How to Open a Dispensary in New York

As legalization efforts in the 4th most populous US state begin to yield more fruit, entrepreneurs are showing more interest in how to open a dispensary in New York. The state of New York legalized adult-use cannabis in March 2021, but regulators are yet to award any licenses to prospective retailers, with industry experts predicting retail sales will begin by the year's end.

Medical cannabis has been legal in New York since July 2014, although it has only recently begun to see less restrictive market regulations. As of March 2022, there are only 10 licensed medical cannabis companies in New York, two of which are set to merge by the end of the year.

With legal cannabis sales projected to hit $4.2 billion by 2027, a bulk of these coming from adult use retail, New York is set to become the second-largest legal cannabis state in the U.S. 


In this article, we shall explore the options for entrepreneurs looking to go into the cannabis retail business in New York and also help prospective adult-use retailers prepare for the opening of the recreational market.

Can I open a dispensary in New York right now?

Cannabis businesses in New York undergo a rigorous process before they can acquire medical cannabis business licenses. If you acquire a cannabis business license, you are allowed to open up to four dispensaries. 


The state of New York is yet to award any licenses to adult-use dispensaries, although several proprietors have opened adult-use dispensaries across the state, exploiting the so-called 'gray market' in which legal loopholes have been made possible by the removal of prohibition on cannabis.

How do I open a cannabis dispensary in New York?

The Office of Cannabis Management (OCM) oversees the process of issuing licenses for businesses looking to operate medical and adult use dispensaries. Before applying for a license, there are a few prerequisites you must fulfill, and they include the following:

Create a business plan.

While a business plan is not an absolute requirement for opening a dispensary in New York, it goes a long way in easing the process and helping you get funding from investors.

A good business plan to open a dispensary in New York should include:

  • Executive summary: This section provides an introduction to your business plan, with a summary of each key part of your plan.
  • Service description: This outlines the purpose your business will serve, which, in this case, is providing cannabis retail services.
  • Market research: Carry out intensive market research to understand the breadth of your market, as well as a competitor analysis to see how favorably your dispensary could compete in the market.
  • Marketing plan: This should include the 4 P’s: Product, Pricing, Place, and Promotion. This clearly defines what products you’ll be selling, at how much, what store locations you’re looking at, and your marketing strategy.
  • Financial plan: This should include at least a five-year financial forecast, with projected annual revenue, operational costs, and profits.
  • Investor proposal: This is the final step in creating your business plan. Ensure you have a legal team on board to help you draft a proposal that allows you to value your shares appropriately.
how to open a dispensary in new york

Research local regulations and zoning laws.

Following the passage of the Marihuana Regulation and Taxation Act (MRTA), several cities and towns opted out of cannabis, blocking the setting up of dispensaries in these areas. For this reason, it is crucial to know the local regulations for whatever location you have in mind for your dispensary.

Brick-and-mortar dispensaries have to adhere to local zoning laws, and consumption at dispensaries is limited to businesses that have an on-site consumption license.

Apply for a cannabis business license.

Currently, the Office of Cannabis Management is yet to avail the public with the regulations and requirements for purchasing an adult-use cannabis dispensary license. However, for medical marijuana, businesses can apply to join the state’s medical marijuana program. If accepted, they can cultivate and dispense medical marijuana.

What are the current cannabis laws in New York in 2022? 

The MRTA has legalized the recreational use of cannabis for adults aged 21 and above. They can buy and possess up to 3 ounces (85g) of cannabis flower, and 24 grams of cannabis concentrate (edibles, oils, tincture, vapes etc.) at any given time.

However, the OCM is yet to sanction any dispensaries from which citizens can purchase adult-use cannabis.

Registered patients with qualifying conditions may possess up to a 60-day supply of approved cannabis products at any time, and they (or designated caregivers) must have their medical marijuana registry ID card on hand at all times when possessing medical cannabis. 

What type of cannabis retail license do I need to open a dispensary in New York?

Knowing what retail license you need is a key requirement when you are figuring out how to open a dispensary in New York. Although the OCM is yet to start awarding licenses to adult-use cannabis retailers, the MRTA still provides information on the different license types available to cannabis businesses, depending on what area of the industry they would like to exploit. 

To open a dispensary in New York, you will need an adult-use retail dispensary license. This will permit acquisition, possession, sale, and delivery of cannabis products from a retail dispensary to consumers.

how to open a dispensary in new york

How do I get a cannabis dispensary license in New York?

To open a medical cannabis dispensary, your organization must first succeed with medical marijuana program application. The license acquired thereafter allows the business to cultivate and dispense medical cannabis. Two fees are required with this application; a non-refundable $10,000 application fee, and a registration fee of $200,000, which is refunded if the application is rejected.

The OCM is yet to draft regulations on applying for an adult-use dispensary license in New York. We shall update this section as updates come in.

How much does it cost to open a dispensary in New York?

Depending on the dispensary’s size, entrepreneurs can expect to spend from $500,000 to $1,000,000 to open a dispensary in New York. However, this estimate is based on figures for medical cannabis dispensaries, as the OCM is yet to assess the anticipated expenses and fees for recreational cannabis retail businesses.

how to open a dispensary in new york

How can you keep your dispensary compliant in New York?

After acquiring a cannabis license, it is important to maintain full compliance with all applicable state and local laws. You can do this by purchasing seed-to-sale software that allows you to update licenses, pay required taxes and fees, and maintain accurate records. It should also be integrable with state-sanctioned track-and-trace software.

What is the track and trace technology used in New York?

The state of New York partners with BioTrackTHC as its official track and trace software to monitor the progression of cannabis products from the point of cultivation to their sale to consumers. It helps the state and local governments to regulate cannabis consumption through the state and prevent illegal cannabis cultivation and distribution.

If you want to learn more about opening a dispensary in New York, download our free guide! 

how to open a dispensary in new york

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