How to Open a Dispensary in Massachusetts

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How to Open a Dispensary in Massachusetts in 2024

To start a cannabis dispensary in Massachusetts, you must obtain an MTC or a marijuana retailer license from the Massachusetts Cannabis Control Commission (CCC). At the pre-certification stage of your application, you need to get certain authorizations from the municipality where you plan to set up. Subsequently, you can finish the rest of the application on the CCC licensing portal. Qualifying applicants under the social equity program can enjoy priority application reviews and access grants and loans under the social equity trust fund.

Why Open a Dispensary in Massachusetts?

The Massachusetts medical and recreational cannabis markets offer significant business opportunities for entrepreneurs. The state's adult-use cannabis market has generated over $5 billion in sales between May 2018 and September 2023 while cumulative medical cannabis sales amounted to $1.16 billion over the same period. It is noteworthy that only 1.6% of marijuana retailers have surrendered or allowed their licenses to expire since dispensaries opened in the state in 2018.

Despite the current boom in the cannabis sector, if you are an entrepreneur looking to invest in the cannabis industry, it is important that you carefully research cannabis laws in the state before setting up a dispensary.

Types of Dispensary Licenses in Massachusetts

The Cannabis Control Commission in Massachusetts issues two types of dispensary licenses. If you are looking to set up a dispensary in any municipality in the state, you must obtain a:

  • Medical Marijuana Treatment Center (MTC) license; or
  • Marijuana Retailer license under the Marijuana Establishment license type

An MTC license allows the licensee to operate a vertically integrated business, permitting the cultivation, processing, and retail of the business' marijuana and marijuana products for medical use. The license also allows the licensee to deliver marijuana and marijuana products to registered patients. A marijuana retailer license authorizes the licensee to purchase and transport marijuana and its products from marijuana establishments in the state and sell to consumers aged 21 or older.

If you plan to deliver cannabis to users, you must obtain a marijuana courier license, marijuana delivery operator license, or a delivery endorsement. These licenses grant specific authorization, such as:

  • Marijuana Courier: Formerly called the delivery-only license, the marijuana courier license in Massachusetts is a stand-alone license that allows you to deliver marijuana and its products to consumers and patients from an authorized cannabis retailer or a medical marijuana treatment center. This license does not authorize you to store marijuana and its products overnight at your business premises
  • Delivery Operator License: This stand-alone license allows you to purchase marijuana and its products from authorized marijuana cultivators and marijuana product manufacturers and sell and deliver them to consumers. This license permits you to store marijuana and its products purchased at wholesale overnight in your premises for eventual resale to consumers
  • Delivery Endorsement: This provides expanded permission to an existing license to perform marijuana delivery operations

How to Get a Massachusetts Dispensary License

To get a medical marijuana treatment center license or a marijuana retailer from the Cannabis Control Commission, follow these steps:

  • Review cannabis governing laws: The Massachusetts CCC recommends researching the governing statutes and regulations related to adult-use or medical-use marijuana in the municipality where you intend to set up a cannabis dispensary. Some municipalities may require additional steps before you submit an application to the CCC. The CCC provides a municipal zoning tracker on its website to help identify the zoning and bylaws of recreational marijuana for the 351 cities and towns in Massachusetts. You should consult with the relevant local authorities to find out the current requirements necessary to open a dispensary in the area
  • Prepare necessary plans: You should initiate research and write specific plans for your business before submitting an application to the Massachusetts CCC. Such plans include a business plan and an operational plan. These plans must be compliant with medical use or adult-use cannabis regulations in the state
  • Gather the required information: You will be required to provide specific information related to your application when accessing the cannabis information portal to complete a license application process. Therefore, you should gather the relevant information before starting the application process. The information required includes identifying data related to the persons and entities listed on the retail or MTC license and those who will have control over your dispensary business. For more information on the entities and persons that must be included in your application, see the Massachusetts cannabis regulations
  • Hold a COM and sign an HCA: As part of the dispensary license application process, you must submit evidence that you held a Community Outreach Meeting in the municipality where you intend to set up a dispensary. You must also show proof that you signed a Host Community Agreement with the municipality. During the meeting, you will provide vital information about your proposed cannabis business and its potential impacts on the community and neighborhood. For more information on COMs and HCAs, see the community outreach meeting and the host community agreement pages on the CCC website
  • Submit your cannabis license application: Applications for cannabis businesses, including dispensaries, must be submitted online. Visit the Massachusetts Cannabis Industry Portal (MassCIP) to commence your application for an MTC license or marijuana retail license. For more information on how to use the MassCIP, see the tutorials on the MassCIP tutorials page of the CCC website
  • Wait for approval: The CCC assesses applications based on their priority status and submission date. Within 90 days of submitting your license application, the Commission will either grant a provisional license or issue a rejection upon review. The review process includes inspections, background checks, and fingerprinting for all listed individuals on the license

