How to Open a Dispensary in Massachusetts: 2021

So you’re wondering how to open a dispensary in Massachusetts? Well you’ve come to the right place. We’ll break down everything you need to know from legal to operations so you can set yourself and your future dispensary up for success.

In 2012, Massachusetts became the latest state to legalize the medical use of marijuana. Four years later, Massachusetts residents voted in favor of recreational legalization, marking a historic moment for the first state to criminalize “Indian hemp.” Since that period, there have been almost 250 licensed cannabis dispensaries in Massachusetts, with even more pending. And since the passing of new cannabis delivery regulations in New England, marijuana’s best days are The Bay State still ahead.  

 

Obtaining a license to operate, finding a location, and investing in a powerful dispensary POS system are just a few steps you should take to open a dispensary in Massachusetts. Luckily, BLAZE has you covered. In this article, we will go over:

  • Application and License Fees in Massachusetts

  • Day-to-day Business Operations

  • Marketing and Promotion

  • Banking

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

How to open a dispensary in Massachusetts

Licensing

To open a dispensary in Massachusetts, you must first apply then pay the non-refundable application and licensing fees. Be sure to check the laws and regulations in your municipality as well. 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 $1,000 for marijuana retail stores (brick and mortar). Once granted a license, you’ll then pay an annual licensing fee depending on the type of business you are building. This licensing fee can range is $10,000 for retailers. The fee fluctuates based on the type of business you want to establish. So if you want to open a cannabis microbusiness, the license fee is waived and the annual fee is cut in half. For indoor cultivators, the cost is broken down into tiers by the square foot. For a full breakdown, click here and check out the graph below. 

License Type

Application Fee

License Fee

Total Due

Retail Dispensary

$1,000

$10,000

$11,000

Delivery Operator

$1,500

$10,000

$11,500

Social Consumption Establishment

$1,500

$10,000

$11,500

Medical Grow Facility

$300

$1,000

$1,300

 

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 (500 feet in Massachusetts), 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 Massachusetts, dispensary rent costs are about the same as the median commercial property rate, about $11per square foot. 

For this reason, rent in a city like Boston can run your dispensary in an annual range of $250,000 – $330,000 for a 2,000 square foot retail space. For a city like Worchester, you could look to spend $150,000 – $200,000 per year on rent. This figure can help you determine the cost of renovations, furniture, hardware, security, and wages. 

Opening a dispensary in Massachusetts

 

Business Operations

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

 

Wages

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 Salary.com, the average salary of a budtender in Massachusetts is about 20 per hour. The average salary ranges from $34,000 – $43,000. If your dispensary sets a budget at $250,000 for wages, this means you can afford up to 7 staff members at your dispensary. 

 

Dispensary POS 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 Massachusetts 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 Massachusetts. With constantly updated software with real-time data, BLAZE lets retailers worry less about compliance and regulations and more about sales. 

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

 

Security

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. Each dispensary must employ a security agent or agency. Additionally, there must be a dedicated security room with security hardware such as security cameras and monitors. Other security measures include possessing high-resolution images; a perimeter and duress alarm; vaults, safes, and security boxes; and backup data for cameras and equipment. 

Dispensary security in Massachusetts can cost up to $50,000 – $70,000 annually. 

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

 

Product

If you’re a cannabis retailer that is not vertically integrated, your dispensary will need to purchase wholesale cannabis products. Although Massachusetts has legalized retail cannabis, they are scarce in outdoor cultivation. Since the state’s climate encourages an exclusive indoor grow market, prices can be a little high. However, this is normal and prices can go down as competition rises.

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

 

Indoor Premium

Indoor Average

$4,200 per lb

$3800 per lb

 

These figures just show the average prices of bud per pound by some of Massachusetts’s cannabis cultivators. If you want to know how to open a dispensary in Massachusetts 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 Chamber of Commerce, and find growers that fit your needs, values, and brand.

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 don’t allow for cannabis advertising. And in states where 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 Massachusetts, licensees must abide by the following advertising regulations:

  • Advertising through television, internet, and radio, unless 85% of the subject’s audience or presumed to be 21 years or older.

  • No advertising on billboards or public signage. 

  • Labeling of marijuana products not sold as marijuana products.

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

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. 

How much money it costs to open a cannabis dispensary in Massachusetts

Banking

Before you open a dispensary in Massachusetts, you must secure safe and legal 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. 

 

In Massachusetts’ new cannabis industry, there is a scarce number of banks currently doing business with dispensaries. Although only about six banks serve dispensaries, that number has doubled since 2018 and continues to grow. And just recently, a federal bank in Gardner, Mass.,  announced they can be preparing licensing loans as early as Fall 2021. 

 

Conclusion

Opening up a dispensary is tedious, but 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.

Dispensary POS in a Snap

Designed for budtenders, delivery drivers and front desk personnel, the iPad & iPhone Dispensary POS app makes customer interactions easy. Sign up members and get them checked out quickly by using the fastest, most intuitive Dispensary POS software in the industry.

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Need help or have questions about our products? Give us a call at: (415) 964-5689