State Medical Marijuana Laws to Know for Your Business

State Medical Marijuana Laws to Know for Your Business

Hundreds of medical marijuana dispensaries, co-ops, collectives, and delivery services are currently doing business throughout the country. Dispensaries can expect to pay large amounts on start-up costs, including application fees and operating licenses.

Each state has its own requirements, and if you're considering opening a medical marijuana dispensary, you'll be dealing with plenty of hurdles: both regulatory and financial. Medical marijuana entrepreneurs also face the same challenges as any typical business owner, including marketing, logistics, and human capital. As there are different laws and costs per state, it's important to do your own research into local regulations and zoning policies.

Medical Marijuana Laws at a Glance

This article and the chart below covers the relevant laws relating to dispensaries in those states that allow the legal sale of medical marijuana. See Medical Marijuana Laws by State for patient-specific information and FindLaw's Marijuana and Other Highly Regulated Businesses section for more resources.

Alaska

Statute: Alaska Stat. AS 17.38

Dispensaries Authorized: Yes

Agency Administering Licenses: Marijuana Control Board (MBC)

Licenses Available: (1) retail stores; (2) cultivation facilities; (3) testing facilities; (4) manufacturers of edibles and other finished goods.

Relevant Regulations:

  • MBC will start accepting license applications by early 2016 and issue the first licenses in May of 2016.
  • $50 excise tax per one ounce of cannabis transferred or sold from cultivation facilities.
Arizona

Statute: A.R.S 36-2806, et. seq.

Dispensaries Authorized: Yes

Agency Administering Licenses: Arizona Department of Health Services (ADHS)

Licenses Available: See below

Relevant Regulations:

  • All medical marijuana dispensaries must operate as a "non-profit" and be licensed by ADHS.
  • All dispensaries must have a Medical Director (Arizona-licensed doctor) on staff.
  • ADHS selected licensed dispensaries by lottery in 2012 and will again accept applications in late 2015, anticipating approval of 126.
  • Application fee: $5,000
  • Dispensary must have at least $150,000 in start-up capital.
  • Applications must contain a business plan.
  • Before making a sale to a patient the dispensary is responsible for ensuring that the Patient's Paperwork or Medical Marijuana Registry Card is valid.
Arkansas

Statute: Arkansas Medical Marijuana Amendment of 2016 (effective November 9, 2016)

Dispensaries Authorized: Yes

Agency Administering Licenses: Medical Marijuana Commission

Licenses Available: (1) dispensaries; (2) cultivation facilities

Relevant Regulations:

  • The Arkansas Department of Health is to establish rules related to medical access to marijuana
California

Statute: California Health and Safety Code 11362.765, Medical Marijuana Program "MMP" Act

Dispensaries Authorized: Marijuana patients and primary caregivers can collectively or cooperatively cultivate marijuana.
Agency Administering Licenses: California State Board of Equalization (BOE)

Licenses Available: Must obtain a seller's permit.

Relevant Regulations:

  • Only non-profit cooperatives and collectives are allowed.
  • Cooperatives must obtain a business license and a seller's permit.
  • When distributing marijuana, cooperatives/collectives can only provide it free to members, distribute it in exchange for services that members provide to the collective or co-op, charge fees that are reasonably calculated to cover only overhead and operating expenses, or any combination of the above.
  • Marijuana transactions are subject to sales tax.
Colorado

Statute: Colorado Revised Statutes 18-18-406.3

Dispensaries Authorized: Yes

Agency Administering Licenses: Colorado Department of Revenue, Marijuana Enforcement Division (MED)

Licenses Available: (1) retail stores; (2) cultivation facilities; (3) testing facilities; (4) manufacturers of edibles and other finished goods; see Business License Application Process - Retail Marijuana for more details.

Relevant Regulations:

  • Providers must apply for a city Medical Marijuana Business license and a state license from the State Medical Marijuana Enforcement Division.
  • All shops must have a security camera pointed at the cash register so that it can record "the customer(s) and employee(s) facial features with sufficient clarity to determine identity."
  • Must also have security cameras recording the entrances and exits.
  • Must be at least 1,000 feet from a school or daycare center; local municipalities have the authority to prohibit dispensaries in their community.
  • Various other criteria apply including the seller must be at least 21 years old and have been a Colorado state resident for two years prior to submitting the application.
  • Application/License Fees: Application fees range from $250 to $2,500, while license fees range from $2,200 to $8,000 depending on type and scale of business, and other factors (see the MED Fee Table for details
  • Taxation: A 15 percent excise tax is levied on the average market rate for retail marijuana.
Connecticut

