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Although the DC Safe Cannabis Sales Act of 2021 proposed a framework for recreational cannabis sales, adult-use cannabis sales are not yet legal in DC. Therefore, to open a dispensary in the district, you must obtain a medical cannabis retailer license from the Alcoholic Beverage and Cannabis Administration (ABCA). Applications are open to individuals who meet the eligibility requirements as well as social equity applicants. The ABCA only accepts applications during its application schedule open periods.
With only seven licensed medical cannabis retailers and a growing demand for cannabis as evidenced by the ‘gift and donation’ cannabis marketplace, investing in the DC cannabis industry is an exciting prospect for many entrepreneurs. An online study reported that the medical cannabis market in the district topped $56 million in sales in 2022. Another report suggests that if adult-use cannabis sales are legalized in the district, retail sales would hit $50 million in the first year alone and top $200 million by the fourth year.
Although the DC Alcoholic Beverage and Cannabis Administration issues two types of cannabis retail licenses, only one is issued to storefront dispensaries. To open a physical retail storefront in DC, you must obtain a medical cannabis retailer license. This license permits the licensee to dispense medical cannabis and medical cannabis products to registered medical cannabis patients and caregivers.
To operate a non-storefront retail store, you must obtain a medical cannabis internet retailer license. This license permits the licensee to operate a non-physical location to sell medical cannabis and medical cannabis products to eligible medical cannabis patients and caregivers.
To qualify to apply for a medical cannabis retailer license in DC, you must fulfill specific eligibility requirements. You must:
After verifying that you are eligible to apply, you may complete the application via the following methods:
2000 14th Street NW Suite 102A South Washington DC 20009
ABCA’s office hours are between 8:30 a.m. and 4:00 p.m., Monday-Friday. Applicants arriving in person before 9:00 a.m. on the opening day of the application window will be directed to a queue
Before submitting your application, it is recommended that you review the license application checklist to ensure that all required supporting documentation will be included in your submission.
Applicants submitting their applications by mail or in person may pay their application fee by check, money order, or cashier's check made payable to "DC Treasurer". If you are submitting the application in person, you may also present a credit card to an ABCA contact representative upon submission. Applicants may pay their application fee online, by mail, or in person. To request an online payment link, email ABCA.CannabisLicensing@dc.gov.
Note that applicants must pay the application fees within 1 business day following formal notification of application acceptance by ABCA. Also, the annual licensing fee for the first year must be paid within 60 calendar days of ABCA Board approval but prior to license issuance.
Applications for medical cannabis retailer licenses are only accepted during open application periods. In addition, submitted applications will be subjected to a 45-day public comment period and ABCA Board approval.
When completing an application for a medical cannabis retailer license in DC, the applicant must provide the following documentation and information:
Per ABCA rules, a medical cannabis retailer license application must include a security plan. The plan must address, at a minimum, the following elements:
Besides a security plan, a dispensary business should have a business plan. A business plan serves as a strategic tool to establish clear objectives and operational protocols for your dispensary business. Beyond that, it can be instrumental in obtaining financial support for the business or facilitating potential business sales in the future. A good business plan should include an executive summary, industry overview, market analysis and competition, sales and marketing plan, ownership and management plan, operating plan, and financial plan.
In accordance with ABCA guidelines, an applicant must comply with the District of Columbia regulations regarding the zoning areas where a dispensary may be located. No medical cannabis retailer may set up a store within residential districts.
Before licensure, the applicant must provide a valid zoning determination letter from the DOB (Department of Buildings) Zoning Administrator indicating that the dispensary may operate where the cannabis business is sought to be located. Prior to the issuance of the cannabis retailer license, a certificate of occupancy issued by DOB for the building where the business will be located must be provided.
It takes 3-4 months for the ABCA to issue medical cannabis retailer licenses. However, depending on ABCA's workload and whether an applicant needs to resubmit missing information or provide other supporting documentation, it may take longer to be issued a medical cannabis retailer license.
According to DC regulations, a dispensary may not be located within 300 feet of a school or recreation center. In compliance with this rule, an individual applying for a medical cannabis retailer license must submit a certified surveyor's report or a detailed GIS map showing the proximity requirements to schools and recreation centers.
Yes. A medical cannabis retailer licensee may operate in multiple DC locations. However, per DC rules, the combined number of retailer and internet retailer licenses held by a licensee cannot exceed three.
To fully set up a medical cannabis retail store in DC, you must pay the application and licensing fees, as well as cover other startup expenses. These expenses include fees for real estate or rent, software and hardware, security, staffing, inventory, and marketing costs. The fee for a standard retailer application is $8,000, while the fee for a social equity retailer applicant is $2,0000. The annual licensing fee for a standard retailer license is $16,000, while social equity applicants pay $4,000 for the first 3 years. Overall, the costs for setting up a dispensary may reach $250,000 or more, depending on the scope of dispensary operations.
Although no cannabis-specific insurance requirements exist for dispensaries, DC rules require businesses with one or more employees to carry workers' compensation insurance. Workers’ compensation covers workplace injuries and other related liabilities for dispensary owners.
Dispensaries may also consider carrying general liability insurance and product liability insurance coverages. General liability insurance protects businesses from financial losses caused by lawsuits arising from bodily injury or property damage to third parties. Product liability insurance protects businesses from financial losses caused by lawsuits arising from products sold by the cannabis retailer.
Although cannabis is legal in DC, banks still refrain from doing business with cannabis establishments due to the illegal status of cannabis on the federal level. However, you can access grants or loans to set up your medical cannabis retail store in DC via any of the following means:
Yes. The DC ABCA has a social equity program for medical cannabis retailer license applicants. According to the Medical Cannabis Amendment Act of 2022, at least 50% of all new medical cannabis retailer licenses must be set aside for social equity applicants.
To be considered a social equity applicant, one must meet two of the following 3 criteria. The applicant must have at least one owner who is a resident of the District of Columbia, individual or collectively owns a minimum of 50% of the business, and:
A DC resident does not refer to an individual who has lived in DC for a specific period. Under D.C. Code §4-205.03, DC residents are individuals living in the district voluntarily and not for a temporary purpose; that is, persons with no intention of presently removing themselves from DC
Some of the benefits of having an SEP applicant status include:
For more information on applying for a medical cannabis retailer license under a SEP status, see the social equity program page of the ABCA website.
DC requires licensed medical cannabis retailers to charge a 6% tax on medical cannabis sales in the district. The tax is remitted to the DC Office of Tax and Revenue.