How to Open a Cannabis Dispensary in California

The year 2016 marked a significant turning point for California, as it embraced the legalization of cannabis.

This landmark decision not only changed the social landscape but also paved the way for a surge in cannabis dispensaries throughout the state.

The sales value of legally sold recreational marijuana in California is projected to hit $6.59 billion USD by 2025 , a significant increase from $2.69 billion USD in 2016.

If you’re an enthusiastic future business owner with aspirations of establishing your very own cannabis dispensary, you’re in luck! We’ve put together an in-depth roadmap to assist you in getting your venture off the ground.

Planning a Cannabis Store – Follow This Step-by-step Guide

Start with thorough research

The first step is to learn more about the industry and familiarize yourself with the market and customer preferences.

You’ve got to be on a first-name basis with all the laws, rules, and regulations that California has laid out for this kind of business.

Some of California Based Cannabis Store Names are:

  • Off the Charts Dispensary
  • Love Shack by Green Dragon
  • Authentic Cannabis
  • STIIIZY Mission
  • Ohana Cannabis
planning a cannabis store how to start

It’s like making sure you know all the house rules before you step into a new place – you definitely don’t want any surprises.

The industry being sensitive and having loads of rules and regulations set around it, you ought to be thorough in your research.

By the time you go to the next step, make sure to have a thorough knowledge of the industry.

This phase most importantly should consider competitive analysis. Look around at how your potential competitors are functioning and how they started out.

Take lead from them so you can avoid the mistakes they made.

Estimate the funding needed

The next thing on your to-do list is to figure out how much money you’re going to need. It’s a good move to get a solid grasp of this, so you’re not caught off guard by the financial side of things.

First off, you’ll want to get a clear picture of what the real estate costs will be, along with any expenses related to setting up the physical space.

Don’t forget about the fees for licenses and applications, the ongoing operational costs, what you’ll need to pay your staff, and the expenses tied to hardware and software. And oh, don’t overlook the taxes that will be part of the package.

Given that you’re just starting out, it’s smart to be ready for any surprise expenses that might pop up. It’s a good idea to have a little extra tucked away in your budget for unexpected emergencies.

Remember, having a solid estimate of the funding you need and being prepared for potential financial twists and turns will put you in a stronger position as you set out on this venture.

Apply for the Cannabis License

Before applying for the licenses, make sure you are fully prepared with the list of documents that you will require.

Make sure you have local permits, ownership and background information, government issues IDs, financial documents, personal tax identification number, social security number and all the other important documents needed to apply for the license.

Since there are heavy regulations on the Cannabis industry, the laws keep on changing.

Just make sure that you are familiar with the latest updates, so the licensing process is not delayed.

Normally, below steps are to be followed to get the license:

  • Register your business with California Secretary of State
  • Complete your application with all the needed documentation
  • Register for the licensing system
  • Submit your application online and pay the fee
  • Regularly track licensing communication
  • Display license upon approval

There are many firms in California that can help you procure your license and get through the entire process from start to finish. All you need to do is pay a fee to them and they take care of everything.

Suggested 5 firms for Cannabis Consulting in California

1. WeCann – Expert Cannabis Licensing & Business Consultants in California

WeCann provides a comprehensive range of consulting services for cannabis businesses that consists of everything right from obtaining licenses, locating legitimate cannabis real estate and properties, and ensuring strict adherence to all marijuana regulations.

2. Canna Advisors – Cannabis Business Consulting Professionals

Canna Advisors help support cannabis entrepreneurs in securing business licenses, fine-tuning facility layouts, streamlining operations, and ramping up business growth.

3. Point Seven Group – Cannabis Consulting

Point7 Group is a women owned firm that helps cannabis businesses right from cannabis operators and joint ventures in licensing services, dispensary design and operations, branding and marketing services.

4. Be Green Legal – Cannabis Consulting and Licensing Experts

With over a decade of experience, the Be Green Legal crew’s expertise extends beyond industry, covering areas like land planning, permitting, and staying on the right side of licensing rules. In an industry packed with regulations on where and how businesses can run, their skillset shines brightly.

5. 3C Cannabis Consulting – Cannabis Consulting Company

3C Cannabis Consulting works with you in crafting solid business plans, finding real estate that’s above board, crunching the numbers with financial models, setting up and following standard operating procedures that meet local, national, and even international standards. They are pros at facility design, forming partnerships across the globe, and navigating the process of snagging those essential cannabis business licenses.

