How to Open a Dispensary in Washington D.C.
Unlock the steps to launch a thriving dispensary in Washington D.C. Stay compliant with regulations and explore opportunities in this dynamic market
Isaac Bock
Managing Director1:If you’ve been in the cannabis industry long enough, you might be interested in learning how to launch a cannabis dispensary in Washington DC., and other methods to start a business.
Washington DC., has some of the nation’s most complex cannabis rules, and many entrepreneurs are unsure of how to launch their cannabis business there.
Check out these easy-to-follow instructions to assist you in engaging with D.C.’s cannabis sector and become the city’s top dispensary service. This guide has everything you need to know for establishing a cannabis business in D.C.
Overview of Cannabis in Washington DC
Washington DC., legalized cannabis for both medicinal and recreational use in November 2014. Washington DC. However, it has now stopped accepting applications for the licenses needed to operate marijuana dispensaries. As a result, just a few companies operate in the state’s dispensary and delivery system.
In 2014, Initiative 71 was adopted by voters in Washington DC, legalizing marijuana for recreational purposes. The city first authorized the use of medicinal cannabis in 1998, but congressional opposition prevented implementation, pushing out the start of sales until 2013.
Five growing facilities and three dispensaries were given licenses to cultivate and sell marijuana as of March 2017, and they are all now open.
The Department of Health, which oversees the marijuana program, will announce if and when it becomes essential to resume the application process for adding new facilities.
History of Cannabis Legalization in Washington DC
The Safe Cannabis Sales Act of 2019 is a piece of legislation by Mayor Muriel Bowser that would permit the selling of recreational marijuana in Washington DC
The law promotes equity to ensure that the advantages of the new regime result in D.C.’s most disadvantaged areas through employment and investments in housing, improve public health and safety, clarify how cannabis and cannabis-related goods should be used, and clarify those uses.
Current State of the Cannabis Market in Washington DC
D.C. maintains a consistent population of roughly 100,000 people. The District of Columbia has 5,219 certified medical patients, based on the Department of Health Regulation and Licencing Administration. Since marijuana buyers generally spend $1,000 a year, Washington DC, a relatively tiny city, is looking at a million-dollar industry.
In 2025, the prediction projects that marijuana sales in Washington DC, will be worth around 186 million dollars.
In 2013/2014, Washington DC granted licenses to several dispensaries and growing facilities. The license application procedure is currently closed. There are now three dispensaries and five growers in operation.
Social Equity Programs for Cannabis in Washington DC
The Medical Cannabis Social Equity Fund jointly operated by the Alcoholic Beverage Regulation Administration (ABRA) regulates the District’s medicinal cannabis program, and the Department of Small and Local Business Development of Washington DC
In a report on the budget released in April 2023, the D.C. Council’s Committee on Business and Economic Development (CBED) suggested setting up the fund, noting the requirement for a well-financed social equity program that would give marginalized minority groups a chance to compete in the medical cannabis industry fairly.
The D.C. Council has not yet given final approval to the enormous $19.5 billion plan for next year, so the social fund for equity is still merely a concept at this time.
Some equity-focused criteria are already included in the licensing procedure for the medicinal marijuana program in D.C.
For instance, ABRA gives a small but potentially decisive boost to applications from businesses that qualify as “equity impact enterprises,” — meaning they are primarily owned by residents who are “economically disadvantaged” or have faced “racial or ethnic or cultural bias.”
Types of Dispensary Licenses in Washington DC
The Act establishes and entrusts the Alcoholic Beverage and Cannabis Administration (“ABCA”) and Alcoholic Beverage and Cannabis Board (“Board”) to create categories of cannabis licenses, issue licenses, and regulate the retail sale and distribution of cannabis and cannabis products.
Cultivation License
The maximum number of marijuana plants that a licensee may cultivate and harvest in the District at any given time is based on one of the following categories of cultivation licensees:
1:Class A—2,000 plants
- The minimum annual license fee: $ 5,000
2:Class B—6,000 plants
- The minimum annual license fee: $7,000
3:Class C—10,000 plants
- The minimum annual license fee: $10,000
- Initial application cost: $1,000
Manufacturer License
A manufacturer’s license enables the holder to prepare, package, and label cannabis goods obtained from a cultivation licensee for transfer to authorized testing labs or for retailing and shipping to authorized distributors and retailers.
- The minimum annual license fee: $ 6,000
- Initial application cost: $1,000
Retailer License
A retailer’s license holder may sell and distribute cannabis and cannabis-related items directly to a registered retailer or transfer them to a registered testing facility.
