How to Open a Marijuana Dispensary in Oregon

By FindLaw Staff | Legally reviewed by Amber Sheppard, Esq. | Last reviewed June 27, 2023

This article has been written and reviewed for legal accuracy, clarity, and style by FindLaw’s team of legal writers and attorneys and in accordance with our editorial standards.

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If you are over 21 years old and interested in starting a marijuana dispensary or other type of CBD business, it is important to be aware of regulation and compliance issues. It is also necessary to have a solid business plan to avoid the common pitfalls of new businesses.

 

This is especially true in Oregon, where the early legalization of marijuana — 1998 for medical use and 2014 for recreational use — means facing the competition of veteran cannabis business owners. Staying ahead of trends and compliance issues can give your new business a competitive edge.

Cannabis Business Laws You Need to Know

The table below outlines the laws and rules you need to follow in Oregon and where to learn more about getting your new business off the ground:

Important Laws to Know

Restrictions on Growing Marijuana

Who Can I Sell to?

What Can I Sell?

The Oregon Liquor and Cannabis Commission (OLCC) limits how much a cannabis dispensary can sell to one customer in a 24-hour span:

  • Two ounces of marijuana for recreational use (however only one ounce for delivery)
  • Eight ounces of marijuana at one time or within one day, and no more than 32 ounces in one calendar month if an OMMP registry identification cardholder or designated caregiver
  • Medical grade edibles can be up to 100mg THC per container for an OMMP registry identification cardholder or designated caregiver
  • Recreational edible users can buy up to 50mg THC per container but each serving has to be 5mg THC or less
  • Five grams of cannabinoid extract or concentrate – often used for vape pens or e-cigarettes
  • 16 ounces of solid forms of cannabinoid – usually an edible like a gummy, candy, or chocolate
  • 72 fluid ounces of liquid cannabinoid – such as body oil, consumable oil, or infused drinks
  • Four immature plants
  • 10 marijuana seeds

Note: Synthetic cannabinoids are “new psychoactive substances" (NPS) created by spraying lab-created chemicals on shredded plants. Many versions of NPS are illegal to create or sell.

License Types and Permits
  • Depending on your business's role in the cannabis industry, you will need to secure a variety of licenses, as well as pay a registration fee and an annual license fee
  • Marijuana retailer stores must have retail documentation and signs on display
  • You can apply online for licenses and permits after creating an online account
  • You can also apply for a Hemp Certificate (required to bring hemp flowers, concentrate, or extracts to licensed processors) or a Certificate for Research

Taxes
  • 17% tax on all products sold
  • Note some retailers apply 3% more for their city or municipality
  • Price and total tax must be clearly listed on the receipt
  • The Oregon Department of Revenue collects some marijuana taxes

What Should I Charge?

The cannabis market in Oregon is very competitive. You may want to check local pricing for marijuana products and carefully consider your business plan, funding, and loans when pricing items.

Cost To Open and Run a Dispensary
  • Fees for applications and licenses range from $100 to $5,000
  • Startup costs range from $325,000 to $1.13 million
  • Employee wages and security and surveillance system
  • Reliable and compliant dispensary POS system
  • Cannabis product inventory

Tribal Lands

Federal law recognizes that tribes have their own sets of laws on their land. Tribal governments regulate growing or selling cannabis or starting a cannabis business.

State Parks

Federal parks disallow cannabis products sold or possessed on protected federal park land.

State Lines

Transporting marijuana across state lines could result in a federal offense, even if you have a valid Oregon cannabis business license.

Location of Your Business

Zoning Laws
  • Your business can only be in a properly zoned area approved by a Land Use Compatibility Statement (LUCS)
  • Other Local laws may apply to your business depending on where you decide to have a store

Advertising

Laws are constantly changing – the OLCC has a bulletin that outlines the regulations on who you can and cannot advertise to.