A certification form will be forwarded to the host municipality to confirm compliance with local codes and ordinances for your establishment. After completing these steps, the Commission may then evaluate your application for the issuance of a final license

  • Final inspection: Before commencing operations, your establishment will undergo an additional inspection. Once the inspection report has been reviewed, your dispensary will be authorized to begin operations

For more information on obtaining a dispensary license in Massachusetts, contact the CCC by calling (774) 415-0200 or emailing

Information and Documents Required for a Dispensary License in Massachusetts

There are 3 mandatory sections on the license application on the MassCIP, which all require specific information and documentation for upload. Each section and the required information are highlighted below:

  • Application of Intent
  • Disclosure of persons or entities having direct or indirect control of the dispensary business
  • Disclosure of in-state Interests
  • Disclosure of out-of-state Interests
  • Disclosure of capital resources
  • Bond or escrow account with enough funds to cover the winding down of the dispensary
  • Disclosure of the location of the proposed dispensary
  • HCA (Host Community Agreement) certification
  • COM (Community Outreach Meeting) attestation and documentation
  • Plan to remain compliant with local ordinances
  • Plan to positively impact disproportionately harmed people
  • Background Check Section
  • CORI Acknowledgement Form
  • Disclosure and Acknowledgment Form
  • Release Authorization Form

Note that these forms are available on the CCC’s website. Once each required individual has completed the forms, the documents should be returned to the applicant. The CCC recommends that the applicant scan each individual's documents and government-issued identification card as one file, label it appropriately, and upload it into the application.

  • Management and Operations Profile Section
  • Business name
  • Massachusetts Business Identification Number
  • Articles of Organization
  • Bylaws (or the dispensary's operating agreement in cases of LLCs or other applicable entity structures)
  • Doing-business-as (DBA) names
  • Certificates of good standing
  • Business Plan
  • Liability Insurance Plan
  • Proposed Timeline
  • Summary of Operating Plans, Policies, and Procedures
  • Plan for obtaining marijuana from licensed marijuana establishments
  • Diversity Plan

What Plans Do You Need to Open a Dispensary in Massachusetts?

The Massachusetts Cannabis Control Commission requires applicants for dispensary licenses to submit several plans. One of the most crucial plans needed to set up and operate a cannabis dispensary is the business plan. A well-structured business plan serves as a guiding framework for your dispensary operations and potential business expansion.

A business plan should include the following key aspects:

  • An executive summary
  • Business description
  • Team management and organizational structure
  • Product lineup
  • Market analysis
  • Sales and marketing strategies
  • Budgetary projections
  • Financial projections

Other plans required to obtain a dispensary license include:

  • Plan to Remain Compliant with Local Ordinances: This plan describes how the applicant plans to ensure that the dispensary is or will be compliant with local codes, ordinances, and bylaws for its physical address. The plan should include, but not be limited to, the identification of all local requirements for the sale of adult- or medical-use marijuana
  • Plan to Positively Impact Disproportionately Harmed People: This plan must highlight the applicant's strategies to positively impact past or present residents of geographic areas of disproportionate impact, economic empowerment priority applicants, social equity program participants, Massachusetts residents with previous drug convictions, and Massachusetts residents with spouses or parents with drug convictions
  • Liability Insurance Plan: This must detail a plan for obtaining liability insurance that satisfies the regulatory requirements. Applicants do not have to obtain any insurance policies until they are licensed
  • Operation Plan: All applicants must submit specific plans, policies, and procedures for operating a dispensary as required under Massachusetts laws. These plans, policies, and procedures must be precisely drafted to comply with the CCC regulations and guidance documents
  • Diversity Plan: This plan must outline the business' strategies to promote equity among minorities, women, veterans, people with disabilities, and LGBTQ+ individuals in the operation of the dispensary. The plan must indicate the goals, programs, and measurements the dispensary will pursue once provisionally licensed. All goals should be measurable and quantifiable

Are There Municipal Requirements for Opening a Cannabis Dispensary in Massachusetts?