Statute: Conn. Agencies Reg., §§ 21a-408-14, 21a-408-20

Dispensaries Authorized: Yes

Agency Administering Licenses: Connecticut Department of Consumer Affairs

Licenses Available: Available for both growers and dispensaries

Relevant Regulations:

  • All dispensaries and growers must submit a Request for Application (RFA) license along with a proposed marketing and business plan.
  • Initial Dispensary Application Fee: $1,000; ($25,000 for producer applicants).
  • Registration Fee: $5,000.
  • The state will currently authorize at least three, but not more than 10 producer licenses.
  • The dispensary application period closed on September 18, 2015. It isn't clear when it will open again.
  • Only licensed pharmacists will be able to apply for and obtain a dispensary license.
  • Medical marijuana patients must register with Connecticut's Department of Consumer Protection (DCP).
Delaware

Statute: Title 16, Ch 49A of the Delaware Code

Dispensaries Authorized: Yes

Agency Administering Licenses: Delaware Health and Social Services
Division of Public Health

Licenses Available: Not currently. Only one facility is licensed to cultivate and distribute marijuana.

Relevant Regulations:

  • The state currently only licenses a single facility known as a "compassion center."
  • Undetermined if more licenses will become available.
  • Patients must register with a state-licensed, non-profit compassion center; compassion centers may not dispense more than three ounces of marijuana per patient in any 14-day period.
District of Columbia

Statute: D.C. Code Ann. 7-1671.01 - 7-1671.13

Dispensaries Authorized: Yes

Agency Administering Licenses: District of Columbia Department of Health (DOH)

Licenses Available: A tentative timeline is still being established.

Relevant Regulations:

  • Dispensaries/cultivation centers may dispense medical marijuana to qualified patients in any form deemed safe which allows patients to eat, inhale, or otherwise use medical marijuana for medical purposes.
  • Medical dispensaries may grow up to 500 plants on site at any one time.
  • Both non-profit and for-profit organizations are eligible to operate the dispensaries.
  • Much of D.C. is federal land. The new law does not does it change federal law.
Florida

Statute: Use of Marijuana for Debilitating Medical Conditions (effective January 3, 2017)

Dispensaries Authorized: Yes

Agency Administering Licenses: Florida Department of Health

Licenses Available: To be determined by the implementing agency.

Relevant Regulations:

  • The law was written to specifically cover the following conditions: cancer, epilepsy, glaucoma, HIV, AIDS, PTSD, ALS, Crohn's disease, Parkinson's disease, and multiple sclerosis
Hawaii

Statute: Hawaii Rev. Stat. 329-121 to 329-128

Dispensaries Authorized: Yes

Agency Administering Licenses: Hawaii Department of Health (DOH)

Licenses Available: Still being determined.

Relevant Regulations:

  • Law passed in July 2015 set a time frame for providing a system for license application and selection.
  • Dispensary applications will be available to the public on Jan. 11, 2016.
  • Applicant cannot have any felony convictions and must have minimum $1.2 million in escrow for at least 90 days prior to turning in their application.
  • The law allows for eight separate licenses to be obtained in the state on Oahu, Hawaii Island, Kauai, and Maui.
  • Dispensaries may issue four ounces every 15 consecutive days or 8 ounces per 30 consecutive days.
Illinois

Statute: Compassionate Use of Medical Cannabis Pilot Program Act

Dispensaries Authorized: Yes

Agency Administering Licenses: Illinois Department of Public Health (DOH)

Licenses Available: Still being determined.

Relevant Regulations:

  • Dispensaries must be registered with the Illinois Department of Financial and Professional Regulation to dispense medical cannabis they get from a state-registered cultivation center.
  • The dispensary has to have a business registration, and principal officers and employees must also be licensed separately before the dispensary can open for business in Illinois.
  • The state has only issued a single dispensary liscense and has yet to issue any licenses for cultivation, intending to offer an initial 21 cultivator licenses and an estimated 60 medical dispensary licenses.
  • Qualifying patients may obtain two and a half ounces of medical grade marijuana every two weeks from a state-regulated dispensary.
Maine

Statute: Maine Rev. Stat. tit. 22, 2421 - 2430

Dispensaries Authorized: Yes

Agency Administering Licenses: Maine Department of Licensing and Regulatory Services (DLRS)

Licenses Available: Still being determined.

Relevant Regulations:

  • Up to eight non-profit dispensaries authorized, one for each public health district, are allowed under state law.
  • All principal officers and board members of a registered dispensary must be residents of the State of Maine among other conditions.
  • A registered dispensary may dispense no more than 2 ½ ounces of prepared marijuana to a qualifying patient or to a primary caregiver on behalf of a qualifying patient during a 15-day period.
Maryland

Statute: Natalie LaPrade Medical Commission Regulations, Subtitle 62, § 10.62.01-10.62.35

Dispensaries Authorized: Yes

Agency Administering Licenses: Maryland Medical Cannabis Commission (MMCC)

Licenses Available: Still being determined.

