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How to Open a Dispensary in California 2022

October 26, 2022

This article can help you through the entire process if you’re wondering how to open a dispensary in California 2022 and to have an overview about the laws governing a challenging and quickly expanding market. 

California became the first state to legalize medical marijuana in 1996, and only 20 years later, in 2016, it joined the states that legalized recreational cannabis. Since then, California has continued to be the world’s largest marijuana market. It is not unexpected that entrepreneurs are rushing to open marijuana stores, given the size of the market that is available. The state has granted over 10,000 licenses to manufacturers, testing facilities, distributors, growers, dispensaries, and other cannabis-related enterprises.

To open a dispensary in California, you need to refer to California’s Bureau of Cannabis Control, which issues the corresponding licenses to start a cannabis business in California. You must apply for a Cannabis Retail License if you want to start a dispensary. The following documents are necessary to obtain the license:

  • Business and Operations Plan
  • Financial Plan
  • Inventory Control Plan
  • Patient Education Plan
  • Patient Recordkeeping Plan
  • Dispensary Security Plan
  • Staffing Plan

Prior to submitting your license application, your business strategy should be ready. You need to be prepared to go once that application window opens.

California Cannabis Dispensary License  

To open a dispensary in California, you must apply for a storefront retailer or type 10 license.  

You must submit an online license application to the California Bureau of Cannabis Control in order to start a marijuana dispensary. State and municipal governments must both authorize licenses.

The success of your cannabis business depends on your capacity to demonstrate that you have the skills and resources necessary to run it. You’ll need a strong company strategy and a well-defined vision plan to do that.

The next stage in obtaining a dispensary license in California is to put together an application package that satisfies all requirements set forth by federal, state, and local authorities.

Consider that even the most skilled, battle-tested business owners struggle to compile their application package for a cannabis license. These documents are lengthy and intricate, and rules and protocols appear to be updated biweekly.You can apply for a license with the state here.

Dispensary License Cost California 2022

If you wonder how much it costs to open a weed dispensary in California,  here is an overview of the dispensary license cost in California 2022 that you will have to pay for license fees if you run a marijuana dispensary in California. Licenses must be renewed every year. 

  • Initial license fee: $1,000 (non-refundable)
  • Annual fee: $4,000 – $72,000 (scales based on revenue)
  • Local Approval fees: $5,000 – $30,000 (scales based on scope and size)
  • Permits and assessments: $0 – $30,000 (scales based on scope and size)
  • Consulting fees: $20,000-$40,000 (depending on project scope)

You will cover the dispensary license cost, which is separate from the application fee after your retailer license application has been granted. You will receive a license number after submitting the license fee. After that, you may start selling cannabis for a profit.

Please, make sure to present an accurate and complete application to avoid denial of a license. Rejection may also occur if your dispensary doesn’t adhere to local and state regulations or you’ve been convicted of a felony.  

How to Choose a Dispensary Location in California 

The municipal governments of California’s cities and counties have a broad range of policies regarding the cannabis-related activity. You must find a suitable property for your cannabis business’s specific requirements.

However, it is not as easy as just spotting a property in a “green zone” and buying it. Most cities forbid retail establishments and even those that do, only allow them in a few areas. In addition, you cannot be adjacent to public parks, schools, churches, or parks for children, like in other states.

You’ll be ready to put together an application package for approval once you’ve acquired your desired property and obtained your conditional use permit.

How to Get Funding to Open a Dispensary in California

You’re going to need a lot of finances to open and run a cannabis business in California because everything there is pricey, from goods and labor to real estate. Additionally, local law enforcement doesn’t really prioritize monitoring the black market, which is very powerful, will undercut you on price, and where many individuals are already at ease making purchases.

On the plus side, you can obtain finance from nearby investment companies. Cannabis is considered a fresh and exciting market with a lot of promise, so they could be more inclined to invest. 

There is a small amount of moral objection to cannabis in California. Still, the evidence suggests that many people only favor legalization, provided the shops are located outside their own neighborhoods.

Additionally, California gives the sector state-based financing, including a recently launched $30 million Grant Program to Promote Marijuana Industry Social Equity.

The state of California will offer $30 million in grant money to cannabis entrepreneurs from communities disproportionately affected by the drug war, the state’s marijuana regulators have announced recently.  

By providing technical support to individuals, lowering or waiving licensing costs, aiding in the hiring, training, and retaining of skilled and diverse staff, and promoting company resilience, such as emergency preparedness, the initiative will empower such enterprises. 

A minimum of $23 million will be set up for low- or no-interest loans for licensees or company applicants from communities most impacted by cannabis prohibition, as determined by local governments.

How to Stay Compliant in California

Another point about how to open a dispensary in California in 2022 is a point of sale (POS) system that is linked with and customized for your dispensary is necessary given the complexity and difficulties involved in opening a dispensary in California. The system is designed to help you manage your inventory, transactions, and compliance with your state. California dispensaries are required to cooperate with Metrc as the primary trace and tracking system. 

