How to Open a Dispensary in Washington

Washington became the first U.S. state to legalize marijuana for recreational use and the first to allow marijuana sales on December 6, 2012. The state had already approved medical marijuana in 1998. At the moment, cannabis is acceptable for medical and recreational use by adults over 21 under state law.

Since then, the entrepreneurs have established prosperous businesses in Washington, and the cannabis industry has experienced quite a  growth. While all businesses carry some risk, the cannabis industry is especially risky due to the extensive complexity of the rules and standards. 

We recommend you familiarize yourself with Washington’s marijuana laws if you need to know how to open a dispensary in Washington and operate your cannabis business in the state. 

How to Get a Dispensary License in Washington 

The cannabis industry in Washington is overseen by the Washington Liquor and Cannabis Board which is also responsible for issuing and distributing cannabis growing, distribution, and retail licenses.

You must be at least 21 years old and a Washington resident for at least six months to apply for the cannabis business license. Business entities (such as LLCs and corporations) can also obtain licenses. Nevertheless, they must have been incorporated in the state of Washington, and all of their members must have been state residents for at least six months before applying. For as long as they keep their licenses, all licensees must maintain residency.

The qualifications and application process for a cannabis license include:

• Inquiry – to verify the source of funds used to acquire an existing business and start the business, the applicant’s right to the real and personal property, and to verify the true party or parties of interest;
• A background check – to evaluate whether the applicant qualifies for a license;
• An inspection of the proposed or currently licensed business location to determine if the applicant has met all of the requirements of the license or proposed changes to the licensed premises;
• A residency check to confirm Washington state residency – all applicants applying for a cannabis license must have resided in the state of Washington for at least six months prior to applying for a cannabis license;
• Applicants must be current in any tax obligations – to the Washington state department of revenue and other state agencies, as an individual or as part of any entity in which they have an ownership interest; 
• Operating plan – each cannabis license applicant must submit an operating plan outlining the required elements for the location;
• Certificate of compliance;
• Notice of cannabis license application; 
• Social equity applicant – a person qualifying for the social equity in cannabis program may apply for a cannabis license consistent with the provisions of this chapter.
• Information verifying your identity. It includes a copy of your approved identification and your fingerprint cards;
• Information about your finances, including a source of funds statement, a copy of your tax returns, and previous bank statements;
• Sworn statements and affidavits.

Basic Washington cannabis applications are accepted during open application periods and a letter of intent is also required.  

Can I Open a Dispensary in Washington Right Now?

Not right now. The WSLCB does not accept new applications and does not currently have any intentions to do so.

How Much Does it Cost to Start a Dispensary in Washington?

Here is the following step if you want to know how to open a dispensary in Washington. It is typical for most jurisdictions to require a minimum quantity of liquid cash on hand as a necessary component of the Washington Cannabis application. This is to ensure potential licensees have the resources to operate for the first two to five years after receiving a Washington cannabis license.   

Compared to other states, Washington State offers more affordable start-up costs. The application fee is only $250, and the licensing fee is under $1,500. Additional start-up costs may vary depending on when your dispensary is ready to open because the market is expanding quickly.  

The expense associated with license application costs is sometimes overlooked. The average license fee is around $5000. These costs are to get you started; you’ll also need to pay an annual license fee. They are non-refundable. Consider annual fees start at $1,000 and go up to $10,000. And let’s face it, it’s quite a lot of money just to enter the game.

Choose the Right Dispensary Location in Washington

If you want to know how to open a dispensary in Washington, your cannabis business must also adhere to Washington state regulations in order to choose a convenient and attractive location for customers. 

The distance between your cannabis dispensary and any elementary or secondary school, playground, recreation area, daycare center, public park, library, or gaming arcade must be at least 1000 feet. In crowded, urban regions, it might be challenging for cannabis retailers to find a location that meets all of these requirements. County and municipal governments are free to pass a law that lowers the 1000-foot buffer to a minimum of 100 feet in light of this. The exception applies to elementary schools, secondary schools, and playgrounds. 

Not everyone is thrilled to have a marijuana shop in their neighborhood. Local government bodies will be informed of your proposed location and given a chance to oppose it. Some Washington cities don’t even permit marijuana-related businesses.  

Dispensaries are prohibited from being within 1,000 feet of the following locations by Washington State law:

• Elementary and secondary schools;
• Public playgrounds and parks;
• Public transit stations;
• Libraries;
• Rec centers;
• Childcare facilities;
• Video game centers or arcades. 

Make sure to align with the zoning requirements of your local government. 

How to Get Funding to Open a Dispensary in Washington?

One of the key points to understanding how to open a dispensary in Washington is obtaining funding for your cannabis business in the state. Traditional commercial lending banks rarely allow marijuana businesses to borrow money. The fact that marijuana is still considered a Schedule 1 restricted substance is a risk that banks wish to avoid. The federal government is in charge of supporting banks and offering them other advantages. Bankers generally desire to work within the parameters of traditional lending as a result. Traditional lending banks usually won’t give you business financing even if you have excellent credit and a sizable bank account.

A rule was established by the Washington State Liquor and Cannabis Board in 2016 that gives non-residents a chance to finance cannabis businesses in Washington State. However, this policy is governed by rigorous guidelines. The six-month residence barrier for gifting and lending money to cannabis businesses in Washington state has been removed, but all lenders still need to submit to criminal background checks, and the sources of any loans or gifts must be confirmed. Only particular sorts of loans are available since lenders, who are financiers, are not permitted to hold an equity position in a Washington state cannabis business if they do not meet the six-month residency requirement. Due to the fast-expanding cannabis market in Washington State, numerous companies have emerged to finance cannabis-related enterprises, including hedge funds and investors who specialize in cannabis financing.   

The state of Washington may have strict regulations governing marijuana dispensaries, yet a variety of marijuana businesses are nonetheless not only permitted but actively promoted there. These businesses include CBD shops, among others. 

Create a Comprehensive Business Plan

When creating a business plan for a cannabis dispensary, you should take the following into account:

• ‍Market needs and opportunities, competitor analysis;
• Projected expenses and potential revenue; 
• License application process and the corresponding requirements;
• Brand identity;
• Target audience analysis;
• Execution plan;
• Product and operations;
• Financial information;
• The team.

How to Stay Compliant in Washington

Washington canna-businesses use Leaf Data System as the seed-to-sale cannabis tracking solution. Every cannabis business with a license must have a Leaf account.

You may also learn more about Washington’s marijuana legislation here. 

Security Requirements

Under the set rule by the corresponding authority, your marijuana dispensary must meet the following security requirements: 

• A dispensary owner must ensure to equip all employees with ID badges at all times at work.
• All windows and entry points throughout the perimeter should have a security alarm system at the very least.
• Your dispensary must install a video security camera with a minimum resolution of 640 x 470 pixels and an IP-compatible system. All cameras must be operational around-the-clock and be able to recognize people entering the building through any of its entrance points from a distance of at least 20 feet. Retailers must preserve copies of all videos for at least 45 days on the premises.
• You are required to keep thorough records of all of your inventory and upload those details to the state’s database. 

Conclusion

Ten years ago, Washington state voters approved the legalization of cannabis for adult use. Since then, the industry has seen success, but not for everyone. Due to Washington’s strict regulation of the cannabis sector, it may be challenging to prepare the necessary paperwork and ensure that you have met all legal criteria.

In order to make it simple for you to enter this complex market and maintain compliance with state laws at the same time, our team does all possible to provide you with all the information and guidelines for the cannabis business in Washington.

Feel free to reach out!