Acquire the funding

In California, getting your hands on a dispensary license means shelling out $1,000 upfront for the application. Once you get the nod, the actual licensing fee falls somewhere in the range of $4,000 to a hefty $120,000. Yeah, that’s quite a spread and depends on how big your operation is on paper.

Now, don’t forget the real estate factor. Setting up shop in California comes with a price tag of around $50,000 to $100,000 a year. And let’s not ignore the other initial costs that’ll be knocking on your door.

The Golden State isn’t exactly budget-friendly in terms of living expenses, so when you’re hiring your crew, you’ll need to dig a little deeper into your pockets. Plan to pay your budtenders roughly between $30,000 and $40,000 per year, which is a tad higher than the national average.

Wrangling all these numbers together, the upfront investment for launching a dispensary here ranges from $80,000 to a quarter million dollars. Once you’re up and running, you’re looking at ongoing monthly expenses between $30,000 and $70,000.

Source: How Much Does it Cost to Open a Cannabis Dispensary?

It’s a big financial move, but with these digits in mind, you can navigate the dispensary game in the sunny state of California.

Suggested 5 firms for Cannabis Business loans in California

1. FundCanna – California Cannabis Loans

fundcanna california cannabis funding

When it comes to cannabis, FundCanna takes the lead as the go-to lender. Whether you’re looking for vendor financing, a bridge loan, equipment funds, or simply a quick cash advance, they have everything covered. Their range of cannabis funding options is adaptable and tailor-made to cater to the distinct requirements of this incredible industry.

2. Canna Business Resources – Direct Lender in Cannabis

canna business resources direct cannabis lender California

Cannabis Business Resources is a service company created to offer vital resources like financing, processing solutions, and banking choices to businesses in the rapidly expanding Cannabis and CBD Industry of our present generation.

3. Mortage Vintage Inc. – Cannabis Business Purpose Loan Program

cannabis fund california loan

Mortgage Vintage Inc. offers access to Cannabis loans that are available to finance a purchase or refinance on any of the licensed activities including dispensaries, farming, growing, distribution, manufacturing and processing facilities.

4. AVANA Capital – cannabis financing California

avana capital california cannabis loan

AVANA Capital provides cannabis financing and dispensary loans that give entrepreneurs the tools to tackle the hurdles of the cannabis industry with trustworthy, adaptable, and cost-effective solutions.

5. Diamond Business Loans – Marijuana Business Funding

diamond business loan for opening cannabis dispensary

Diamond Business Loans provides funding to qualified new and established businesses through our range of loan products. Their aim is to assist business owners and their enterprises, enabling them to keep catering to their customers and supporting their teams.

Find the dispensary location

The importance of location can’t be stressed enough.

You are in for a challenge when it comes to locating budget-friendly real estate for your California cannabis venture.

Navigating through zoning laws can often feel daunting, making it quite the task to grab an affordable property for your cannabis operations. This could easily become one of your major expenses on the journey.

Access to a skilled workforce can be another critical factor that could affect the decision of your ideal location for cannabis store.

If you are eying a rural area for your dispensary, it could get a bit difficult. Though, the metropolitan locations offer decent enough options to get skilled staff of your choice.

Before you plant your flag, ensure your chosen location complies with the rules and regulations that mark an ideal dispensary hotspot.

Make sure to go through your tenant agreement thoroughly and try to get an expert to look at it before signing it.

And here’s a nugget of wisdom: If your license application is stuck in the approval pipeline, we advise you to negotiate for a contingency clause. This could be your saving grace if the city gives your operation the thumbs-down.

Choose the right Cannabis Distributor for quality products

Selecting the right distributor for your menu items is a crucial decision in establishing a successful operation. When you’re sourcing all the products on your menu, you want to ensure reliability above all else.

Transportation costs can quickly eat into your budget when dealing with distribution channels. Here’s where a local distributor shines. They’re the answer to your logistical concerns.

Why, might you ask? Well, for starters, they’re right in your neighborhood or city, so there’s no need to worry about long-distance shipping fees.

Local distributors often have established relationships with nearby suppliers, which can result in quicker deliveries and better prices.

Moreover, working with a local distributor can foster a sense of community and support local businesses, which can be a selling point for your establishment.

In essence, choosing a reliable local distributor is a smart move that not only helps streamline your supply chain but can also positively impact your bottom line and your community ties.

Suggested 5 Cannabis Distributors in California

1. Nabis — One-Stop Shop for Cannabis Wholesale

nabis california cannabis distributor

Nabis stands as California’s premier licensed cannabis wholesaling platform, holding the top spot in the state.

