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.

Alaska

Statute(s): Alaska Statutes Section 17.38.010, et seq.

Dispensaries Authorized: Yes

Agency Administering Licenses: Alcohol and Marijuana Control Office

Licenses Available: (1) retail stores; (2) cultivation facilities; (3) testing facilities; (4) manufacturing facilities.

Relevant Regulations:

  • Anyone with a direct or indirect financial interest must be a resident of Alaska.
  • Cultivation facilities must file a monthly tax return and pay an excise tax.
Arizona

Statute(s): Arizona Revised Statutes Section 36-2806, et seq.

Dispensaries Authorized: Yes

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

Licenses Available: See below

Relevant Regulations:

  • ADHS periodically accepts dispensary registration certificate applications.
  • ADHS selected licensed dispensaries by lottery in 2012 and again in 2016.
  • All medical marijuana dispensaries must operate as a "non-profit" and be licensed by ADHS.
  • Before making a sale to a patient, the dispensary is responsible for verifying that the patient's medical marijuana card is valid.
Arkansas

Statute(s): Arkansas Constitution of 1874 Amendment 98, Section 1, et seq.

Dispensaries Authorized: Yes

Agency Administering Licenses: Arkansas Medical Marijuana Commission

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

Relevant Regulations:

  • Dispensaries and cultivation facilities are subject to reasonable inspections by the Alcoholic Beverage Control Division.
  • Records must be kept for the current year and 3 proceeding years.
  • Cultivation facilities and dispensaries are required to have video surveillance and alarm systems.
California

Statute(s): California Business & Professions Code Sections 26000, et seq.

Dispensaries Authorized: Yes

Licenses Available: (1) retailers; (2) distributors; (3) testing labs; (4) microbusinesses; (5) manufacturers; (6) cultivators.

Agency Administering Licenses: Three state licensing authorities: the Bureau of Cannabis Control, the Manufactured Cannabis Safety Branch, and CalCannabis Cultivation Licensing. The type of license required (i.e. cultivator, retailer, testing lab, etc.) will determine which agency will issue the license.

Relevant Regulations:

  • Although there are 3 licensing authorities, the Bureau of Cannabis Control is the lead agency in developing regulations for adult-use and medical cannabis.
  • Certain medical marijuana sales are exempt from sales and use tax.
  • There is a 15% excise tax imposed upon purchasers of marijuana, which retailers are required to collect and pay to their distributor.
  • There is a cultivation tax imposed on marijuana cultivators, who are required to pay to either their distributor or manufacturer.
Colorado

Statute(s): Colorado Revised Statutes Section 18-18-406.3 and Section 25-15-106; Colorado Constitution of 1876 Article XVIII Section 14

Dispensaries Authorized: Yes

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

Licenses Available: (1) medical marijuana center; (2) medical marijuana optional premises cultivation; (3) medical marijuana infused product manufacturer; (4) medical marijuana testing facility; (5) medical marijuana transporter; (6) medical marijuana operator; (7) medical marijuana research and development facility or cultivation. Colorado also offers separate retail marijuana business licenses.

Relevant Regulations:

Connecticut

Statute(s): Connecticut General Statutes Section 21a-408h and Section 21a-408i

Dispensaries Authorized: Yes

Agency Administering Licenses: Connecticut Department of Consumer Protection

Licenses Available: See below.

Relevant Regulations:

  • Applications for dispensary and producer licenses are accepted on a periodic basis.
  • All dispensaries and producers must submit a Request for Application (RFA) along with an initial application fee of $1,000 if applying for a dispensary license or $25,000 if applying for a producer license.
  • Only licensed pharmacists are able to apply for and obtain a dispensary license.
Delaware

Statute(s): Delaware Code Title 16 Section 4901A, et seq.

Dispensaries Authorized: Yes

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

Licenses Available: None currently. One facility - called a "compassion center" is open, and a second facility is opening soon.

Relevant Regulations:

  • Patients must be a Delaware resident.
  • 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(s): District of Columbia Code Division I, Section 7-1671.01, et seq.

Dispensaries Authorized: Yes

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

Licenses Available: See below.

Relevant Regulations:

  • Applications for a dispensary or cultivation center license are accepted on a periodic basis.
  • 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(s): Florida Statutes Title XXIX, Public Health Section 381.986

Dispensaries Authorized: Yes

Agency Administering Licenses: Florida Department of Health

Licenses Available: See below.

