How to Open a Dispensary in Colorado: 2021

In March 2000, Colorado residents voted in favor of Amendment 20, which allowed for the medicinal use of cannabis for adults. Twelve short years later, recreational use was permitted and Colorado’s green rush had officially begun. Since that period, nearly 600 recreational and 500 medical dispensaries have found a home in The Centennial State. In 2020, Colorado eclipsed $2 billion in dispensary sales, up 25% from the previous year. With Governor Polis signing Bill 21-111, which aims to give social equity licenses to new applicants, those numbers will rise.

Obtaining a license to operate, finding a location, and investing in a powerful cannabis software system are just a few steps you should take to open a dispensary in Colorado. Luckily, BLAZE has you covered. In collaboration with Adam Benko, the co-founder of MJstack, this guide and their industry expertise will give you all the information necessary to open a successful cannabis dispensary in Colorado. This includes:

  • Application and License Fees in Colorado

  • Day-to-day Business Operations

  • Marketing and Promotion

  • Banking

Each state, city, and county operates differently, and there exist different regulations on how you can operate. If you’re wondering where to start, this is the perfect place. So read on to learn how to open a dispensary in Colorado in 2021.

How to open a dispensary in Colorado infographic


To open a dispensary in Colorado, you must first apply then pay the non-refundable application and licensing fees. It is also advisable to first get a local city or county license if your jurisdiction requires it. This can save your dispensary valuable time and money. It can also determine if your dispensary can fully operate in the city you’re applying to.

The application fee for an annual license costs $5,000 for both medical and recreational stores. Then, you’ll pay an annual licensing fee depending on the type of business you are building. This licensing fee can range between $1,200 – $8,000 for retailers, cultivators, delivery businesses, and labs. For a full breakdown, click here and check out the graph below.





Costs of opening a dispensary in Colorado


Opening a Dispensary in Colorado is All About Location

There are some unique challenges when locating real estate for your dispensary. Not everyone is comfortable renting out their space for a cannabis operation. Moreover, most states have strict regulations about where a dispensary can be located, such as proximities to schools, daycares, and other dispensaries. Some cities can also elect not to adopt ordinances that grant access to cannabis store-fronts, meaning cannabis delivery is only acceptable. 

In Colorado, the number of dispensaries around the state has regulated dispensary retail expenditure. At the beginning of legalization, some landlords were charging up to $20 per square foot for dispensaries and cannabis retailers. Fortunately, those prices have now become comparable to the average retail rent price in Colorado, which is about $11 – $14 per square foot.

For this reason, rent in a prime location can run your dispensary in an annual range of $200,000 – $330,000 for a 2,000 square foot retail space. This figure can help you determine the cost of renovations, furniture, hardware, security, and wages. 

Colorado legal cannabis

Business Operations

The cost of doing business is omnipresent in the cannabis industry, especially in Colorado. Day to day costs such as wages, security, and a reliable cannabis software system are considerable investments. Let’s break down the ongoing cost to operate a dispensary.



Having a fully-trained and well-paid staff is invaluable for dispensaries to operate smoothly. Depending on your size and market need, you need to estimate how many budtenders and staff you should hire. According to data from, the average salary of a budtender in Colorado starts at $14 per hour. The median salary is around $32,000. If your dispensary sets a budget at $250,000 for wages, this means you can afford 7 staff members at your dispensary.

Cannabis Software

Unique obstacles and opportunities in the cannabis industry require a point of sales (POS) system tailored for a dispensary. These cannabis POS systems should help manage your inventory, transactions, and compliance with your state. Since Colorado has one of the most comprehensive cannabis regulation laws in the country, a solid dispensary POS is an asset for new dispensaries. 

Systems such as BLAZE offer a full suite of dispensary services. Features such as seed-to-sale software and cannabis distribution software add more value to your dispensary. Based in Los Angeles, BLAZE is a valuable software that understands the ins and outs of opening a dispensary in Colorado. With software that is constantly updated with real-time data, BLAZE lets retailers worry less about compliance and regulations and more about sales. 

Depending on your needs, cannabis software ranges from $300 – $600 a month, plus additional fees for hardware such as iPads, iPhones, and POS equipment.


Cannabis security is a necessary investment to keep your dispensary safe from break-ins and robberies. Surveillance hardware such as cameras and monitors not only helps deter crime but maintains compliance. Dispensary security in Colorado can cost $50,000 – $70,000 annually.


For a complete breakdown of Colorado’s dispensary security laws, read more here.



If you don’t grow your own cannabis, your dispensary will need to purchase wholesale products. Having a diverse and expansive product selection, including vapes, flower, CBD, edibles, and accessories will give you the best chance at reaching more customers and increasing shopping carts.


