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How to Open a Marijuana Dispensary in Washington

Medical marijuana has been legal in Washington state since 1998. In 2012, the state also decriminalized the recreational use of marijuana. Since then, the cannabis industry has boomed, and entrepreneurs have opened successful businesses. While most businesses come with risk, however, the cannabis industry is particularly risky, with numerous complex regulations and requirements.

If you are interested in starting your own cannabis business and running a dispensary, take the time to understand Washington's rules and regulations for marijuana businesses. The table below outlines the relevant laws that you need to be aware of before opening a dispensary in Washington.

Relevant Laws

  • Chapter 314-55 of the Washington Administrative Code: General laws on marijuana licenses, application process, requirements, and reporting
  • Initiative measure No. 502 legalizes recreational marijuana and outlines licensing requirements

Are There Different Types of Licenses Available?

There are three types of licenses are available for dispensaries;

Each application has a unique set of requirements.

Criminal History That Might Prevent You From Getting a License

The Washington Liquor and Cannabis Board will do background checks, so applicants should disclose any criminal history.

The board uses a point-based system to determine which crimes bar a person from obtaining a license. The board will not issue licenses to people who are assigned eight points or higher. For instance, a person will not qualify for a dispensary permit with a felony conviction (felonies are generally assigned 12 points).

You can find a list of crimes that might bar an applicant from obtaining a license on the Washington State Legislature’s website.

How Old do You Need to Be to Open a Dispensary?

You must be over 21 years old to apply for a license

Is There a Residency Requirement to Open a Dispensary?

You must reside in the state of Washington for at least six months prior to filing an application

Where Can Your Dispensary Be?

Revised Code of Washington (RCW) section 69.50.331(8) prohibits licensing of premises within one thousand feet of the following facilities:

  • Primary and secondary schools
  • Playgrounds
  • Recreational facilities
  • Public parks
  • Public transit centers
  • Child care centers
  • Libraries

Cities and counties can reduce the distance to a minimum of 100 feet by enacting ordinances. Exceptions apply.

Taxation Requirements

  • Cannabis excise tax in Washington is 37%.
  • Consumers are expected to pay the tax when they purchase cannabis.
  • Per RCW 82.08.9998, cannabis purchased for medical purposes is exempt from that state’s cannabis taxes.

How Much Are the Application Costs to Open a Dispensary?

You need to pay a nonrefundable $250 application fee.

You should also keep in mind the capitalization requirements and indirect costs that come up when starting a business. According to Marijuana Business News, these costs range from $43,900 to $135,000.

Hours of Operation

The state law permits cannabis businesses to operate between 8 a.m.–12 a.m.

 

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.

Who Is Responsible for Issuing Licenses?

The Washington Liquor and Cannabis Board is responsible for licensing and regulating Washington’s cannabis industry. You will need to check with the board to determine whether it is accepting new applications for licenses.

Who Qualifies for a Marijuana License?

Individuals and business entities can qualify for a license if the license is issued in the names of “the true party of interest.” Sole proprietorships, general partnerships, and corporations are among the parties that would qualify as parties of interest. Look at WAC 314-55-035 to see who qualifies.

Application Process

Once you submit your application to get a marijuana license, a marijuana investigator from the board will contact you to ensure you have presented the required documents. Before the board starts processing your application, it needs to obtain the following information:

  • Information about your business location and structure, including floor plans, lease information, purchase agreements
  • Forms on your proposed business structure.
  • Information on your criminal history
  • Information verifying your identity. This includes a copy of approved identification and your fingerprint cards
  • Information about your finances, including a source of funds statement, a copy of your tax returns and previous bank statements
  • Sworn statements and affidavits

Was Your Marijuana License Application Denied?

The board might deny your application for a number of reasons. If that happens, you have one of two options; request an administrative hearing as per the Administrative Procedure Act of the state, or re-apply when the board opens applications again.

Is There a Limit on How Much I Can Sell in a Dispensary?

Although Washington has decriminalized marijuana, you still can’t sell marijuana beyond the specified limit. Section 15 of the Initiative measure No. 502 states that in one day, a licensed retailer can only sell either:

  • 1 ounce of useable marijuana; or
  • 72 ounces of liquid form marijuana-infused products

Note: At the time this article was written, Washington state was not accepting applications for producers, retailers, processors, and growers’ licenses. You should visit the board’s website to see when applications do open.

Are the Laws Similar Throughout the State?

Washington law gives cities and counties broad powers to regulate the cannabis industry in their respective areas. For instance, a city may reduce the licensing of dispensaries located less than 1,000 feet from the facilities listed above. Note, however, that the distance cannot be less than 100 feet.

City ordinances may also limit the number of dispensaries allowed in a state. The, City of Everett, for instance, limits the number of cannabis businesses to only five stores. Similarly, the Renton Ordinance No. 5816 limits marijuana shops in the city of Renton to five retail stores.

Additional Resources

Do You Need an Attorney to Assist With Opening a Dispensary?

Getting the appropriate documents ready and making sure you have complied with all the regulatory requirements may prove to be difficult because the cannabis industry is heavily regulated in Washington. You may want to find a Washington cannabis business and commercial attorney to assist with the process.

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