How to Open a Dispensary in Washington DC

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How to Open a Dispensary in Washington DC in 2024

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.

Why Open a Dispensary in Washington DC?

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.

Types of Dispensary Licenses in Washington DC

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.

How to Get a Washington DC Dispensary License

To qualify to apply for a medical cannabis retailer license in DC, you must fulfill specific eligibility requirements. You must:

  • Be of good character and fit for the responsibilities of licensure
  • Be at least 21 years of age
  • Not have been convicted of a felony for a crime of violence, gun offense, fraud, tax evasion, or credit card fraud within the 3 years immediately preceding the application submission date
  • Have paid the annual fee and be either a for-profit or non-profit corporation incorporated in DC
  • Not be a licensed, authorized practitioner making patient recommendations
  • Not be an individual whose authority as a qualifying patient or caregiver has been revoked by the ABCA Board
  • Have complied with all the requirements of the Legalization of Marijuana for Medical Treatment Initiative of 1999 and Title 22-C of the District of Columbia Municipal Regulations
  • Not hold an interest in a DC cannabis testing laboratory or courier license
  • Be current on all tax filings and not owe the DC more than $100

After verifying that you are eligible to apply, you may complete the application via the following methods:

  • Online: If an applicant chooses this method, the applicant must create a free Quickbase account on the ABCA portal using an email address. After logging in, the applicant may view the application but cannot upload the required documents until 9:00 a.m. on the first day of the open application period. Applicants may save their progress on the portal and return to their application throughout the application period. After application submission, the ABCA will send a confirmation of receipt to the applicant’s email address used to create the user account
  • In-Person or By Mail: The applicant may submit the completed application and supporting documents to ABCA’s office at:

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

  • By Email: To submit your application by email, combine the application and all supporting documentation into one PDF file and email it to ABCA.CannabisLicensing@dc.gov. File attachments that are approximately 10 megabytes or larger may not be successfully received based on the email client used to send the electronic mail. Application documents are not to be sent in multiple emails

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.

Information and Documents Required for a Dispensary License in Washington DC

When completing an application for a medical cannabis retailer license in DC, the applicant must provide the following documentation and information:

What Plans Do You Need to Open a Dispensary in Washington DC?

Per ABCA rules, a medical cannabis retailer license application must include a security plan. The plan must address, at a minimum, the following elements:

  • Proof that the space will comply with all security system requirements outlined in Title 22-C of the regulations
  • A site plan showing the entire structure the dispensary business is housed in, including the streets, parking lots, other tenants within the facility, and any other entities that physically border the dispensary’s proposed location
  • A floor plan of the dispensary business detailing the location of the following:
  • All entrances and exits to the premises
  • The location of any skylights, windows, and roof hatches
  • The location of all cameras and their field of view
  • The location of all alarm inputs (motion detectors, door contacts, duress, or hold-up devices) and alarm sirens
  • The location of the digital video recorder (DVR) and alarm control panel
  • Restricted and public areas
  • The type of security training available to and completed by dispensary personnel, including:
  • Procedures for handling violent incidents, other emergencies, and calling MPD
  • The number and location of cameras used by the establishment
  • Security measures taken by the applicant to prevent individuals from entering the limited access area portion of the licensed premises
  • The applicant's closing procedures after the closure of business each day
  • The applicant’s plan to prevent theft or the diversion of medical cannabis, including maintaining all medical cannabis in a secure, locked room that is accessible only to authorized persons
  • The type of security or alarm system and outdoor lighting to be used by the applicant

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.

Are There Municipal Requirements for Opening a Cannabis Dispensary in Washington DC?

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.

How Long Does It Take to Get a Washington DC Dispensary License?

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.

Where Can You Locate a Cannabis Dispensary in Washington DC?

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.

Can Licensees Have More Than One Dispensary Location in Washington DC?

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.

How Much Does It Cost to Open a Marijuana Dispensary in Washington DC?

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.

Do You Need an Insurance Policy for a Cannabis Dispensary in Washington DC?

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.

How to Get a Grant to Open a Dispensary in Washington DC

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:

  • Crowdfunding: This is a way of gathering small donations from a substantial number of people, typically online, to fund a cannabis dispensary business
  • Equity Funding: Equity funding helps entrepreneurs raise funds for business startups by selling business shares. Therefore, a dispensary can sell chunks of ownership in the company in return for cash
  • Cannabis-specific Lenders: These types of financiers are familiar with the dynamics of the cannabis industry and can offer loans to cannabis businesses at lower interest rates
  • Personal Savings: You may use your savings or investments to raise capital for your dispensary startup if you have sufficient funds
  • Social Equity Program: If you are eligible to apply for a medical cannabis retailer license as a social equity applicant in DC, you can access grants and loans via the medical cannabis social equity fund and enjoy reduced application and licensing fees

Does Washington DC Have a Social Equity Program for Cannabis Dispensaries?

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:

  • Is a returning citizen. A returning citizen is a district resident arrested, convicted, or incarcerated for a cannabis or drug-related offense. The arrest, conviction, or incarceration may have taken place in either DC or another jurisdiction in any year, provided that the arrest, conviction, or incarceration occurred before the filing of the license application with ABCA
  • Is married to or in a civil union, has a child, or is the child of a person or has a non-parent legal guardian, or a grandparent or a sibling who is or has been arrested, convicted, or incarcerated in DC or any other jurisdiction for a cannabis or drug-related offense. According to the Medical Cannabis Clarification and Non-Resident Patient Access Emergency Amendment Act of 2023, this criteria now includes grandparents and siblings and considers arrests and convictions of qualifying family members.
  • Has an income not exceeding 150% of the median family income, as outlined by the US Department of Housing and Urban Development (HUD), adapted for household size, at the time of application submission. Note that the income limit that at least one owner owning 50% or more of the business must be under is based on the owner’s household size at the time the application is submitted to ABCA

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:

  • Access to equity grants and loans from the medical cannabis social equity fund
  • 75% fee reduction on application and licensing fees for the first 3 years

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.

Does Washington DC Tax Marijuana Dispensaries?

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.

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How to Open a Dispensary in Washington DC