Yes. Massachusetts law allows its municipalities to ban, restrict, and require further steps beyond the state-stipulated procedures for establishing cannabis dispensaries within their borders. Such steps include obtaining a local zoning permit and business license. For specific requirements in the municipality where you plan to set up a dispensary, consult with the local authorities in the area.

How Long Does It Take to Get a Massachusetts Dispensary License?

The typical licensing process for cannabis dispensaries usually takes 3 months from application to approval.

Where Can You Locate a Cannabis Dispensary in Massachusetts?

Massachusetts municipalities have specific zoning regulations for where dispensaries may be located in their jurisdictions. Hence, you must adhere to the local guidelines in which the city or town where your dispensary will be located. Also, there are specific distance buffer requirements from certain public locations and buildings for dispensary businesses. Except in cities or towns that have adopted an ordinance by law reducing the distance required, a dispensary may not be located within 500 feet of a pre-existing school providing education in kindergarten or any grades 1 through 12.

Can Licensees Have More Than One Dispensary Location in Massachusetts?

Yes, a dispensary may be licensed to operate in more than one location in Massachusetts. However, no medical marijuana dispensary may be allowed to operate in more than three locations, and no adult-use cannabis dispensary may be licensed to operate in more than three locations.

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

The costs for setting up and running a cannabis dispensary in Massachusetts vary depending on the scope of operations. However, you may use the following costs as an estimate:

  • Application fee: $1,500 (MTC) or $3,500 (marijuana retailer)
  • Initial and annual licensing fee: $10,000 (MTC) or $50,000 (marijuana retailer)
  • General Fees (some are optional):
  • Name change: $1,000
  • Location change: 50% of the applicable license fee for adult-use license or $10,000 (medical-use)
  • Building structure change: $1,000
  • Ownership or control change: $5,000 per entity, per license
  • Ownership or control change: $500 per person
  • Architectural review request: $1,500
  • Startup Costs: $50,000 - $150,000 (includes costs for inventory, equipment, marketing, real estate, construction, and legal fees)
  • Operating Costs: $50,000 per month (includes costs for utilities, rent or mortgage payments, marketing and advertising, staff salaries, security, inventory, and insurance). Note that depending on the size of the dispensary and its operations, the approximate costs may vary
  • Taxes: 6.25% sales tax, 10.75% excise tax, up to 3% community impact fee (charged on gross annual sales), and a local tax of up to 3%

Note that additional fees exist for the following:

  • Background checks for individuals associated with the dispensary license application
  • Fingerprinting for individuals associated with the dispensary license application
  • Monthly Metrc Program fees (once licensed)
  • Application fees for registering and renewing agents (once licensed)

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

Per the Massachusetts Licensure Guidance document, dispensaries are required to carry the following insurance policies:

  • General liability insurance: This policy covers personal or property damage and bodily injury on the dispensary premises. Dispensaries must maintain general liability insurance coverage of no less than $1,000,000 per occurrence and an annual aggregate coverage of $2,000,000. The deductible for this policy may not be higher than $5,000 per occurrence
  • Product liability insurance: This covers the costs related to any potential legal claims, lawsuits, and compensation that may arise due to injuries, property damage, or other losses caused by a defective product purchased from a dispensary. The dispensary must maintain product liability coverage of at least $1,000,000 per occurrence and an annual aggregate limit of $2,000,000. The deductible for this policy may not be higher than $5,000 per occurrence
  • Surety bond: A dispensary license applicant must set aside, via a bond or an escrow account, enough money to cover the dismantling and winding down of the dispensary. The amount set aside must potentially cover the cost of satisfying any outstanding municipal or state sales tax obligations, costs incurred securing the dispensary facility, and costs incurred destroying the cannabis and cannabis products in its inventory. If a dispensary license applicant establishes an escrow account, the applicant must set aside a minimum of $5,000 and the total amount of their licensing fees

Nonetheless, these coverages are not the only ones required. In adherence to Massachusetts regulations, businesses must also maintain workers' compensation insurance when employing workers and commercial auto insurance if the dispensary owns a vehicle.

