How to Start a Marijuana Business in Legal States

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by Morgan

Last update:

August 30, 2023

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How to Start a Marijuana Business in Legal States

So you love cannabis and want to show your green thumb skills off to others who crave what you can grow.

Are you curious about how you can start a cannabis business as a dispensary or cannabis farm? Do you have a knack for growing weed and want to share it with the world (legally of course)?

Look no further. Our guide to starting your own cannabis business has arrived…

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A Guide To Starting Your Very Own Cannabis Business

We designed this guide to help you to navigate these waters. It’s no secret: business is booming for the cannabis industry. What used to be an illegal and highly dangerous way of life has become a multi-billion dollar industry over the last ten years, and is only poised to grow as time passes. Twenty years ago, the widespread legalization of marijuana seemed almost unthinkable. Now? Well, as of right now, over half the country — 29 states, as well as the District of Columbia — have legalized marijuana use in one way or another.

how to start a weed businessOut of those 29 states, seven of them (including D.C.) have legalized marijuana for both medical and recreational purposes. The other 22 states have legalized marijuana for medical use. In addition to these laws, many other states have recently begun to relax their laws when it comes to possession, basically decriminalizing the act of carrying small amounts on your person at any one time.

The result is a financial — and cultural — revolution. Since the first state legalized medical marijuana in 1996, the tide of popular opinion has gradually turned towards favoring complete and total legalization. Colorado and Washington set off another wave in 2012 when they became the first states to legalize recreational marijuana use. Since then, the marijuana industry has blossomed. In 2015, total nation-wide sales topped $5.4 billion, and the estimates for 2016 are even higher. As more and more state consider plans to allow its citizens the freedom to light up, that number is expected to soar.

With all this money pouring in, you might be wondering what you can do to get a piece of the action. The good news is that, like any burgeoning industry, there are still plenty of opportunities available to get in on the ground floor. All it takes is a willingness to work hard and a knowledge of how to get started. We can’t help you with the first part, but you can read on to learn a little more about what it takes to start your own marijuana business in legal states. Of course, the process might be a little different depending on a number of factors, including the specific laws in your state, county, or municipality, but below are some general tips on how to get started — regardless of whether you want to start a cultivation business or a dispensary.

How To Start a Marijuana Dispensary

Marijuana dispensaries are where the people go to get their marijuana — whether it’s for recreational purposes, or to fill a doctor’s recommendation. While some dispensaries can also grow their own product, typically dispensaries get their product from local growers.

If you are interested in starting a cannabis business, there are several things you have to do.

  • Check your local licensing regulations.

This can NOT be stressed enough. Before you do anything else, it is vital that you take the time to research the laws and regulations for your state, county, and town. Because the legalization of marijuana is fraught with political controversy, every area has approached it differently. The result is nothing less than a confusing labyrinth of laws that can change from one area to the next.

To make matters even worse, you have to remember that, while marijuana might be legal in your state, it is still a crime according to the federal government. This means that you can pay attention to all the local laws, dot every i and cross every t, and still run afoul of the law. Chances are, though, that if you follow state and local rules, you should be fine and not have to worry about trouble from the federal authorities.

In researching your laws, you’re going to find that there are about as many different approaches to licensing the cannabis industry as there are states and counties.In some states, licenses are readily available. In others, they are rare and hard to come by. Some states require dispensaries to be cultivators as well, other states require those operations to be separate. For these reasons, a thorough knowledge of the regulations that pertain to you is imperative.

  • Create a business plan.

This is the part where those cannabis businesses classes you took pay off. Before you start your cannabis business, you need to create a thorough business plan. This plan should include all the information pertaining to your dispensary and its operations, including (but not limited to): an executive summary, financial projections, market analysis, revenue forecast, and anything else that might be needed. If you don’t have experience or knowledge in how to write a business plan, there are local services that can write it for you, as long as you have the numbers and other information you’ll need.

  • Secure your capital

Unless you’re independently wealthy, the chances are that you don’t have the money needed to start a cannabis business just lying around in an account somewhere. So, before you can really start getting the ball rolling, you’ll need to get money. This can come in the form of a small business loan or by talking to local investors.

  • (Literally) build your business

Now that you have a plan in place, and the capital needed to realize it, it’s time to actually form the infrastructure of your business. This means building your business from the ground up — finding, renting and renovating your retail space, choosing and registering a company name, dealing with tax IDs — basically, everything you need to do in order to be physically and legally ready when opening day comes around.

Of course, at the same time you’re doing this you’re going to need to…

  • Get your actual cannabis business licenses

We talked earlier about doing your research. Assuming that you learned about all of your local licensing requirements and have worked in accordance with them so far, this would be a good time to actually acquire your cannabis business license or licenses that you’ll need to be completely legal, and stay compliant with those laws in the future.

