How to Open a Dispensary in Colorado

Overview

Are you wondering how to open a dispensary in Colorado? We will provide the most recent news and details about launching a cannabis dispensary in the state on this page, along with valuable insights about what will happen next.

Cannabis has been legal for medical use in Colorado since 2000. In November 2012, Colorado approved Amendment 64, making recreational use legal for adults. To use, buy, or possess recreational marijuana in the state, you must be 21 or older. Adults can gift up to 2 ounces to another adult, but selling is not allowed. Only licensed cannabis dispensaries are allowed to sell recreational marijuana in Colorado. 

Colorado’s 2023 legislative session concluded on May 8, 2023. The session saw several positive developments for cannabis-related proposals with these bills signed to law:

• House Bill 1021 gives the Department of Revenue’s executive director the authority to take actions, including destruction, to protect public health by managing marijuana. 
• House Bill 1279 aims to remove the ban on online sales of retail marijuana, allowing them. 
• Senate Bill 199 addresses license refund policies and permits license renewal under specific conditions.
• Senate Bill 265 safeguards professionals in Colorado by preventing license denial solely due to marijuana-related activities. 

Starting from August 7th, 2023, Colorado has officially authorized online sales of marijuana, introducing a fresh means for customers to purchase cannabis. This development follows two months after Governor Jared Polis (D) signed the legislation (HB 23-1279) allowing online sales into law. The legislation amends state statutes by removing the prohibition on selling cannabis on the internet and concurrently introduces regulations to govern online commerce.

Local Cannabis Restrictions & Laws

Marijuana laws for adults differ depending on where you are. It’s crucial to review local rules for the latest updates.

In Colorado, where marijuana is legalized, there are specific regulations:

• Federal lands, which make up 28% of the state, prohibit the use of marijuana. This includes areas like ski slopes, national monuments, and parks.
• You cannot consume marijuana in public outdoor spaces such as parks and streets.
• When staying in private accommodations like hotels, B&Bs, cabins, or vacation rentals, you must obtain explicit permission from the property owner to use marijuana.
• When in a car, even as a passenger, it’s essential to keep marijuana products sealed and stored in the trunk while driving.

Medical Marijuana Legalization

On November 7, 2000, 54% of Colorado voters approved Amendment 20, which amended the State Constitution to allow the use of marijuana in the state for approved patients with written medical consent. Under this law, patients may possess up to 2 ounces (57 g) of medical marijuana and may cultivate no more than six marijuana plants (no more than three of these mature flowering plants at a time).

As of April 2023, there are 69,430 Patients who have an active medical marijuana registration according to Colorado Department of Public Health and Environment.

Medical Marijuana Business License Types

• A license for a Medical Marijuana Store grants the holder the authority to sell Medical Marijuana exclusively to patients registered in the Colorado Medical Marijuana Registry, as well as Transporting Caregivers.
• Holding a Medical Marijuana Cultivation Facility License permits the holder to cultivate and harvest Medical Marijuana.
• With a Medical Marijuana Products Manufacturer License, the holder gains the privilege to manufacture Medical Marijuana Products, with wholesale distribution limited to MED licensed Medical Marijuana Centers.
• The Medical Marijuana Testing Facility License allows the operation of a facility dedicated to testing the potency and contaminants of Medical Marijuana, as well as conducting research for MED Medical Marijuana business licenses.
• A Medical Marijuana Transporter License grants authorization to the holder to provide transportation and temporary storage services exclusively to MED Licensed Medical Marijuana Businesses.
• Possessing a Medical Marijuana Business Operator License enables the holder to offer professional operational services to one or more MED Licensed Medical Marijuana Businesses.
• A Medical Marijuana Research and Development License allows the holder to grow, cultivate, possess, and transfer marijuana exclusively for research purposes.

Recreational Use/Adult Use Legalization 

On November 6, 2012, Colorado voters made history by legalizing cannabis for adults, making it the first state, alongside Washington, to do so. Amendment 64 allowed adults 21 and older to have up to one ounce of cannabis, grow six plants (with three being mature), and purchase cannabis from regulated stores. This led to recreational legalization in December 2012 and state-licensed retail cannabis sales starting in January 2014.

Recreational Use/Adult Use Program Opportunities

Before operating, a marijuana business needs approval from both the state and their local jurisdiction through licensing.

