The cannabis industry is in high demand and a bold investment decision for those who possess the initiative to open their own dispensary. This is not a business for those who are seeking fast revenue and does require both ambition and patience. There are a large number of location-specific laws and regulations that businesses must be followed to remain legal operations.

Dispensary owners must ensure that all aspects of their business remain legally compliant. Laws regarding tax rates, licensing, and the products that are permitted to be sold, vary by state.

Many new dispensary owners become disheartened by the barriers that exist in the industry. We will explore marijuana dispensary regulations in the United States and provide the information business owners need to remain compliant.

Location Specific Regulations

Many individuals who start a marijuana dispensary are not aware of how difficult this business venture can be without proper preparation. It is crucial that dispensary owners thoroughly research the regulations for marijuana businesses in their specific location. Every location has different laws regarding the sale of marijuana-based on state, and even locally defined regulations.

Failure to adhere to these regulations could result in costly penalties, including total loss of your business. This makes it crucial that dispensary owners seek legal assistance when they are unsure of their compliance with the law.

Business Plan Development

Those seeking to open a dispensary should create a thorough business plan that accounts for regulations and potential barriers that may be presented, including making the decision of which state you would like to open your operation. This decision should be made with consideration of several factors, including:

•       Type of Marijuana Sales Allowed (Medical/Recreational)
•       Demand for Marijuana
•       Competitors
•       Tax Rates (Including Excise Tax and State Tax)
•       Licensing Fees and Recertification

There are also other things that one must take into consideration, including the cost of living in the area and leasing property availability.

Recreational Marijuana Sales

Which marijuana products can be sold, and who is allowed to purchase them varies by location. Medical marijuana requires patients to become certified but is taxed at a lower rate. Recreational marijuana is more expensive but is accessible to anyone over the age of 21.

The following states have legalized medical and recreational marijuana for adult use:

•       Washington
•       Oregon
•       Illinois
•       Maine
•       Colorado
•       Massachusetts
•       Arizona
•       Nevada
•       Montana
•       Alaska
•       Michigan
•       Vermont
•       California
•       Nevada
•       New Jersey
•       Virginia
•       New Mexico
•       Connecticut

South Dakota is currently under an appeal and pending approval.

Note: For some of these states legislation recently passed the bill to legalize recreational use, but they have not yet begun operation. Virginia will not begin distributing licenses until October of 2022.

Medical Marijuana

The majority of states have legalized cannabis for qualified patients to treat a number of conditions. The most common reason that patients seek treatment with medical marijuana is to obtain relief from chronic pain caused by illnesses, conditions, and injuries.

These purchases do require patients to obtain a medical marijuana card from a doctor who is certified to do so and require regular recertification. Some patients choose to let their coverage lapse or do not seek certification in states that allow for recreational purchases.

Tax Regulations by State

The amount that it cost to open, operate, and maintain a dispensary varies greatly based on geographic location. There is industry-specific licensing that is required in most areas, recertification for this licensing, and excessive taxes involved.

Taxes for marijuana sales are determined by the state in which your business resides. States can charge customers the price of the product, a sales tax, and a marijuana-specific tax, also known as an excise tax. Some areas charge a combination of these fees and regulations vary dramatically by state.

Medical marijuana patients are typically charged less, or no excise tax, but are still subject to the state’s sales tax.

The following table demonstrates how vast that fees and licensing regulations are based on geographic location.

This is why it is important to do your research and hire the appropriate professionals to aid you in your business compliance.

Industry-Specific Legal Advice

You must hire a lawyer who is educated on state-specific and federal marijuana laws to ensure that you remain legally compliant. This protects your business from potential legal issues and provides you with an educational resource when you have uncertainties.

Competitive Edge

If you are opening a new business or operating an established marijuana dispensary, it is important to remain competitive in this thriving industry. One crucial element for developing and maintaining a loyal consumer base is by offering your customers a variety of products and services.

One area that consumers demand variety is in payment options provided by dispensary owners. This can be difficult for some businesses to obtain because of the marijuana industry’s high-risk status. There are highly-rated cannabis-specific companies that are available to provide the tools to offer consumers numerous payment options.

Contact Paybotic for Payment Processing Solutions

Paybotic is a premier marijuana-specific financial solutions agency that serves large and small businesses. They use advanced software and tools to provide exceptional service and a range of payment processing options.

Reach out to Paybotic today to learn more about payment processing services that are efficient, affordable, and easy to use.