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How Much Does it Cost to Open a Medical Marijuana Dispensary?


These documents are necessary for investors, for a state issued license and it makes good business sense. It’s something that every dispensary has to go through in order to bring their business to life. This article, in detail, covers how much it will cost to open a medical marijuana dispensary.

The True Cost of Opening a Medical Marijuana Business

The costs explained below are start-up costs only. Please keep in mind that the costs below are averaged, and can be increased or decreased based upon a variety of factors. It’s similar to building a house: you can go cheap, expensive, or anywhere in between. Further, the costs for a retailer who seeks to purchase their inventory wholesale will have lower start-up costs than one who seeks to be vertically integrated (aka grow and process their own marijuana).

The following estimates are for a retail outlet who seeks to purchase their inventory wholesale.

Have detailed questions about opening a medical marijuana dispensary? Need expert guidance about how to succeed in Michigan’s cannabis industry?Request a consultation now.

Property Acquisition and Buildout

The largest percentage expense for a marijuana retailer is the cost to acquire the property and building. Once the property is acquired, then there’s the cost to build it out per specifications. Of course, this can vary depending upon the size of the building and the amount of work necessary to get it into shape. Leasing can be a cheaper option, but we recommend buying.

The license will run with the property, so the owner of the property will always have a superior interest. When the owner is also the license holder, it’s the most effective and valuable. For example, the cost of a small, but compliant building may be $150,000 with a build out cost of $30,000. This number could be as high as $100,000. It just depends upon how upgraded you want it. Now, you’re ready for the equipment.

Equipment Costs

The building is going to need a computer system, office furniture, waiting room furniture, display cases, display jars, scales, signage and more. Either way, plan on spending at least $20,000. This doesn’t include the security system, which is detailed below. When furnishing the building, sourcing items from the internet can often be a good way to do this.

You also need to consider just what exactly you’ll be selling at your store. Maybe you want to focus on the full range of items, including the paraphernalia and the wide range of consumables. Or perhaps you want to focus on the product and leave the rest to a headshop. You could even collaborate with another local establishment to discuss what’s best in the area and focus on using your money efficiently.

Have more questions about how much it will cost to open a medical marijuana dispensary? Need expert guidance about how to succeed in Michigan’s cannabis industry? Request a consultation now.

Professional Fees

You’re going to need an attorney for licensing, compliance, municipal lobbying and real estate issues, a bookkeeper, and a cannabis business consultant. An architect will also be necessary to perform the required site plans. There will be standard operating procedures (SOPS) that need to be written, along with; security and inventory plans, waste management plans and management agreements. Plan on spending about $30,000 over the course of about a year.

Application and Licensing Fees

To obtain the licensing necessary, you must first pay the application fees. You can expect about $5,000 in application fees. Once your application is accepted, you can expect about $10,000 – $15,000 in licensing fees. Paying both municipal and state licensing fees are required to operate.

Have more questions about how much it will cost to open a medical marijuana dispensary? Need expert guidance about how to succeed in Michigan’s cannabis industry? Request a consultation now.

Security and Surveillance

This is a huge necessary expense, which is also state mandated and regulated. Plan on having a security system that is online with the Michigan Department of Licensing and Regulatory Affairs (LARA). Their marijuana enforcement division will have 24 hour access to your live feed cameras, which will be required in certain areas of the business. You may want extra for security for sensitive areas, which is why you should plan for a minimum $20,000 expense.

Wages and Staffing

Your business will have to have the start-up expense for the wages of your employees, which will also include key employees or managers. A business should expect to set aside at least three months of staffing costs ($60,000) to get started, in the event there isn’t an immediate profit.


Yearly premises and casualty liability insurance costs depend upon the size of the business and also its location. You should certainly expect the premiums to reflect the “risky” nature of a marijuana related business. It’s also necessary to hold a products liability policy as well. All in all, this should cost approximately $15,000 per year.

Opening a Medical Marijuana Business

So, an average start up cost can be between $400k and $500k. Of course, there are always small expenses that are not easily forecasted, but nothing should stop the plan to get started. So let’s do it.

Barton Morris
Barton Morris has been providing high-quality legal representation in the area of state and federal criminal defense for more than 20 years.
The Cannabis Legal Group has been providing our clients professional and quality legal assistance in all aspects of representation for years.

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