And while you’re busy getting your licenses and building your business, you also need to…

  • Contract with local growers to sell their product

Nothing you’ve done so far will matter much if your doors open and there’s nothing to actually sell to your customers. So, while you’re doing all of this, you also need to take time to meet your local growers and arrange to sell their product. This will probably take some time, as different growers will have different stock at different prices. Shop around, ask questions, find out how much other dispensaries are paying, and do your best to be treat them fair and be treated fairly in return. Then, enjoy the fruits of your labor!

How To Start a Marijuana Growery

If you would prefer to be cultivating, rather than dispensing, the procedure is surprisingly similar.

  • Research all applicable rules and regulations

Just like starting a dispensary, the first and most important thing you need to do right away is research your state, county, and local laws and make sure you stay in compliance with those laws at all times.

  • Write a cannabis business plan

The next thing you’ll need to do is write up a business plan. Again, if you don’t know how to write a business plan, then you’re going to want to hire a professional to do this. Since a good business plan is often key to getting investors, licenses, and other crucial things, take the time to get your cannabis business plan correct and thorough!

  • Secure your capital

The third thing you need to do is to secure your start-up capital, either by courting local investors or asking the bank for a small business loan.

  • Build your cannabis business

With money in hand, it’s time to actually build your business. This involves choosing a location, building your inventory, buying whatever equipment you need for cultivation and anything else necessary to be ready when it’s time.

  • Get your business licenses

If you didn’t do this already, get your business licenses and whatever else you need to be legally compliant.

  • Connect with dispensaries

Up until now, the procedure has been pretty much identical to starting a dispensary. However, one of the main differences is that, as a grower, you don’t have to necessarily worry about an “opening day” situation — instead, your business is ready when your first crop is.

Until then, you’ll need to connect with local dispensaries to figure out where you’re going to send that crop. Shop around and find out (if you don’t already know) what a good asking price is, and then see who will give you what you’re asking.

Depending on the yield you’re expecting, you might need to make arrangements with several local dispensaries to make sure that everything you’re producing is heading out the door, and none of it is going to waste.

Whether you’re wanting to cultivate or dispense, the cannabis industry can be a profitable business. As long as you remember to stay in legal compliance at every step of the process, there’s no reason why you won’t be able to find success. Good luck!


1. What is the cheapest state to open a dispensary?

The cheapest state to open a dispensary is Oklahoma, where the application fee is only $2,500. To get your business up and running, you should expect to shell out anywhere from $80,000 to $150,000. It is expected that your monthly costs will be in the $50,000 range. Other states that have low application fees include Oregon ($2,500).

2. What are the requirements to start a marijuana business in a legal state?

The requirements to start a marijuana business in a legal state vary from state to state, but generally include obtaining a license from the state government and complying with local zoning regulations. In addition, cannabis businesses must comply with state and federal laws governing the sale and distribution of marijuana.

3. What are the costs associated with starting a marijuana business in a legal state?

There are a few costs associated with starting a marijuana business in a legal state. The first is the cost of obtaining a license to operate. The second is the cost of setting up your business, which includes things like renting or buying a property, purchasing equipment, and hiring employees. Finally, you'll need to account for the cost of doing business, which includes things like marketing and advertising your product.

4. What are the restrictions on operating a marijuana business in a legal state?

Cannabis businesses in legal states are restricted in a few ways. First, they cannot be located within a certain distance of schools or other cannabis businesses. They also cannot sell to people under the age of 21, and must comply with advertising restrictions. Finally, they are subject to regular inspections from state regulators.

5. How do I get a license to operate a marijuana business in a legal state?

There are many ways to get into the legal cannabis industry. The most successful cannabis businesses are those who have a business idea and are passionate about it. They also have the drive to make their business successful. There are many things to consider when starting a cannabis business, such as licensing, location, and products.

One important thing to consider when starting a successful cannabis business is the licensing process or federal legalization. Every state has different regulations for cannabis businesses, as future cannabis business owners so it’s important to do your research first. In some states, you need to be licensed as a dispensary or grower. In other states, you can be licensed as a manufacturer or distributor. Make sure you know what type of license you need and how to get it.

Location is another important consideration for cannabis businesses. You want to choose a location that is strategic and will help your business thrive.

🌿  Join my "growing" community 
of 5000+ happy
cannabis farmers! 👩‍🌾

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from seeds to smoke! 
— Morgan, 420GreenThumb 🌱

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About the author 


I discovered the benefits of Cannabis at a young age in 2002, with years of trial and error, my knowledge grew just like my plants. As my love for cannabis unfolded I began to teach and learn, trying to gain as much information and practical growing experience.

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