According to data from, those who want to open a dispensary in Colorado can look to pay the following prices for wholesale flower:

Opening a dispensary in Colorado costs


These figures just show the average prices of bud per pound by some of Colorado’s cannabis cultivators. If you want to know how to open a dispensary in Colorado while getting the best wholesale deals that fit your budget, the most effective thing you can do is network. Get with local groups, such as The Cannabis Chamber of Commerce, and find retailers that fit your needs. Be upfront with your budget and filter out who you can work with while still upholding your brand and core values.

Colorado cannabis farm


Marketing and Promotion

Although cannabis marketing can be just as effective as in any other industry, there are still some challenges. Platforms such as Google and Facebook won’t allow for cannabis advertising. And in states recreational cannabis is legal, there are strict regulations on how dispensaries can promote themselves. However, this is hardly an obstacle and should push you to try more creative channels to market your brand. A good rule of thumb is to dedicate 3-5% of your yearly gross revenue to marketing, advertising, and promotion. 


In Colorado, licensees must abide by the following advertising regulations:

  • No false or deceptive statement should be asserted to any customer
  • Television and radio advertising is prohibited unless the dispensary can provide reliable evidence that no more than 30% of the stations’ audiences are over the age of 21.
  • It is illegal for dispensary ads to target out-of-state persons 

  • All ads must target audiences that are 21 and older in print media.

  • Pop-up advertising on the internet is prohibited 

For a full list of Colorado cannabis marketing regulations, click here


Overcoming Marketing Challenges

According to Adam, the cannabis industry still faces many marketing challenges. “The learning curve can be challenging for some and unless you are able to quickly pivot or innovate on your existing strategies you will fail.” 

“Another challenge to consider is the fact that state compliance regulations differ from market to market making it hard to deliver seamless customer messaging, especially if you operate a cannabis business in multiple markets.”

In an industry powered by startups, the best way to get noticed is to invest in your marketing and advertising by partnering with cannabis technology experts who can help you navigate these unique regulations. As it stands, focusing on your website, organic social media, email marketing and SEO are four ways you can circumvent these restrictions in cannabis advertising and marketing. If you can stay agile and adapt, you can not only survive, but thrive in this growing industry.


To determine an accurate marketing budget, check out the Licensing table and deduce 3-5% of your yearly gross revenue. This number is what you should spend on marketing your dispensary.



Before you open a dispensary in Colorado, you must secure banking. Because it’s not yet legal on the federal level, many banks tend to shy away from doing business with a dispensary. This is why some dispensaries are cash only or do business with local credit unions. 


At the time this article was written, efforts to secure federal banking for Colorado dispensaries had stalled in Congress. However, Governor Jared Polis and the Colorado legislature are currently drafting proposals to give dispensaries more access to financial institutions. 


According to The Colorado Sun, as many as 35 banks in Colorado do work with cannabis retailers. Some are local banks and credit unions that operate under strict circumstances, but that number exceeds most other states. Colorado’s push for legal cannabis banking could create opportunities for credit lines, loans, and financial pillars that help businesses flourish. 


Making Banking Easier with MJStack


For Adam and his team at MJstack, making cannabis banking easier is their top priority. The cannabis tech powerhouse teamed up with Green Check Verified to implement the most comprehensive cannabis banking in the country.


“Our partnership with Green Check Verified is entirely focused on giving better banking access to our mutual customers.

Green Check Verified helps pair cannabis businesses with affordable banking by partnering with financial institutions that have actively chosen to work with the industry. Our role at MJstack is twofold. First, we act as an intermediary —  helping cannabis owners and operators who are in need of reliable financial services and banking options get in touch with Green Check Verified so they can start that journey.

Secondly, we also can help cannabis businesses build out a well-integrated cannatech ecosystem, of which Green Check Verified is a necessary part of.

Together, we are advocates for our customers, empowering cannabis operators and the industry at large to reach the level of maturity needed to change the mindset around what it means to sell cannabis.
And as an added bonus, both of our services are entirely free to use for cannabis operators!”



Opening up a dispensary is tedious and tiresome, but totally worth it. The cannabis industry is growing rapidly and cannabis use is on the rise in every adult demographic. That’s why now is the perfect time to open a dispensary. 

Dispensaries that use BLAZE cannabis POS software are already at a major advantage. Our seed-to-sale software enables vertical integration that can elevate your dispensary to new heights. BLAZE Distro software takes the worry out of inventory management and reporting. And powerful integrations make sure you’re covered on all fronts – from cultivation, to compliance, and even delivery. Book a demo with BLAZE today if you’d like to open a dispensary in the simplest way possible.

Subscribe to our Newsletter

Sign up to receive monthly updates, industry news, webinars and more!