How to align with Metrc you might ask. Well, all you gotta do is implement a POS software system that is tailored to your business, in this case, IndicaOnline software. IndicaOnline has been in the cannabis industry since 2011 and is 100% equipped with all the knowledge, skills, and experience that it takes to thrive in this industry. It’s no coincidence that more than 20% of cannabis medium and big retailers trust the IndicaOnline team. 

By using IndicaOnline software you never have to worry about all the restrictions and regulations that your state sets. IndicaOnline receives all the new requirements directly from Metrc and sets your operations straight, without you lifting a finger. That’s not all. By signing up with IndicaOnline you also get access to Sweede regulations. 

Sweede.io is an e-commerce platform by IndicaOnline for cannabis dispensaries. It helps your dispensary reach thousands of new customers in your area and ensures they can find your dispensary using the platform’s built-in marketing tools. So if you want to have your company visible/available to digital customers as well, this is your chance to do so.

The Cannabis Market in California

The cannabis market in California is the biggest in the whole world. Sales might reach $3.8 billion in 2020, according to estimates by Industry Research and BDS Analytics, and they anticipate the market to reach $6 billion by 2025.

This is true even though California still maintains an illicit cannabis industry with projected sales of $8.7 billion, roughly twice the size of the legal cannabis market.

Prospective cannabis company owners can apply for practically any type of license: cannabis cultivation (distinguished by size and indoor/outdoor/mixed light, as well as a nursery), cannabis manufacturing (including volatile extraction, non-volatile extraction, or edibles and topical creation), cannabis retail (including brick and mortar or delivery), cannabis transportation and distribution, and cannabis events production. There is also a combined micro-business license available. Adult usage, medicinal cannabis, or both are all eligible for licenses.

​There are about 700 licensed dispensaries in the state, including more than 130 in the Los Angeles region, according to the Cannabiz Media licensing database.

Security Options

Many of the criteria mentioned above that guide you on how to open a dispensary in California 2022 call for specialists and documents, which may be expensive and time-consuming to locate. But if you already have a facility, you may start implementing security measures right away. You want to demonstrate in your application to your state or local government that you will run your dispensary responsibly and have a solid security system in place to safeguard your product. 

In California, some firms offer and provide security systems to marijuana dispensary businesses. You can equip your retail store with the following options:

  • Remote monitoring experts use live surveillance to secure your facilities and crops.
  • The systems use audio and visual deterrents to warn intruders before committing crimes.
  • When required, they quickly dispatch 911 while preventing false alarms.
  • Together with any onsite security guards, you may have, the security systems considerably lower the chance of theft.
  • Pulling clips is quick and straightforward since the security systems automatically tag every piece of video.

Do Dispensaries Share Information with the Government of California 

Adults in California must present a valid ID, a driver’s license, or a passport to verify their age of 21 in order to purchase recreational marijuana at a dispensary.

According to Proposition 64, dispensaries must only verify this information for walk-in recreational clients. The legislation does not require companies to keep client information after a transaction; however, there is nothing in the law that forbids dispensaries from obtaining and keeping it.

Based on the information from half a dozen dispensaries in California, they retain customer information by scanning driver’s licenses. This is a process that in some cases automatically enters personal information into the store’s computer system. Some dispensaries, in addition, require customers to fill out their names and phone numbers on a contact form, or they type in customer initials and date of birth if they’re uncomfortable giving their full name.

Several primary reasons for retaining a customer’s data in dispensary computer systems in California are marketing or being compliant with state laws. Experts say dispensaries need to keep track of who bought, how much, and when. Under the law, dispensaries are instructed to retain personal information for delivery orders to help ensure marijuana is not being diverted to those under 21. In such cases, the store maintains copies of each delivery request. 

To purchase medical marijuana, patients must show a doctor’s recommendation or a state-issued medical marijuana ID card when they visit dispensaries. Many medical marijuana patients like to be entered into the system just for convenience when they come back in to acquire new products, rather than bringing a letter from their doctor each time they visit dispensaries in California. 

According to experts, It’s improbable that the federal government will enforce its laws against individual customers; it is always focused on big suppliers. And the management of consumers has been turned over to governmental authorities.

Due to their legal protection, it seems even less probable that the federal authorities will pursue medicinal marijuana users. Since 2012, Congress has prohibited the U.S. Department of Justice from using budgeted funds to bring legal action against users or sellers of medicinal marijuana who adhere to state regulations.

For recreational pot consumers, there’s no such protection, though there have been several bills submitted in Congress to strengthen protections for recreational customers.


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You may safeguard and streamline the operations of your cannabis dispensary with the assistance of our qualified team, that have 11 years of expertise under their belt. Our team is always keen on creating software that is tailored to your business’s needs and covers all the necessary aspects, from development through delivery.