Relevant Regulations:

  • The dispensing application process period ended in July 2015, and it's unclear if there will be another application period.
  • Dispensing organizations are required to grow and process low-THC cannabis or medical cannabis within enclosed structures and in a room separate from other plants.
  • Dispensing organizations are not permitted to dispense more than a 45-day supply of low-THC cannabis or medical cannabis to a patient, and must verify that the patient has an active registration in the compassionate use registry.
Hawaii

Statute(s): Hawaii Revised Statutes Division 1 Section 329D-1, et seq.

Dispensaries Authorized: Yes

Agency Administering Licenses: Hawaii Department of Health (DOH)

Licenses Available: Not currently and it's unclear whether more licenses will be issued in the future.

Relevant Regulations:

  • An individual applicant must be a legal resident of Hawaii for not less than 5 years preceding the date of application and cannot have any felony convictions.
  • The law allows for eight separate licenses to be obtained in the state on Oahu, Hawaii Island, Kauai, and Maui.
  • No person can have a dispensary license in more than one county.
Illinois

Statute(s): Illinois Statutes Chapter 410 Section 130/1, et seq.

Dispensaries Authorized: Yes

Agency Administering Licenses: Illinois Department of Public Health (IDFPR) for dispensaries and Illinois Department of Agriculture for cultivation centers.

Licenses Available: See below.

Relevant Regulations:

  • The IDFPR is authorized to issue up to 60 dispensing organization registrations for operation. Currently the IDFPR is accepting license renewal applications and requests to change dispensary location.
  • The application period for cultivation centers is currently closed.
  • There is a cultivation tax of 7% on the sales price per ounce.
Maine

Statute(s): Maine Revised Statutes Title 22 Section 2421, et seq.

Dispensaries Authorized: Yes

Agency Administering Licenses: Maine Department of Health and Human Services, Division of Public Health Systems

Licenses Available: Rarely available.

Relevant Regulations:

  • Up to eight non-profit dispensaries authorized, one for each public health district, are allowed under state law.
  • Beginning in February 2018, people may apply for license to run a retail marijuana establishment or retail marijuana social club.
  • 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(s): Maryland Code, Health-General Section 13-3301, et seq.

Dispensaries Authorized: Yes

Agency Administering Licenses: Maryland Medical Cannabis Commission (MMCC)

Licenses Available: See below.

Relevant Regulations:

  • MMCC has issued medical cannabis dispensary pre-approvals to 102 companies, with 22 approved and the others in stage 2 of the approval process.
  • Starting June 1, 2018, MMCC may issue more licenses to meet the demand for medical marijuana.
  • Dispensaries are required to submit a quarterly report to MMCC, which includes the number of patients served, the county of residence of each patient, the medical condition for which the marijuana was recommended, and the type and amount of marijuana dispensed.
Massachusetts

Statute(s): An Act for the Humanitarian Medical Use of Marijuana

Dispensaries Authorized: Yes

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

Licenses Available: Registered Marijuana Dispensary (RMD) Certificate of Registration

Relevant Regulations:

  • Applicants must pay the following fees: Application of Intent $1,500, Management and Operations Profile $30,000.
  • There are additional requirements for RMDs that operate as non-profit corporations.
Michigan

Statute(s): Michigan Compiled Laws Section 333.26421, et seq.

Dispensaries Authorized: Yes

Agency Administering Licenses: Michigan Department of Licensing and Regulatory Affairs (LARA)

Licenses Available: (1) growers; (2) processors, (3) transporters, (4) provisioning centers; (5) safety compliance facilities.

Relevant Regulations:

  • The Bureau of Medical Marihuana Regulation is responsible for overseeing medical marihuana and is composed of the Medical Marihuana Program and the Facility Licensing Division.
  • There is a two-step application process for medical marijuana facility licensing: (1) pre-qualification and (2) license qualification.
Minnesota

Statute(s): Minnesota Statutes Health Section 152.22, et seq.

Dispensaries Authorized: Yes

Agency Administering Licenses: Minnesota Department of Health (DOH)

Licenses Available: See below.

Relevant Regulations:

Montana

Statute(s): Montana Code Annotated Section 50-46-301, et seq.

Dispensaries Authorized: Yes

Agency Administering Licenses: Montana Department of Public Health and Human Services (DPHHS)

Licenses Available: See below.

Relevant Regulations:

  • The Montana Medical Marijuana Act allows licenses to be issued to providers, testing laboratories, and dispensaries.
  • Applications for licenses are available periodically.
  • A licensed provider or dispensary is allowed to cultivate, manufacture, possess, sell, and transport marijuana.
  • 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(s): Nevada Revised Statutes Title 40 Section 453A.010, et seq.

Dispensaries Authorized: Yes

Agency Administering Licenses: Nevada Department of Taxation

Licenses Available: See below.