- The minimum annual license fee: $3,000
- Initial application cost: $1,000
Other License Types for Cannabis in Washington DC
Testing Facility License
A license for a testing laboratory enables the licensee to examine the health risks and potency of manufactured goods and plants. Furthermore, it permits the delivery and pickup of samples from one licensee to another.
- The minimum annual license fee: $ 5,000
- Initial application cost: $1,000
Cannabis Third-Party Social Equity Delivery
A cannabis social equity delivery license entitles the holder, subject to specific restrictions, exceptions, and limitations, to deliver cannabis and cannabis-related items directly from a certified small business or an off-premises retailer to customers at both homes and businesses within the District.
- Initial application cost: $50
Conditional License (available for all except Testing Laboratory).
Gives a Courier, Cultivation Centre, Internet Retailer, Manufacturer, or Retailer license applicant who does not yet have a planned site up to one (1) year to find a place and submit all necessary paperwork and payments to ABCA.
Internet Retailer License
Businesses without a visible storefront can sell cannabis and related products online and through mobile applications for delivery to qualified patients.
- Initial application cost: $1,000
Understanding the Cannabis Market in Washington DC
All residents of Washington DC older than 21, can buy and own up to 2 ounces of marijuana. District residents are permitted to cultivate and use cannabis on their property.
As long as no money, products, or services are traded, they may exchange marijuana. This separates the cannabis market in Washington DC, from other legal cannabis markets.
In Washington DC, obtaining a license for a recreational cannabis company is not currently possible, but if these new measures are passed, people and organizations could do so.
Application Process for a Dispensary License
Only designated application periods allow for the submission of applications. The District chooses applicants for license awards using a point system.
In the application process, applicants must address a list of requirements, and points are awarded for each area covered. (Section 5404 of 22 DCMR C) The areas in question consist of:
- Location
- Staff plan
- Security
- Inventory
- Marketing strategy and business plan
- Influence on the community
- Educational resources
Check: Medical cannabis open application period.
Note: New legislation that is passed from time to time may alter state laws. Even though we offer the most recent information, you should still speak with a lawyer or do your own legal research to confirm the state law(s) you are looking into.
Steps Involved in Obtaining a License
- Meet the qualifying conditions, which often include those relating to place of residence, criminal histories, financial capability, and adherence to regional zoning laws.
- Find an appropriate location: Identify an area that satisfies the zoning specifications for running a marijuana dispensary in Washington DC.
- Create a business plan: Create a thorough business plan that details your dispensary’s activities, organizational structure, marketing plans, security precautions, and financial predictions.
- Submit your application: Fill out the dispensary license application completely, then send it to the relevant regulatory body.
- Pay the applicable costs and submit them together with your submission. Please refer to the regulating authority’s most recent fee schedule since the charge amount may change.
Required Documentation for a License
You must fulfill the requirements for general eligibility, including:
- Proof of character
- Proof of adulthood
- No criminal convictions
- Letter of Intent
Education/training certificates and criminal records are necessary for the following people involved in the business:
- Directors
- Officers
- Members
- Incorporators
- Agents
- Workers
- Managers
Timelines for Obtaining a License
Even if Washington DC were allowing new applications, it would take a while to start a cannabis business. Thanks to the high startup cost, numerous licenses, and the tedious process of securing suppliers and employees, expect at least a year before the money starts flowing.
The application period for unlicensed businesses to seek a license was extended from 60 to 90 days, and unlicensed companies can also now apply for cultivation center licenses.
Financing and Business Plan for a Dispensary
Similar to launching any other type of business, if you want to operate a cannabis business in D.C., you must have all of your ducks in a row.
You may need legal assistance to create a comprehensive business and financial strategy for your firm that will enable you to obtain the necessary licenses to operate in D.C.
Types of Financing Available
The federal ban on cannabis makes it difficult for cannabis firms to use standard financial systems, though. For reliable and up-to-date information about funding alternatives in Washington DC, it is necessary to seek advice from local authorities and professional organizations.
Equity financing, in which company shares are sold in return for money, and debt financing, in which loans are obtained from banks or other private lenders, are two common funding methods for cannabis firms.
Private and angel investors may also contribute money in exchange for ownership holdings. You may also look at crowdfunding websites created exclusively for the cannabis sector. State and local grants may also be accessible to offer funding or support for particular company operations.
Importance of a Solid Business Plan
In Washington DC, the cannabis sector is much like any other industry. It doesn’t matter what your experience is; you will need a business strategy, a financial plan, and capital to launch your company.
You must also be older than 21 and abide by all applicable federal, state, and municipal commerce laws, including licensing, to work in the cannabis sector.
You can start using the steps below once you’ve spoken to an expert or lawyer, considered the startup fees, and determined your licenses.
- Learn about the legislation
- Improve your capabilities
- Identify your brand.