Relevant Regulations:

  • Application fee is $1,000,
  • State will authorize 109 dispensaries, 15 cultivators and an undetermined number of processors like in early 2016.
  • Each patient may only obtain 120 grams of usable cannabis (primarily dried flower) as a 30-day supply or 36 grams of THC as a 30-day supply of cannabis-infused products.
Massachusetts

Statute Law for the Humanitarian Medical Use of Marijuana [PDF]

Dispensaries Authorized: Yes

Agency Administering Licenses: Massachusetts Department of Public Health (DPH)

Licenses Available: Still being determined.

Relevant Regulations:

  • A total of 14 dispensaries have been licensed and the first one opened in June 2015.
  • Rejected applicants can reapply in 2015 and the state plans to issue licenses for up to 35 dispensaries, though it is unclear when or how additional licenses will be made available.
  • Applicants must pay the following fees: Application of Intent $1,500, Management and Operations Profile $30,000.
  • Each dispensary must show they have initial startup capital of $500,000.
Michigan

Statute: Michigan Compiled Laws 333.26421 - 333.26430

  • The state provides five different types of licenses for businesses involved in the production and/or sale of medical marijuana. These include licenses for (1) growers, (2) processors, (3) retail dispensaries, (4) secure transportation, and (5) testing. 
  • Registered medical marijuana users can produce their own marijuana, have a caregiver produce it on their behalf, or purchase from licensed dispensaries.
Minnesota

Statute: Minnesota Statutes 2012, section 13.3806

Dispensaries Authorized: Yes

Agency Administering Licenses: Minnesota Department of Health (DOH)

Licenses Available: Manufacture and Distribution licenses only

Relevant Regulations:

  • Eight state-run cannabis dispensaries to begin distribution on July 1, 2015.
  • The state has limited the manufacture and distribution of marijuana.
  • Both types of businesses are limited in number and no new businesses will currently be permitted.
  • All patients with a qualifying condition must pay an annual registration fee in order to be eligible to purchase medical cannabis.
  • There will also be a separate fee for medical cannabis, payable at patient centers.
Montana

Statute: Montana Code Section 50-46-301, et seq. (Montana Marijuana Act); Montana Medical Marijuana Initiative (effective June 30, 2017)

Dispensaries Authorized: Yes

Agency Administering Licenses: Department of Public Health and Human Services

Licenses Available: (1) cultivation; (2) manufacturing

Relevant Regulations:

  • Although the state legislature restricted licensed providers to 3 medical marijuana patients, this restriction has been removed by the Montana Medical Marijuana Initiative.
  • Applies to "debilitating" medical conditions which can include: cancer, glaucoma, HIV/AIDs, cachexia, severe chronic and persistent pain, intractable nausea/vomiting, epilepsy, multiple sclerosis, Crohn's disease, painful peripheral neuropathies, central nervous system disorders, or PTSD.
Nevada

Statute: Nevada Rev. Stat. 453A.010 - 453A.240

Dispensaries Authorized: Yes

Agency Administering Licenses: Nevada Department of Health and Human Services

Licenses Available: Manufacture and Distribution licenses only

Relevant Regulations:

  • A limited number of medical marijuana dispensaries operate in the state in addition to cultivation facilities, testing labs, and producers of edible marijuana products.
  • The law provides for the establishment of 66 dispensaries and 200 production facilities.
  • New dispensary applications cannot presently be filed.
New Hampshire

Statute: Chapter 126-X

Dispensaries Authorized: Yes, Alternative Treatment Centers (ATC)

Agency Administering Licenses: New Hampshire Department of Health and Human Services (DHHS)

Licenses Available: Production and Distribution

Relevant Regulations:

  • The state licensed a limited number of (ATCs) for the production and distribution of marijuana.
  • The state's non-profit alternative treatment centers have to be located more than one thousand (1,000) feet from schools or other drug-free zones and be staffed by employees over the age of 21 who have no felony convictions and who will be required to wear identification badges issued by the treatment center.
New Jersey

Statute: N.J. Stat. Ann. §§ 24-61-1-10 (2015), N.J. Stat. Ann. §24:6I-3 (2010)

Dispensaries Authorized: Yes, Alternative Treatment Centers (ATC).