How many dispensary licenses are in Colorado?

As of May 1, 2023, Colorado has issued licenses to 371 medical dispensaries and 679 retail dispensaries. For the complete list, check here. 

How long do you have to live in Colorado to open a dispensary?

To obtain a license, all applicants must have resided in Colorado for at least two years. In addition, they must pass both criminal and credit background checks.

What licenses do you need to open a dispensary in Colorado?

To open a dispensary in Colorado, you will need the following licenses:

Employee License: This is a license given by the State Licensing Authority to an individual who is not a Controlling Beneficial Owner and is involved in various activities related to Regulated Marijuana. It includes those who handle Regulated Marijuana in any way, input data into a Regulated Marijuana Business’s tracking system, or have unescorted access to specific areas. The Employee License category encompasses both Key Licenses and Support Licenses.

Retail Marijuana Store Business License: This license is granted to entities authorized to buy Retail Marijuana and Retail Marijuana Concentrate from Retail Marijuana Cultivation Facilities, as well as Retail Marijuana Product and Retail Marijuana Concentrate from Retail Marijuana Products Manufacturers. They can also transfer Retail Marijuana to Retail Marijuana Hospitality and Sales Businesses, as well as to consumers.

Business Owner License: This license is issued to natural persons who are either Controlling Beneficial Owners of a Regulated Marijuana Business or Passive Beneficial Owners choosing to be subject to licensing.

How much does a dispensary license cost in Colorado?

Some of the costs associated with acquiring a dispensary license in Colorado are:

License fees and state checks vary based on the level of Controlling Beneficial Owners for Regulated Marijuana Businesses:

Level 1: 1-4 Controlling Beneficial Owners

Level 2: 5-9 Controlling Beneficial Owners

Level 3: 10 or more Controlling Beneficial Owners

How to Apply for a Cannabis Dispensary License

Applying for a cannabis dispensary license involves a multi-step process to ensure compliance with regulations and to demonstrate your suitability to operate in the industry. Here are the key steps involved in applying for a cannabis dispensary license:

1. Complete the Application:

• Download the Regulated Marijuana Business License Application.
• Fill out all sections accurately.
• Application contents include Disclosure Requirements, Main Application, Authorization Forms, Affirmation of Reasonable Care, Publicly Traded Company (PTC) Addendum A, Qualified Private Fund (QPF) Addendum B, Qualified Institutional Investor (QII) Addendum C, Research & Development (Medical only) Addendum D.

1. Suitability Applications:

• Submit any required Findings of Suitability Applications, such as Natural Person or Owner Entity.

1. Pay Application Fee:

• Pay the application fee using one of the accepted methods (check, money order, or credit card).
• Double-check payment details to prevent delays.

1. Local Jurisdiction Fees:

• Include local jurisdiction fees with your application as a separate payment (by check or money order).

1. Gather Supporting Documentation:

• Assemble all necessary documents, including Publicly Traded Companies, Qualified Private Fund, Qualified Institutional Investors, and Marijuana Research and Development Facility.
• Ensure your application is complete and in compliance with local regulations.

Recreational Marijuana License Types and Fees

Aside from Retail Marijuana Store License or dispensary license, there are also other types of recreational marijuana license. These include:

• Retail Marijuana Cultivation Facility License 
• Retail Marijuana Product Manufacturer License
• Retail Marijuana Testing Facility License 
• Retail Marijuana Transporter License
• Retail Marijuana Operator License
• Retail Marijuana Accelerator Cultivator License 
• Retail Marijuana Accelerator Manufacture License
• Marijuana Hospitality Business License 
• Retail Marijuana Hospitality and Sales Business License 

To get an overview of the fees, please review the MED’s Fee Schedule.

Final Thoughts

We anticipate many new events through 2025 to unfold that will affect when and what recreational legalization will look like. By adding yourself to our Colorado Cannabis Mailing List (below), we will keep you updated on all relevant news, and not so easy to find news and comments related to Colorado Legalization below. This includes but is not limited to:

• How much will it cost to open a dispensary in Colorado?
• What are the requirements to get a marijuana business license and open marijuana dispensaries in Colorado?
• What special programs will be available?
• And more

Just fill out the information below to get access.