How to Get a Grant to Open a Dispensary in Massachusetts

To set up a dispensary in Massachusetts, you need a substantial amount of funds. It is expedient that you have the required funding secured before filing a dispensary license application. Since most financial institutions do not offer loans to cannabis businesses, including dispensaries, you may have to consider one of the following options to raise funds:

  • Private funding from family and friends: This source of funding can provide initial capital, often with less stringent terms and conditions, but it may put personal relationships at risk if the business encounters difficulties
  • Cannabis-specific lending institutions: Some specialized financial institutions offer loans tailored to the needs of cannabis entrepreneurs. These lenders have expertise in navigating the regulatory complexities of the industry and can be a viable option when sourcing funds
  • Startup funding from investors: Entrepreneurs can attract investors to provide capital in exchange for equity in the business. However, this may require entrepreneurs to give up a portion of business ownership and control
  • Self-funding: Self-funding involves using personal savings, assets, or resources to finance the startup of a cannabis dispensary
  • Social Equity Program loans: According to Chapter 180 of the Acts of 2022, a cannabis social equity trust fund is available to eligible social equity program participants in Massachusetts to access grants and loans, including forgivable loans and no-interest loans

Does Massachusetts Have a Social Equity Program for Cannabis Dispensaries?

Yes, Massachusetts has a social equity program for cannabis businesses, including dispensaries. The social equity program is a comprehensive statewide initiative offering cost-free technical support and training to specific categories of cannabis license applicants and licensees. Its objective is to lower the barrier for entry into the cannabis industry for individuals disproportionately affected by the War on Drugs, including those who have faced disproportionate arrests and imprisonment due to marijuana prohibition.

To be eligible for the social equity program, you must meet one of the 4 eligibility criteria under the program. You must:

  • Reside in a Disproportionate Impact Area (DIA) for five of the last 10 years, and your income must not exceed 400% of the Area Median Income (AMI) of your municipality of residence, based on DIAs. You can search an address to determine if it is designated as a DIA. Instructions for searching an address can be found in a guidance document on the CCC website.
  • Have had a drug conviction or continuance without a finding for an offense pursuant to M.G.L. c. 94C or an equivalent conviction in another jurisdiction at a point in your life. Also, you must reside in a Massachusetts location for the past 12 months to be eligible under this condition. Residency in a DIA is not a requirement under this criterion
  • Be the child of or spouse of an individual who experienced a drug conviction or continuance without a finding for an offense pursuant to M.G.L. c. 94C or an equivalent conviction in another jurisdiction at any point in their life. For this criterion to apply, you must have resided in a Massachusetts location for the preceding 12 months prior to your application. Residency in a DIA is not a requirement
  • Be listed as an owner on the original certification of a CEEPA (Certified Economic Empowerment Priority Applicant) fulfilling one or more of the following criteria:
  • Resided for at least five of the preceding 10 years in a DIA
  • Experience in a position where the primary population served was disproportionately impacted or where primary responsibilities included resource provision, economic education, or empowerment to disproportionately impacted communities or individuals
  • African-American, Black, Latino, or Hispanic descent
  • Other significant articulable demonstration of experience in or business practices that promote economic empowerment in a DIA

SEP participants enjoy various benefits, including access to training and technical support within their cohort and a library of course materials from previous cohorts. They can also enjoy benefits such as:

  • A pre-certification application that offers preliminary status for license suitability
  • Exclusive access to pro-bono or discounted wrap-around services, including legal counsel, human resource professionals, and accountants
  • Access to CCC-offered resources, events, and job opportunities through the Equity Involvement Form
  • Priority review for licensing applications
  • Expedited review if SEP participants maintain a minimum 10% ownership stake in their business

Note that apart from training and technical assistance, all program benefits become accessible immediately upon participants' acceptance into the SEP. For more information on applying for inclusion in the program, see the CCC website's social equity program FAQs page.

Does Massachusetts Tax Marijuana Dispensaries?

Yes, Massachusetts taxes cannabis dispensaries. There are 4 different taxes on marijuana sales in Massachusetts:

  • State Excise Tax: A 10.75% excise tax must be included in the final price for marijuana products by licensed retailers. There is no excise tax on medical cannabis sales
  • Sales Tax: The state sales tax of 6.25% applies to retail purchases of marijuana and marijuana products. There is no sales tax on medical marijuana sales
  • Local Tax (optional): Municipalities are allowed to impose an additional local tax of up to 3% on retail purchases of marijuana and marijuana products. Local marijuana taxes are returned to the municipal government at least quarterly. The local tax does not apply to medical marijuana sales
  • Community Impact Fee: A municipality has the authority to levy a community impact fee to offset the expenses incurred due to the operation of a dispensary. This fee is capped at 3% of the establishment's gross annual sales and cannot remain in effect for more than 5 years

The Massachusetts Department of Revenue collects state-imposed cannabis taxes.

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Massachusetts Marijuana Business