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How to Open a Dispensary in Colorado

October 19, 2022

Are you the one eager to start a cannabis dispensary in Colorado? Then this is the very article you should have a look at.

Colorado is a mature, somewhat crowded, and experienced market in terms of medical marijuana businesses as its legalization goes back to 2000. Twelve short years later, recreational use was permitted, and adult-use sales officially began. 600 recreational and 500 medical dispensaries have found homes in Colorado since that period. 

However, we should emphasize that marijuana is still illegal at the federal level. This fact sets the cannabis business under many regulations which you must consider when planning to start a dispensary in Colorado. 

How to Open a Dispensary in Colorado 

A step-by-step guide on how to open a dispensary in Colorado: 

Secure Funding

The process of how to open a dispensary in Colorado, and in the states generally, is associated with significant scales of finances and capital that, in most cases, require attracting individual investors, referring to banks or investment companies. 

Select a dispensary location in Colorado

Like many other states, you may face some challenges when defining the location for your dispensary in Colorado. Most states have strict regulations that control dispensary zones not to be at proximities to schools, daycares, public parks, churches, and other dispensaries. Some cities elect to adopt regulations allowing only cannabis delivery into them. The local governments and their jurisdictions may also impose restrictions on the time, place, manner, and number of marijuana businesses. So, you must consider these limitations while planning a cannabis dispensary in Colorado. 

Apply for a Colorado Dispensary License

You may apply for a Colorado dispensary license and medical marijuana business license on the government website. You may be required to provide other documentation, like evidence of the premises to be licensed, copies of tax/wholesale license, and funding source disclosure. You are allowed to obtain either a medical or recreational license or both. 

How Can I Apply for a Dispensary License in Colorado?

If you want to open a dispensary in Colorado, you must fill out an application for both the state and the city or county where your dispensary will be located. It can save your dispensary valuable time and money. It can also determine if your dispensary can operate in the city you’re applying for.

Then you must pay the non-refundable application and licensing fees. At this time, you will need control of a location and a comprehensive floor plan. 

Can I Open a Cannabis Dispensary in Colorado now?

You can. With the new amendment 64 of the Colorado constitution, it is allowed to apply for the license of cannabis retail stores. However, state requirements apply to anyone who wants to work and open a dispensary in the cannabis industry in Colorado. 

How Much Does It Cost to Open a Dispensary in Colorado?

The startup cost to open a dispensary in Colorado ranges from $150,000 to around $2,000,000. This amount covers the annual advertising fee, rent fee, license application fees, staffing, and security. 

As for the Colorado dispensary license and application fees themselves, we have drawn a table for you for better understanding: 

License Type

Application Fee License Fee


Medical Marijuana Store




Retail Marijuana Store




Medical Marijuana Store – Renewal




Retail Marijuana Store – Renewal




Registration of Owner



Owner License Renewal



Registration of Employee



Employee License Renewal




How to Get Funding in Colorado?

There are credit unions in Colorado expressing willingness to work with cannabis businesses; there may be around 35 institutions currently in the state providing banking services for the industry. However, these unions operate anonymously and do not publicize their activities. It is essential to know that the unions do not offer you loans or other financing options but only keep your cash. With the cannabis business blooming in Colorado, diverse business companies started to provide financing for marijuana businesses, including cannabis financing. 

It’s improbable that any big bank in Colorado is going to give a loan to a cannabis company. Unless the powers make a joint decision to enact a national policy legalizing marijuana, most banks and credit card companies won’t work with you. You’ll need to find an alternative lender.  

The primary financing players only approve about 20% of all loan applications, without zero percent to Cannabis Businesses. Such an attitude will presumably change when cannabis is legalized on a federal level, but until then, you should not expect traditional banks to offer financial support. 

Don’t be disappointed! There can be found companies ready to help and have experience working with small and medium-sized businesses across the USA to get access to the capital they need and cover the cost to open a dispensary in Colorado. 

These companies offer equipment and vendor financing, dispensary loans, cannabis working capital loans, lines of credit, etc. 