Relevant Regulations:

  • The Department accepts marijuana license applications on a periodic basis.
  • Dispensaries are able to sell medical marijuana to people who present a state or local government-issued medical marijuana card from another state.
  • Until November 2018, only existing medical marijuana establishment certificate holders can apply for a retail marijuana establishment license.
New Hampshire

Statute(s): New Hampshire Revised Statutes Title X, Public Health Chapter 126-X

Dispensaries Authorized: Yes

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

Licenses Available: See below.

Relevant Regulations:

  • The Department has established 4 Alternative Treatment Centers (ATCs) - New Hampshire's term for dispensaries - and is not issuing additional medical marijuana business licenses.
  • 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(s): New Jersey Statutes 24 Section 6I-1, et seq.

Dispensaries Authorized: Yes

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

Licenses Available: See below.

Relevant Regulations:

  • The state licenses businesses referred to as "Alternative Treatment Centers" (ATCs) for the production and distribution of medical marijuana.
  • Six ATCs have been licensed, and the Department is not issuing additional licenses at this time.
New Mexico

Statute(s): Lynn and Erin Compassionate Use Act, 26-2B-1 et seq. NMSA 1978 [PDF]

Dispensaries Authorized: Yes

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

Licenses Available: See below.

Relevant Regulations:

  • In order to produce, distribute, and dispense medical marijuana, you must be a Licensed Non-Profit Producer (LNPP).
  • The LNPP application period is closed, and the Department is not currently accepting applications for producing and distributing medical marijuana.
New York

Statute(s): New York Consolidated Laws, Public Health Law Section 3306, et seq.

Dispensaries Authorized: Yes

Agency Administering Licenses: New York Department of Health

Licenses Available: See below.

Relevant Regulations:

  • Only Registered Organizations can manufacture and dispense medical marijuana.
  • The Department is not currently accepting applications to become a registered organizations.
  • 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(s): North Dakota Century Code Section 19-24-01, et seq.

Dispensaries Authorized: Yes

Agency Administering Licenses: North Dakota Department of Health: Division of Medical Marijuana

Licenses Available: See below.

Relevant Regulations:

  • Compassion centers are dispensaries or marijuana grower/manufacturer facilities.
  • The law allows for up two manufacturing facilities and up to 8 dispensaries, and the application period is currently closed.
  • 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.
Oregon

Statute(s): Oregon Revised Statutes Title 37 Section 475B.400, et seq.

Dispensaries Authorized: Yes

Agency Administering Licenses: Oregon Health Authority: Medical Marijuana Program

Licenses Available: (1) dispensaries; (2) processors.

Relevant Regulations:

  • A registered medical marijuana dispensary may sell limited recreational marijuana products (dried leaves and flowers, immature marijuana plants and seeds).
  • A grower needs a separate license; however, applications are not currently being accepted.
  • A dispensary and a grow site cannot be located at the same address.
  • Dispensaries cannot be within 1,000 feet of each other or a school.
Rhode Island

Statute(s): Rhode Island General Laws Section 21-28.6-1, et seq.

Dispensaries Authorized: Yes

Agency Administering Licenses: Rhode Island Department of Business Regulation

Licenses Available: See below.

Relevant Regulations:

  • The state has three dispensaries - called "compassion centers" - currently in operation.
  • Licenses for marijuana businesses are issued as the state determines need.
Vermont

Statute(s): Vermont Statutes Title 18 Section 4471, et seq.

Dispensaries Authorized: Yes

Agency Administering Licenses: Vermont Department of Public Safety: Vermont Marijuana Registry (VMR)

Licenses Available: See below.

Relevant Regulations:

  • Dispensaries must be licensed non-profit entities.
  • The Department has issued 4 dispensary registration certificates, and 1 conditional certificate.
  • The Department plans announcing an application period for a 6th dispensary once the number of registered patients reaches 7,000.
Washington

Statute(s): Washington Revised Code Section 69.51A.005, et seq.

Dispensaries Authorized: Retail providers may sell medical cannabis.

Agency Administering Licenses: Washington State Liquor and Cannabis Board

Licenses Available: See below.

Relevant Regulations:

  • 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.

State Medical Marijuana Laws: Related Resources

To find more information related to this topic, please click on the links below.

Questions About State Medical Marijuana Laws? An Attorney Can Help

The increasing number of jurisdictions legalizing the use of marijuana for medicinal 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.

Next Steps

Contact a qualified business attorney to help you navigate your business's legal and regulatory landscape.

Help Me Find a Do-It-Yourself Solution