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How to Open a Marijuana Dispensary in Massachusetts

Massachusetts was the first state on the east coast to allow recreational marijuana businesses. Until that point, the state government only allowed medical marijuana from nonprofit dispensaries, called Registered Marijuana Dispensaries (RMD).

If you are over 21 with no felony record involving prohibited substances, and are interested in starting a business in the cannabis industry, you have some options in Massachusetts. You can open a retail store, manufacture marijuana products, cultivate or grow marijuana, open an RMD, or run a marijuana lab with testing capabilities. Created in 2016, Massachusetts' laws carefully regulate all types of cannabis companies. The application process for a cannabis business is now open to entrepreneurs looking to create a compliant business plan.

Cannabis Business Laws You Need to Know

The table below outlines the agencies, regulations, and laws you need to know before opening a dispensary in Massachusetts with helpful links to the applications and further information.

Marijuana Laws

Federal law makes all marijuana illegal on a national level, but states can determine their own laws for decriminalization or legalizing marijuana. Massachusetts laws include:

Customer Regulations

  • Customers must be 21 years or older.
  • Customers must have a government-issued current ID or passport.
  • State-issued patient permits for medicinal marijuana are required for all medical sales.

Marijuana Sale Regulations

The state requires tracking of all sales and has limits to the marijuana products or amounts a retail employee can sell to a customer in one day:

  • One ounce of cannabis – while customers can have up to 10 ounces of cannabis at home, they can only purchase one ounce a day from a store
  • Six plants – customers can have up to six plants per person at home but can only purchase six plants at a time

Customers cannot smoke, eat, or drink alcohol in the dispensary.

Permits and Licensing

The following licenses must be renewed each year. The application fees are only paid one time if you are approved. If you are denied, you must pay the fee again.

Registered Marijuana Dispensary (RMD):

  • Application fee: $1,500
  • Management and operation profile: $30,000

Retail store or dispensaries:

  • Application fee: $300
  • License for retail store: $5,000

Cultivation businesses:

  • Application fee: $100-$600
  • License for cultivator: $625-$12,500

Manufacturing businesses:

  • Application fee: $300
  • License for marijuana manufacturing: $5,000

Taxes

The Massachusetts Department of Revenue collects retail tax on marijuana sales as of 2018.

Local Market Competition

Dispensaries are opening quickly in Massachusetts and the state government can cap the number of new licenses at any time. Move quickly to create your business before the application process is paused by the government. You may also want to consider home delivery of medicinal marijuana products to give your business an edge.

Dispensaries can be very profitable once they are up and running. It is estimated that most dispensaries make upwards of $50,000 and can have profits in the millions over time.

You can see the number of local dispensaries by county on the Cannabis Control Commission map.

Cost to Open a Dispensary in Massachusetts

Startup costs are estimated from $325,000 to $1.13 million, according to Forbes.

Taking Marijuana Across State Lines

You cannot transport marijuana or marijuana products across state lines without business licenses and permits and a trained employee driver. If you do not follow the regulations, you can face federal charges.

Advertising Regulations

  • Marketing must not “jeopardize public health” – this often means no marketing or samples programs near minors or child-related businesses
  • The CCC allows the use of company brand and logos on marijuana products
  • Packaging and signs cannot use medical symbols, images of marijuana or marijuana-related items.
  • Slang or “everyday” terms for marijuana, such as weed, are banned
  • Displays for marijuana and products must be clear

Packaging and Label Regulations

There are many nuanced packaging and labeling laws you need to observe for your products. The full list is online and includes regulations from the CCC such as:

  • Warnings about impairment, habit-forming risks, driving or operating machinery restrictions, health risks, risks involving use while pregnancy, and the 21-year-old age limit must be listed on all marijuana products.
  • Must have child-resistant packaging
  • Cannot have packaging that appeals to minors
  • Packaging must indicate multiple servings within the package
  • Must list a statement saying the product is not analyzed or approved by the Food and Drug Administration (FDA)

Government Agencies and Cannabis Organizations

Note: State laws are always subject to change through the passage of new legislation, rulings in the higher courts (including federal decisions), ballot initiatives, and other means. While we strive to provide the most current information available, please consult an attorney or conduct your own legal research to verify the state law(s) you are researching.

What are the Steps Needed to Open a Dispensary?

You should follow the steps below to be prepared for the application process:

  1. Understand the laws and regulations for your county or city
  2. Create a business plan for your cannabis business
  3. Seek finances and investors for your company – this is often heavily regulated
  4. Determine company partners
  5. Determine company structure
  6. Apply for proper licenses and registration
    1. Apply for an RMD registration here
    2. Learn more about the full RMD application process here
  7. Pay for license fees and background checks
  8. Select the building or location
  9. Hire your operations team and employees – everyone must pass a background check
  10. Contract with cultivators or manufacturers for products (or apply for a license to grow them yourself)
  11. Open your doors to the public

This process can be lengthy and requires nuanced documentation and steps along the way. An attorney can help you avoid common mistakes and get your dispensary doors opened as soon as possible.

Related Resources

Learn About Marijuana Dispensary Compliance

Find an Attorney to Review Your Business Plan

If you are unsure which marijuana business is right for you, or have compliance questions about the process, a business attorney focused on cannabis companies may be the right solution for you. Your attorney can be hands-on throughout the business formation process or advise you per issue as you work to get your dispensary or production doors open.

Find a Lawyer

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