Create the Comprehensive Cannabis Business Plan

The cannabis industry is also facing exponential growth in the USA and Colorado. One key point that includes opening a dispensary in the state is preparing a cannabis dispensary business plan. Providing a detailed business plan is an essential part of state licensing, not alone that It can help you attract investors and other key members of your management team. Being precise about every detail in your business plan will also enhance your chances of getting approved for a cannabis business license. 

You should consider the following factors while preparing a cannabis dispensary business plan:

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

The Current Cannabis Laws in Colorado

We want to provide you with primary regulations related to adult-use cannabis through the guideline on how to open a dispensary in Colorado. For more detailed information about Marijuana laws in Colorado, click here.

In Colorado, you must be at least 21 years old to buy adult-use marijuana. It’s legal for adults to possess up to 1 ounce of bud at a time. And you have to be a Colorado resident with a qualifying medical condition to purchase medical marijuana in the state.

The only place you can legally purchase marijuana is at a licensed dispensary. There are more than 500 adult-use stores across Colorado at this stage. These approved retail shops offer different products, from flowers and wax to gummies and teas. Licensed budtenders can help guide your experience. To enter and purchase marijuana at a licensed dispensary, you’ll be asked to present valid identification, such as a driver’s license, so your budtender can verify your age and identity.

Don’t consume marijuana on federal lands like national parks, monuments, and many of our ski slopes, hiking, and biking trails. Since marijuana is still federally illegal, these are definite no-use zones. 

Don’t Consume marijuana in public, or outdoor places. Colorado laws prevent consuming marijuana in a manner that other members of the public easily observe. It includes puffing in public spaces, including concert venues, parks, streets, sporting arenas, and building common areas. Eating edibles in public spaces isn’t reasonable either. An important exception to this restriction is a licensed hospitality business, which may offer patios and other outdoor areas for legal consumption.

Don’t partake in a car. Consuming marijuana and driving is not safe or legal. In addition, smoking in rental cars could cause hefty fees. 

To open a dispensary in Colorado, you must:

  • Be at least 21 years old; 
  • Not have any prior convictions with regard to possession or distribution of controlled substances within the last 10 years; 
  • Be fully discharged of all felony convictions for at least five years;
  • Have a clean moral background. This will be determined by criminal records and a letter from your local police station;
  • Not be employed by the local or State Licensing Authority. This may include being employed by the sheriff or a prosecuting officer.

How to Stay Compliant in Colorado?

Cannabis POS Software

The complexity and the challenges to open a dispensary in Colorado require a point of sale (POS) system integrated and tailored to your dispensary. The system is designed to help you manage your inventory, transactions, and compliance with your state. Colorado dispensaries are required to cooperate with Metrc as the primary trace and tracking system. Please remember that if you fail to use Metrc, your business license will be subject to revoke. 

Our POS system is certified and state-approved, ensuring effective tracking and inventory management operations in your cannabis dispensary. IndicaOnline offers you a number of benefits and supports you with a powerful asset for your dispensary, and serves as a prerequisite for fully developing and expanding your marijuana business. 

IndicaOnline – one of the all-in-one compliant solutions, will help your dispensary comply with Colorado compliance requirements by integrating Metrc, seed-to-sale software to track and trace your business operations and help officials monitor marijuana from cultivation to sales to consumers. 

Security and surveillance systems.

To successfully operate a dispensary, you need to acquire also modern security systems and personnel available. The security services will ensure that your products are transported to the dispensary and stored safely at the storefront. It also reduces theft cases. 


Opening up a cannabis dispensary is indeed a challenging, complex, and tiresome process, but worth it. The cannabis industry is snowballing and its use is on the rise in every adult demographic. So, considering this fact, it is the perfect time to open a dispensary in Colorado. 

And here we are- IndicaOnline. Our professional team with 11 years of experience will help you secure and simplify your cannabis dispensary business operations. Our team is working on a daily basis to deliver high-standard software tailored to your business needs that cover on all fronts from cultivation to delivery. 

We hope we managed to give you a clear understanding of how to open a dispensary in Colorado.