Marijuana Business: Licenses, Permits, and Planning

An ever-increasing number of states have passed legislation legalizing marijuana for medical uses and some states have even legalized the herb's recreational use. State laws determine who may cultivate or sell marijuana and under what conditions they may do so. At the outset, it should be noted that the cultivation and sale of marijuana are still considered federal crimes, and whatever efforts are made to comply with state and local laws will not prevent you from being prosecuted under federal law. Regardless, those starting a marijuana business can avoid most serious problems by closely following state and local rules.

The type of licensing and documentation your marijuana business requires will depend on both the location of your operation and the sort of business you are conducting. For example, someone growing and marketing marijuana to retail businesses may require different licensing and permits than someone operating a dispensary. See FindLaw's Marijuana and Other Highly Regulated Businesses section to learn more.

The following state's licensing programs show the range of different approaches to the regulation of marijuana businesses:

Alaska

Alaska's laws permit the use of both medical and recreational marijuana. You may apply for a Marijuana Establishment License online, with supplemental application documents for marijuana cultivation facilities, product manufacturing facilities, testing facilities, retail stores, marijuana handler permits, and more.
Arizona The Arizona Department of Health Services runs the medical marijuana program, and accepts dispensary registration certificate applications periodically. A cultivation facility can't be set up without being licensed as a dispensary.
Arkansas The Arkansas Medical Marijuana Commission is in charge of the state's medical marijuana program. The Commission has applications available for dispensary and cultivation facility licenses.
California The sale of medical and recreational marijuana is legal in California as long as a seller has a state and local license. There are 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.
Colorado Licenses for both medical and recreational marijuana are available. There are two types of applications: medical marijuana business license and retail marijuana business license. Both types of application also require the applicant to confirm that the local authority allows such businesses to operate within its jurisdiction.
Connecticut The Connecticut Department of Consumer Protection is responsible for the state's Medical Marijuana Program. The state accepts applications and issues licenses for producers and dispensary facilities on a periodic basis. Generally, only 3-10 licenses (of each) are awarded at a time.
Delaware The Medical Marijuana Program in Delaware is part of the Public Health Division. Even though medical marijuana is legal, Delaware has a limited number of medical marijuana distribution centers, known as compassion centers. Currently, there is one compassion center, and another opening soon.
Florida The Office of Medical Marijuana Use (a division of the Florida Department of Health) is responsible for writing and implementing the departments rules and licensing businesses to dispense, process, and cultivate medical marijuana. The Office is not currently accepting applications for Medical Marijuana Treatment Centers.
Hawaii The Hawaii Department of Health is responsible for administering its Medical Cannabis Program. At this time, the Department has only issued 8 dispensary licenses statewide. It's unclear if more licenses will be issued in the future.
Illinois Illinois' Department of Financial and Professional Regulation is responsible for issuing licenses for dispensaries. The Illinois Department of Agriculture is responsible for registering and regulating up to 22 cultivations centers; however, the application period is currently closed.
Louisiana Legislation signed into law in 2017 establishes a legal framework for patients with a valid doctor's recommendation to obtain medical cannabis. Only a limited number of specially-licensed pharmacies will be approved for the distribution of marijuana.
Maine The Division of Public Health Systems is responsible for the Medical Use of Marijuana Program. Licenses for dispensaries are provided, but rarely available. The state currently has 8 dispensaries. Beginning in February 2018, people may apply for license to run a retail marijuana establishment or retail marijuana social club.
Maryland The Maryland Medical Cannabis Commission is responsible for developing policies, procedures, and regulations for medical marijuana use. It has issued medical cannabis dispensary pre-approvals to 102 companies, with 22 approved and the others in stage 2 of the approval process.
Massachusetts

The state's Department of Health is responsible for the Medical Use of Marijuana Program. In order to operate a Registered Marijuana Dispensary (RMD), an applicant must apply for an RMD Certificate of Registration. The application process requires that an applicant first file an application of intent.

In order to obtain a license in compliance with the state's Adult Use of Marijuana law passed in 2016, you must apply through the Cannabis Control Commission.

Michigan 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. The Department of Licensing and Regulatory Affairs is currently accepting applications for growers, processors, transporters, provisioning centers, and safety compliance facilities.
Minnesota Licenses for marijuana businesses are not available. The Department of Health selected two companies as registered manufacturers and distributors of marijuana. The state has 8 dispensaries, which are called "cannabis patient centers."
Montana The Montana Department of Public Health and Human Services is responsible for the state's Medical Marijuana Program. Applications for provider, testing laboratory, and dispensary licenses are available periodically.
Nevada The Nevada Department of Taxation is responsible for licensing and regulating retail marijuana businesses, and the state's medical marijuana program. Until November 2018, only existing medical marijuana establishment certificate holders can apply for a retail marijuana establishment license.
New Hampshire The New Hampshire Department of Health and Human Services is responsible for administering the Therapeutic Cannabis Program. The Department has established 4 Alternative Treatment Centers (ATCs) - New Hampshire's term for dispensaries - and is not issuing additional medical marijuana business licenses.
New Jersey The New Jersey Department of Health is responsible for the state's Medicinal Marijuana Program. 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 The New Mexico Department of Health is responsible for overseeing the Medical Cannabis Program. 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 New York's Department of Health is responsible for its Medical Marijuana Program. Only Registered Organizations can manufacture and dispense medical marijuana. The Department is not currently accepting applications to become a registered organization.
North Dakota The Division of Medical Marijuana (part of the North Dakota Department of Health) is responsible for the state's Medical Marijuana Program. Compassion centers are dispensaries or marijuana grower/manufacturer facilities. The application period for compassion centers is currently closed.
Ohio Ohio, which legalized the medical use of marijuana through legislation in 2016, is expected to fully implement its program sometime in 2018. While the state has already licensed a limited number of growers, dispensaries, and other businesses, it may issue more licenses as needed to meet demand.
Oregon Licenses are required and available for both medical and recreational marijuana businesses. The state requires separate licenses and registration for growers and dispensary operators. The Oregon Liquor Control Commission License (OLCC) accepts applications for recreational marijuana licenses.
Rhode Island The Rhode Island Department of Business Regulation is responsible overseeing and licensing dispensaries (known as "compassion centers") and cultivators. Applications can only be submitted during an open application period announced by the state as necessary. The state has 3 licensed compassion centers currently in operation.
Vermont The Department of Public Safety is responsible for the Marijuana Registry and issues dispensary registration certificates. 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 A marijuana license is required in order to produce, process, or retail marijuana. The Washington State Liquor and Cannabis Board is responsible for marijuana licensing; however, it's not currently accepting applications for licenses.
Washington D.C. While it's legal to use marijuana recreationally, there are no retail establishments selling marijuana for recreational use. The D.C. Department of Health has a Medical Marijuana Program, but it's not currently accepting applications for medical marijuana facilities.

Many states and localities have restricted the number of dispensaries and cultivators or limit their size. Common barriers to starting a marijuana business include the high application fees, strict regulations, and stringent financial reporting and management requirements.

Starting a Marijuana Business? Get Legal Help Today

It's critical to check on current licensing requirements with both your state and local governments before getting your marijuana business off the ground. Because this industry is heavily regulated and can still run afoul of federal laws, you should also consider meeting with an experienced business law attorney who can advise you of the laws in your jurisdiction while guiding your business through the red tape.

Next Steps

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