Agency Administering Licenses: New Jersey Department of Health (DOH)

Licenses Available: Production and Distribution
Relevant Regulations:

  • A limited number of medical marijuana dispensaries operate in the state.
  • Licenses for marijuana businesses are not presently available.
  • Applicants and their employees must make extensive disclosures and are subject to background checks among other requirements.
  • Medical marijuana will be packaged in 1/4 ounce denominations. The patient's physician will determine the proper dosage; however, the maximum amount allowed by law is 2 ounces in a 30 day period.
New Mexico

Statute: Lynn and Erin Compassionate Use Act, 26-2B-1 et seq. NMSA 1978

Dispensaries Authorized: Yes, Licensed Non-Profit Producers (LNPP)

Agency Administering Licenses: New Mexico Department of Public Health (DPH)

Licenses Available: Production and Distribution

Relevant Regulations:

New York

Statute: New York Compassionate Care Act: Proposed Regulations

Dispensaries Authorized: Yes

Agency Administering Licenses: New York State Medical Marijuana Program

Licenses Available: Production and Distribution

Relevant Regulations:

  • Five producers of cannabis-based preparations and up to 20 dispensing centers will be licensed by the state.
  • The program is set to be implemented by January 5, 2016.
  • Approved forms of medical cannabis include liquids and oil for vaporization or administration via inhaler as well as capsules to take orally.
North Dakota

Statute: North Dakota Compassionate Care Act (effective December 8, 2016)

Dispensaries Authorized: Yes

Agency Administering Licenses: North Dakota Department of Health

Licenses Available: (1) cultivate; (2) manufacture; (3) dispense

Relevant Regulations:

  • The law applies to those with "debilitating" medical conditions which can include: cancer, HIV/AIDS, Hepatitis C, ALS, PTSD, Alzheimer's disease/dementia, Crohn's disease/fibromyalgia, spinal stenosis, chronic back pain, glaucoma, epilepsy or any other chronic or debilitating disease
  • Qualified patients can receive up to 3 ounces of marijuana
  • Patients over 40 miles away from a registered facility can grow marijuana in their homes
Oregon

Statute: Oregon Rev. Stat. 475.300 - 475.346

Dispensaries Authorized: Yes

Agency Administering Licenses: Oregon Medical Marijuana Program

Licenses Available: Manufacture, Distribution

Relevant Regulations:

  • Starting October 1, 2015, registered medical marijuana dispensaries may sell limited recreational marijuana products (dried leaves and flowers, immature marijuana plants and seeds).
  • The state requires separate licenses and registration for growers and dispensary operators.
  • Medical dispensaries cannot sell marijuana except to persons registered with the state.
  • Only one quarter ounce of dried leaves and flowers may be purchased by a retail customer in one day.
  • Dispensaries cannot be within 1,000 feet of each other or a school.
Rhode Island

Statute: Rhode Island Gen. Laws 21-28.6-1 - 21-28.6-2

Dispensaries Authorized: Yes, Compassion Centers

Agency Administering Licenses: Rhode Island Department of Public Health (DPH)

Licenses Available: Manufacture and Distribution licenses

Relevant Regulations:

  • The state has three dispensaries currently in operation.
  • Licenses for marijuana businesses are issued as the state determines need.
  • Patients may only possess 2.5 ounces of usable marijuana.
Vermont

Statute: Vermont Stat. Ann. tit. 18, 4471- 4474d

Dispensaries Authorized: Yes

Agency Administering Licenses: Department of Public Safety Marijuana Registry

Licenses Available: Cultivate, Manufacture, Transfer, Transport, Dispense.
Relevant Regulations:

  • Dispensaries must be licensed non-profit entities.
  • No more than four dispensaries can be registered in the state at any given time.
  • The state will announce when licenses become available.
Washington

Statute: Washington Rev. Code 69.51A - 69.51A.901

Dispensaries Authorized: Retail providers may sell medical cannabis.

Agency Administering Licenses: Washington Department of Public Health (DPH)

Licenses Available: Still being determined.

Relevant Regulations:

  • Any adult age 21 or older may buy any combination of the following from a licensed retail store: One ounce of useable marijuana; Sixteen ounces of marijuana-infused product in solid form; Seventy-two ounces of marijuana-infused product in liquid form; or Seven grams of marijuana concentrate.
  • Washington issued a limited number of licenses, but they are not currently available.
  • The state requires marijuana businesses to hold license as a producer, processor, or retailer of marijuana.
  • No business can hold all three licenses.
  • A producer may also be a processor, but no producer or processor may be a retailer.

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.

Related Resources for State Medical Marijuana Laws

What Are Your Options Going Forward?

The increasing number of jurisdictions decriminalizing the use of marijuana for medical purposes expands treatment options for patients, but also opens up greater business opportunities. However, the changing state of the law can make things a little challenging for businesses. That's where an attorney can make all the difference. Reach out to an experienced business law attorney in your area today to learn more.

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