With an extensive roster of over 300 exclusive brands, it serves the entire network of state-licensed dispensaries, ensuring they have access to top-tier products.

Their wide range of offerings empower a wide range of brands and retailers to innovate, launch, and expand their presence in the market.

2. Talarya Brands

talarya brands cannabis distributor in california

Talarya Brands , formerly known as Cosmic Brands, is a prominent cannabis company operating in California. It provides comprehensive services, including product manufacturing, distribution, and analytics, to support the state’s premier sustainable, equity, and legacy brands.

Talarya Brands has collaborated with esteemed cannabis companies such as Arcanna, Marley Natural, Woodstock Heritage Strains, Mendocino Grasslands, Wonder Extracts, and many others.

3. Humboldt Distribution Company – California

humboldt cannabis distribution company

Humboldt Distribution , right in the heart of the Emerald Triangle, is a company on the rise. They’re currently the exclusive distributor for two exciting brands.

Their services cover everything from transportation to testing, procurement, and comprehensive supply chain management.

But what sets them apart is their deep Humboldt roots and their unwavering commitment to putting farmers first.

4. Emerald Supply | California’s Bulk Cannabis Distributor

emerald supply group cannabis distributor

Emerald Supply Group is your go-to when it comes to distributing bulk Cannabis. They’re the force behind some of the top brands and manufacturers in California.

With a stellar track record of buying and selling flowers, trim, and smalls from over 1,000 farms, they’ve got your supply chain needs covered from A to Z.

Whether you’re a producer or a brand looking for distribution muscle, Emerald Supply Group has the expertise and network to power your success in the Golden State.

5. Bear Humboldt – Bringing You the Best Cannabis Experience

bear cannabis distributor california

Beer Extraction House was the first to introduce a full spectrum live resin cart, the pioneers of live resin in a fully ceramic cart, and the innovators behind a low-temperature battery designed to preserve the authentic terpenes in live resin.

Since it’s inception, Beer Extraction House has been committed to delivering excellence in every aspect of the cannabis experience.

Hire Cannabis Store Staff

The staff that you hire at your Cannabis store is going to determine the end customer is going to perceive your dispensary.

The kind and quality of customer service will be crucial and how your employees deliver it is to be taken into consideration.

Take care of the below while hiring your staff and you are good to go:

  • They should have enough compliance knowledge on state cannabis regulations, so they follow them to the tea.
  • Enough product knowledge is also very important, so the customer questions are tended to seamlessly.
  • Exceptional customer service skills are the most important.
  • Decent communication skills are another skill that you need to factor in while hiring your staff.
  • Due to the industry’s nature, give preference to candidates familiar with security protocols.
  • Search for candidates capable of managing unforeseen circumstances with professionalism.
  • Make sure to have enough background checks and reference checks before hiring anyone.

Here are some of the top service providers in California who can assist you in hiring the best staff for your newly opened dispensary:

Suggested 3 Cannabis Staff Hiring Consultancy / Website

1. Marijuana Jobs Cannabis Careers – California Cannabis Jobs, California Employment

marijuana jobs cannabis careers

Starting from 2016, Marijuana Jobs Cannabis Careers has been the top-notch job board site dedicated to assisting you in discovering opportunities in marijuana-related jobs, cannabis roles, weed positions, hemp careers, or anything related to the 420 industry.

2. CannabizTeam – Cannabis Staffing & Executive Search

cannabiz team staff hire california

Presently, Cannabiz Team stand as the biggest staffing agency solely concentrated on the cannabis sector. Our active clientele spans across 30 states, and we possess the capability to tap into a pool of over 200,000 vetted candidates, ensuring an impeccable fit for all types of full-time or on-demand roles.

3. Vangst – Cannabis Jobs & Professional Network

vangst cannabis staff hiring california

Cannabis companies often struggle to locate the necessary and right talent, while potential candidates are uncertain about where to begin their search.

Vangst helps its clients in securing permanent hires and temporary GIG positions and also enhances the visibility of our job listings on any platform.

Understand Compliance

Once you have opened up the dispensary, there are other sets of protocols or compliance standards that you and your customers need to follow.

In California, they’ve got this system called Metrc to keep tabs on everything.

So, there’s this Department of Cannabis Control that’s in charge of keeping an eye on the whole legal weed scene in California.

If you’re a grown-up in California, you’re allowed to buy up to 28.5 grams of regular cannabis, 8 grams of the concentrated stuff, and 6 baby cannabis plants every single day.

