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Cannabis App Development

How Much Do Dispensary Owners Make?

Posted by: Nikki Tabberrah

February 09, 2023


As the cannabis industry continues to grow, more and more people are becoming interested in opening their own dispensaries. One of the most common questions that arise when considering this career path is "How much does a dispensary owner make?". 

The answer to this question can vary greatly depending on a variety of factors such as location, business size, competition, state regulations and managing inventory costs among other factors. 

In this piece, we will take a deep dive into these factors and how they affect the earning potential of dispensary owners, along with the estimated cost to start one. By understanding these factors, you'll be better equipped to make an informed decision about whether opening a dispensary is the right move for you.


The Revenue and Profit Potential of Owning a Dispensary

According to a survey conducted by Leafly, the average revenue of a dispensary is around $2-3 million per year, with profit margins typically ranging from 20-40%. However, it's important to note that this figure can vary greatly depending on the location, size, and competition of the dispensary. 


More and more states are implementing their own laws and regulations for the sale and use of cannabis – so choosing the right location is key. 

According to a survey conducted by the Marijuana Business Daily, dispensary owner salaries can vary greatly depending on the state regulations in place. For example, in states with high taxes on cannabis sales, dispensary owners may earn less. Additionally, in states with strict zoning laws, it may be more difficult to open a dispensary, leading to fewer opportunities for owners.

Size of Operations

Owners of larger dispensaries may earn more than those with smaller operations as they have more resources to invest in their business and can generate more revenue. They are able to source supply in bulk, and gain access to resources that independent retailers can’t. 


Competition is another factor that affects a dispensary's revenue and profit potential. In locations with a high level of competition such as Oklahoma, Colorado and California, owners may have to work harder to attract customers and may earn less as a result. In areas with less competition, owners may be able to generate higher revenues and profits.

Experience and Education 

More than having a strong entrepreneurial spirit and financial capacity to fund a dispensary business, one must consider their own personal experience and first-hand knowledge about the cannabis industry and running retail businesses as a whole.

Having relevant education, such as a degree in business or past work experiences in dispensaries, can also help aspiring dispensary owners run their businesses with fewer learning curves along the way. Additionally, having a wide network and industry certifications can also help dispensary owners increase their earning potential.

Inventory Management Expertise

Moreover, cultivating and maintaining a profitable business lie in a dispensary owner’s ability to manage costs effectively. From pre-opening until the launch of day-to-day operations. 

A key challenge that new dispensary owners struggle with in their operations is inventory management. Without proper inventory management processes, dispensary businesses can bleed money as inventory cost is one of the biggest expenses of dispensaries. 

Inventory cost refers to the money spent on purchasing, storing, and maintaining the products that a dispensary sells.  Reducing inventory costs is the cornerstone of any successful retail business across industries. 

To keep costs low when running a cannabis business, it's important to source products from reputable and reliable suppliers to avoid potential waste or subpar products. Additionally, buying products in bulk can also help costs down.

Another important aspect of managing inventory costs is the proper storage and maintenance of products. Keeping products in optimal condition, such as storing edibles in a cool, secure, dry place and keeping flowers in the right humidity, can help to prolong their shelf life and reduce waste. 

Monitoring inventory levels to avoid overstocking or stock shortages is also an essential practice. 

Lastly, using sales data analytics to power business decisions is vital to how much dispensary owners can make. Dispensary owners can leverage e-commerce and m-commerce tools like websites and mobile apps to analyze sales performance and curate strategic efforts to increase customer engagement and drive sales consistently.

So how much do aspiring retailers need to start their own cannabis dispensaries?


The Cost of Starting and Running a Dispensary

The cost of starting a dispensary will also vary greatly depending on the location, size, and competition of the dispensary. On average, it can cost between $250,000 and $2 million to start a dispensary. This includes costs for licensing fees, equipment, inventory, and ongoing expenses such as rent, utilities, and employee salaries.

License Costs

For those looking to join the cannabis industry, taking your first steps can be quite an investment. You’ll need more than a green thumb to get things going. Though license application fees may vary between states, budgeting at least $5,000 is essential if you hope to have any chance at success - and that's before selling a single gram. On top of this initial fee lies an annual cost of anywhere between one thousand dollars up to five figures for more competitive markets.

Brick & Mortar Rental

Finding the ideal brick-and-mortar location for a dispensary is no easy feat - not only must it meet local regulations, but it also needs to have good visibility and be surrounded by places with plenty of foot traffic. 

On top of that, you can expect yearly real estate costs to run at least $100k as well as an additional one-time cost for remodeling going up to around another fifty thousand dollars upfront. 

Cannabis Banking Costs

Businesses in the cannabis industry are often hindered by their federally illegal status, preventing them from accessing traditional banking services. As a result, owners of dispensaries have no choice but to turn to either credit unions or private marijuana banks – at an expensive cost that can sometimes be as high as $2,000 per month for holding fees.

Ongoing Expenses

POS systems, security measures and ample inventory on hand are a must when it comes to getting things started - these can set you back approximately $25k combined. While some states allow dispensaries to grow products themselves, others will require an additional expense of around $1.5K per pound for indulgences ready-to-serve customers. And don't forget about advertising dollars: if several competitors exist where you do already – this could reach up towards another whopping 25 grand too. When all is said and done before launch day rolls around; be smart and budget resources for legal counsel/insurance policies as well just in case anything arises down the line either way once operating full steam ahead with doors wide open at last.

It's important to consider these factors when thinking about opening a dispensary and to have a solid financial plan in place to cover the expenses.

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