- Promote your brand.
- Advertise on other websites to attract local clients
- Promote your business
- Stock up on supplies
- Open a business and create promotional materials
- Go to events
- Establish connections with individuals in the cannabis sector in D.C.
Risk Management Plan
The specific hazards and risks that cannabis businesses must manage include theft, regulatory compliance, and negative publicity. The following elements must be included in any risk management plan;
- Identifying potential threats
- Detailed evaluation
- Assessment based on the severity of the risks
- Keeping an eye on how much danger your company’s activities are exposed to
- Elimination through the use of an effective risk management technique
Market Research and Location for a Dispensary
You can decide on the ideal location for your business by conducting in-depth market research before opening a dispensary.
Overview of Washington DC Market for a Dispensary
D.C. maintains a consistent population of roughly 100,000 people. The Department of Health Regulation and Licensing Administration reports that there are 5,219 registered medical patients in the District.
Since marijuana buyers generally spend $1,000 a year, Washington, D.C., a relatively tiny city, is looking at a million-dollar industry.
Trends and Competition in Washington DC Cannabis Industry
The Washington DC cannabis market has been going under drastic changes recently. A law to make significant modifications to the medicinal marijuana program has been signed by the mayor of Washington DC
This includes removing restrictions on cannabis company licensing, giving tax breaks to business owners, advancing social equality, and developing newly licensed businesses, such as on-site consumption facilities and cannabis cooking workshops.
Additionally, it will provide a road for current “gifting” businesses who already swap non-cannabis goods for “free” marijuana products to enter the licensed market.
The Act also prioritizes business licenses for those disproportionately affected by the drug war to achieve social equity in the industry.
Location Requirements for a Dispensary
Medical marijuana dispensaries in Washington DC have to abide by the following rules:
- Must be 300 feet or less from a school or recreational facility
- It cannot be located anywhere that also sells alcohol
- Cannot operate any other form of business in the area
- Cannot be in a neighborhood with a home
Insurance Requirements for a Dispensary
There are no current cannabis business insurance requirements in Washington DC However, given the nature of the business, having an insurance company at your back is still advised by industry experts.
Costs of Opening and Running a Dispensary
The yearly registration costs in Washington DCare $10,000 plus a $5,000 processing cost. The annual registration charge for a cultivation center is $5000, and a $500 initial processing fee. Additionally, there are registration costs for employees, which may cost about $100 each.
Before accounting for operating expenses and items like security systems and point-of-sale systems, starting a dispensary in Washington DC, costs at least $200,000.
Resources for Potential Entrepreneurs in Washington DC
Additional Resources and Links for Opening a Dispensary in Washington D.C.
- Medical Cannabis – Business License and Endorsement Application and Instructions
- Medical Cannabis – Applications and Forms
- Medical Cannabis Training and Info Sessions
- Medical Cannabis Program
- Medical Cannabis Open Application Period 2023
FAQ about Opening a Dispensary
How Much Does It Cost to Open and Run a Dispensary?
Before considering operating expenses and things like security systems and point-of-sale systems, starting a dispensary in Washington DC, costs at least $200,000.
Running a dispensary would have additional costs, so anything above $200,000, depending on the location and needs.
What Are the Location Requirements for a Dispensary?
Medical marijuana dispensaries in Washington DC have to abide by the following rules:
- Must be 300 feet or less from a school or recreational facility
- It cannot be located anywhere that also sells alcohol
- Cannot operate any other form of business in the area
- Cannot be in a neighborhood with a home
What Types of Insurance Policies Are Required for a Dispensary?
There are no current cannabis business insurance requirements in Washington DC
How Long Does It Take To Obtain a Dispensary License?
The application period for unlicensed businesses to seek a license was extended from 60 to 90 days in 2023. However, it can take up to a year to obtain a license due to lengthy documents and requirements.
What Are the Regulations for Advertising a Dispensary?
The regulations are as follows:
- A registered store’s window cannot show advertisements mentioning the cost of medicinal marijuana.
- Advertisements for medicinal marijuana cannot be placed on the front of any window or on the interior or exterior of any door.
- No signs promoting medicinal marijuana can be lit on the exterior of any licensed facility or in the District.
Can I Have More Than One Dispensary Location?
Only one medicinal marijuana dispensary may be registered under one owner.
In a Nutshell
The legal cannabis market in Washington DC, is expanding, changing, and strictly regulated. Businesses that want to thrive must get the permits and insurance coverage to run lawfully and set themselves up for future growth.
Seek consultants to assist your firm in obtaining licenses, locating and hiring the best individuals in our sector, carrying out its business strategy, and navigating D.C.’s always-changing regulatory framework.
