • Commercially Reasonable Royalty Interest Holder with more than 30%: $400
  • Commercially Reasonable Royalty Interest Holder w/less than or equal to 30%: $200
  • Permitted Economic Interest $400 Profit Sharing Plan Employee: $200
  • Qualified Limited Passive Investor – Limited Initial Background Check: $75
  • Qualified Limited Passive Investor – Full background for reasonable cause: $125
  • Qualified Institutional Investor: $200

Local fees:

  • Retail Cannabis Store: $2,500
  • Retail Cannabis Cultivation: $2,500
  • Retail Cannabis Products Manufacturing: $2,500
  • Retail CannabisTesting Facility: $500
  • Retail Cannabis Transporter (2-yr license): $500
  • Retail Cannabis Operator: $500

What is My Expected Profit?

Cannabis dispensaries can make a great amount of money. Anywhere from 50 thousand a year to tens of millions of dollars is an accurate expectation.


It can take some time to launch a cannabis business, due to the amount of licensing involved. It is best to plan on needing at least a year, but it can take longer, especially when you consider, suppliers and employees.

Consulting Companies

If you’re looking to start a dispensary, or other cannabis business these companies can consult you on licensing requirements and applications and help you find tools for running and stocking your business.


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