Packaging and Labels
  • The OLCC has a packaging and labeling guide for both recreational and medical cannabis
  • Oregon cannabis businesses with a retail license must post several notices in their store to be in compliance with Oregon's regulatory framework Every store must post signs that ban minors from entering and ban on-site consumption of cannabis. Dispensaries must also post poison and pregnancy warnings and have at least one Educate Before You Recreate poster

Liability for DUIIs

Retailers of cannabis are not held liable when a customer buys marijuana and is later arrested or charged with driving under the influence of intoxicants (DUII). Driving while impaired by drugs is still illegal.

Effect on Full-Time Jobs

If you currently work for a cannabis-related business, you may need to consider conflict of interest or non-compete regulations in your employee contract.

Criminal Records

Oregon Governments and Organizations To Know

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 To Expect in the Process

OLCC Division 25 Section 845-025-1030 outlines the license application process. You can expect to:

  1. Submit your business forms to the Commission
  2. Request other parties to submit their forms, including:
  •  
    • Owners
    • Financial investors
    • Lenders
    • Anyone with more than 10% interest in the company
    • Partners
    • Other legal entities
    • Investors
    • Directors
    • Stockholders
    • Officers
    • Corporate partners
  1. Pay application fees to the Commission
  2. Submit names, fingerprints, information, and $35 for background checks for all owners, partners, and financial investors
  3. Submit requested details and business plan (listed in the marijuana business plan below with more information)
  4. Wait for the review of your application and background checks
  5. Wait for approval of the application and background checks

Once approved, you can begin creating your new cannabis business.

Marijuana Business Application Denial Process

If the Commission denies your application, you can request a reconsideration hearing. You will have the chance to address any concerns about the denied application. Show any changes to the application or people involved with a new form. You will likely need to pay the fees again.

Creating Your Marijuana Business Plan

When you start the application process for your startup business, the state requires specific details, including:

  • Personal information: A clear background check and forms focused on your experience and goals
  • Company info: Company name, address of where the business functions, and mailing address
  • Building or location info: Proposed floor plan for buildings, proof of right to occupy the premises, a Land Use Compatibility Statement (LUCS), plan for building security, employee qualifications, proposed training, product transport, etc.
  • Current Secretary of State phone number
  • Funding information for all third parties or legal entities
  • A business operating plan – Professional guilds or resources can help
  • Documents for the specific licenses you need (see table above)
  • $250 non-refundable application fee

Unsure where to start? Oregon.gov provides a checklist to help new businesses get on their feet and a detailed, step-by-step business guide for marijuana businesses.

Marijuana Industry Jobs

Many jobs are available in the cannabis industry:

  • Producer – Grows and harvests marijuana plants
  • Lab owner or lab tech – Tests plants and products for compliance with OHA rules
  • Processor – Transforms raw marijuana plants into other usable forms
  • Wholesaler – Buys products in bulk and sells to licensed stores
  • Retailer – Sells recreational products directly to the customer
  • Dispensary owner – Sells medical marijuana to licensed patients
  • Transporter – Drives plants to processors or products to stores

Related Resources

Learn About Marijuana Business Compliance

Do You Need an Attorney When Starting a Cannabis Business?

Some businesses can get off the ground without an attorney's help, but cannabis businesses are rarely among them. Due to the highly regulated industry and large financial investments required, you may want to seek legal advice on the type of business structure to choose and how to protect your best interests.

It can be useful to have your attorney picked out before a problem occurs. They can review your business plan to help you avoid costly mistakes. You can also find an Oregon attorney to handle the business startup and marijuana licensing for you, saving you time and money as you launch your business.

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.

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Restrictive federal laws and ever-changing state laws make the marijuana industry a dynamic environment for cannabis business owners. Before you open a cannabis business, make sure it is legal in your state, and follow your state laws. Once you decide on an LLC, S-corp, or C-corp business, you can register your business entity online using DIY business formation forms.

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