And if you’re using medical marijuana, you’re good to grab up to 8 ounces of the medical stuff each day.

So, remember, it’s crucial to be on top of these rules, even if your customers aren’t thinking about them.

Stay in the know!

Choose right technology for Cannabis Dispensary

The type of technology and vendors you collaborate with will play a big role in how efficient and successful your dispensary is overall.

It’s really important to make sure you’re starting off with the right kind of investment, or it could seriously affect how well your place grows and operates.

You’ll want to get a great-looking website that’s informative and encourages action.

The very first piece of tech you should investigate is the POS system. It’s crucial that it’s cloud-based and tailored to your industry. This way, you can better determine if it’s worth your time and money.

In addition, having a well-designed cannabis digital menu board solution and reliable accounting software would also be key.

A digital menu board would help you save a lot on redundant paper menu costs and accounting software will not only streamline your finances from the start but will also help you gain valuable insights on financial planning every quarter.

Dot Signage – Cannabis Dispensary Digital Menu Boards

cannabis store digital menu templates

DotSignage is one of the most sought out digital menu board solution in the Cannabis industry. With beautifully created weed menu templates , you can easily engage your customers with order driving tv screen menu. DotSignage helps you gain control over your costs and time when it comes to managing your menus.

Dot Signage – Cannabis Tablet ordering Menu for Customer

marijuana dispensary tablet ordering

Give your customers enough time and space to browse through your menu via cannabis tablet ordering menu and help them make an informed decision. With the image for each menu item the system makes it easier for everyone to make purchases and enhances the customer experience.

Note down your marketing plan

Before you get started on this segment, please take note that there are a set of rules that are to be followed when it comes to the marketing that needs to be done for your newly opened cannabis store.

Here are the set of guidelines defined to be followed:

Advertisements and marketing efforts need to focus on individuals who are 21 years old or older.

Customers can buy cannabis from the retailer, and have it delivered to them while they’re sitting in a vehicle parked just outside the licensed store.

Advertisements are not allowed to provide false or deceptive information.

When it comes to cannabis advertising, it’s not allowed within 1,000 ft of places like daycares, schools covering kindergarten to grade 12, playgrounds, or youth centers.

Businesses can’t hand out cannabis products or accessories as freebies or promotional items. However, they are permitted to donate legal cannabis to a patient.

Starting from January 2021, it’s against the law to have billboards or similar signs along an Interstate Highway or a State Highway that crosses into California.

Refine based on Customer Needs

After you’ve got your marketing strategies in place, the next move is to dig into your earnings for the quarter and see if you’re turning a profit.

The initial few months in any business can be a bit of a rollercoaster. Yet, if you’ve done your homework right from the get-go, you stand a good chance of raking in some solid earnings.

Keep in mind that what’s successful for someone else might not necessarily be the ticket for you. It’s a good idea to pinpoint what aspect of your business resonates most with your target customers and really concentrate on that.

Make sure you’re really familiar with all the products listed on your menu and can tackle any questions that come your way about them. People should see you as an expert and a trusted guide when they’re looking for advice.

In the cannabis industry, this is especially important because you’ll likely encounter plenty of newcomers who could really use some solid guidance before they decide what to buy.


Embarking on the journey to open a dispensary in California can be both exciting and rewarding. California’s evolving cannabis landscape offers a unique opportunity for entrepreneurs to tap into a thriving market.

By navigating through the legal requirements, understanding the nuances of the industry, and implementing a well-thought-out business plan, you’re setting yourself up for success.

Remember, the key lies in meticulous research, compliance with regulations, and a customer-centric approach.

Whether you’re a seasoned business owner or a budding entrepreneur, the steps outlined in this guide can serve as your compass in this dynamic field.

The cannabis industry is ever-changing, and being prepared to pivot will be a crucial aspect of your ongoing success.

By providing top-quality products, fostering a welcoming environment, and staying attuned to your customers’ needs, you’ll not only open the doors to your dispensary but also to a world of possibilities.

Good luck with your journey!

Smit Nebhwani

Smit Nebhwani is a tech entrepreneur with expertise in successfully building SAAS based products. Boasting over a decade of experience in the startup sector, he takes pleasure in sharing valuable insights on all facets of SAAS products. His extensive experience in the digital signage sector has established him as a reputable authority in the industry, and he channels this expertise through some valuable content. In his free time, Smit enjoys music, travelling and spending time with his family.

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