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Mass Weed Laws: How to Open a Dispensary in Massachusetts

Mass Weed Laws: How to Open a Dispensary in Massachusetts

Massachusetts was officially the first state on the East Coast to make recreational cannabis legal, and although the start was kind of slow, the market has recently surpassed the $5 billion mark. This officially makes Massachusetts one of the most profitable states in the USA as far as opening a dispensary is concerned. Therefore, if you are wondering how to open a dispensary in Massachusetts, then you’ve come to the right place.

Of course, knowing Massachusetts cannabis laws is very important here, and today we are providing you with a guide on just that.

However, this guide is about more than just providing you with some of the legal information that you need to know about opening a dispensary in Massachusetts, but it also serves as a general guide on how to bring your cannabis dispensary from idea to reality.

Not only do you need to be aware of Boston weed laws and Massachusetts weed laws in general, but you also need to know all about starting a business entity in Massachusetts, licensing, creating a retail outlet, and more. This is our ultimate guide on how to open a dispensary in Massachusetts, so let’s get to it.

1. Create a Massachusetts Business

Create a Massachusetts Business
Create a Massachusetts Business

In order to start a dispensary in the state of Massachusetts, you first need to create a business. This means that you need to start a formal business entity, which you can do together with a lawyer and accountant to ensure that you are following the correct steps.

At the very least, you’ll need to decide what your business structure in the state of Massachusetts will look like, which could be a sole proprietorship, partnership, an LLC, or anything else of the sort.

What you need to know about starting a business in Massachusetts is that your proposed business license has to be registered to do business in the Commonwealth as a domestic entity. You’ll also have to submit your business name, Massachusetts business identification number, articles of organization, bylaws, DBA names, and a certificate of good standing.

To register as an official company, you’ll also need to choose a name for the company, register the name, get tax identification numbers, open a business bank account with a cannabis friendly credit union or bank, and get business insurance as well.

The main point here is that to operate legally in the state of Massachusetts, you need to start an actual business entity. You can’t just open a dispensary one day without forming a legal business entity first. Doing so will ensure that you are legally registered in Massachusetts and in the USA, that you have all of the necessary information about taxation, that your business is insured, and that you’re following all necessary laws.

2. Create a Business Plan

Create a Business Plan
Create a Business Plan

The cannabis industry is a very difficult one due to all of the compliance and legal issues that you will be faced with. Therefore, you want to create a very in-depth business plan that you will submit along with your other paperwork in the application process. There are many different details that you’ll want to include in your business plan.

You need to add a section about your plans to be compliant with ordinances, bylaws, local codes, and more, for the physical address of the dispensary. You need to make sure that you’ve taken care of zoning issues and that you’ve identified all of the necessary permits you’ll need to operate in a specific area.

You’ll also want to include a variety of procedures, policies, and operating plans that describe exactly how your dispensary will be operated to remain compliant and safe.

A good idea is to also include some diversity plan which details your intentions to promote equality and equity among people of color, women, peoples with disabilities, LGBTQ people, and more.

Another part of the business plan should be a section on how you plan to create a positive impact in the community, particularly for people who have been disproportionately harmed. This is another part of the so-called equity plan. How is your business going to benefit these areas?

Other aspects that you want to include in your business plan are things such as the official business name, the company overview, a proposed timeline, the physical location, a funding plan, cost and revenue projections, staffing plan, liability insurance plans, and the environmental impact plan, a marketing plan, security and safety plan, a technology plan, and more.

3. Find the Right Location

Find the Right Location
Find the Right Location

Once you have officially created a business and a business outline, you’ll then need to find an actual location for your cannabis retail business. Of course, the location you choose for your dispensary should be highly visible, have more than enough space, and have great parking as well.

However, as far as the state of Massachusetts is concerned, there are some laws that you’ll need to follow in terms of choosing the location.

For instance, your dispensary has to be located in a municipality that legally allows for cannabis businesses. There are some municipalities in the state of Massachusetts that may not allow cannabis businesses to operate. The other big requirement is that your cannabis dispensary cannot be located within 500 feet the nearest school entrance.

What you also need to know here is that in order to start a cannabis dispensary in Massachusetts, you’ll need to have your location to get your license. If you do not have a location chosen when you apply for your license, you will be denied. The dispensary doesn’t have to be fully built yet, but you have to choose a location before applying for your license.

When choosing a location for your cannabis dispensary, consider the various opportunities for growth and expansion, consider being able to serve foot traffic, consider your own spatial requirements, and your budget as well.

4. Get Funding for Your Cannabis Dispensary

Now that you know where you’ll build your cannabis dispensary and what it will entail, you need to secure funding. Obviously, you can’t start a cannabis business if you don’t have any funding. Therefore, there are a variety of factors that you’ll need to consider here.

These include your build out and real estate costs, licensing and application fees, operational costs, security, software, hardware, staffing needs, inventory costs, and taxes as well.

The requirements to start a cannabis dispensary in terms of finances are pretty big, and this means that you’ll most likely need to find funding somewhere. That said, finding funding can also be somewhat difficult.

There are many options however that you have at your disposal here, such as self-funding your own business, getting money from friends and family, starting a business with partners, getting loans, applying for state programs, crowdfunding, brokers, and social equity programs as well.

Now, as far as funding is concerned, one of the things that you need to know about starting a dispensary in Massachusetts is that all of your funding has to be disclosed. This means that you need to disclose where your money comes from and how much of it is coming in as well. You need to establish the forms of capital that you are using.

Moreover, you also need to disclose the address, name, amount, contact information, source of the capital, and all necessary documentation.

Furthermore, perhaps the most important aspect here, you need to be able to confirm that all of the funds being used to invest in your dispensary were obtained or earned lawfully.  In case you’re wondering how much money you’ll need to start a dispensary in Massachusetts, at the very minimum, you’ll need around $250,000, although this can easily go up to $1 million or more.

5. Obtain Your Massachusetts Dispensary License

To legally run a dispensary in the state of Massachusetts, you need to have a recreational dispensary license. The Commission that runs the operation could stop granting licenses at any time, although there are no strict limits on the amount of licenses available.

To get your license, you’ll need to submit a detailed operational plan, an application, business plan, and a detailed diversity plan.

There are actually two steps to the licensing application process, including getting a provisional license, and then full licensure. There may also be some social equity opportunities for people who live in disproportionate impact zones. Follow the steps as listed below to apply for a recreational cannabis dispensary license in the state of Massachusetts.

  1. You’ll have to create an account and register it with the Massachusetts Cannabis Industry Portal.
  2. Organize all of your application materials, which include the diversity plan, the business plan, and the operational plan. These are all things that you should have already taken care of as laid out in the steps above. There is a licensing guidance booklet that provides you with a checklist of all of the documents that you’ll need.
  3. Once you have all of your materials gathered, you’ll need to submit a one time and nonrefundable application fee for the license, which is $1500.
  4. At the time of submission, you’ll also have to include many other pieces of information.
  5. First and foremost, you’ll have to include an application of intent, which is going to be the biggest part of the application. This includes all of your plans, documents, and business details. Here, you’ll have to provide both out of state and in state interests, the amounts and sources of your capital resources, any escrow and bond account information related to winding down or dismantling operations, property identification and interest documentation, Host Community Agreement Certification, community outreach meeting attestation and documentation, a plan on how you’ll remain compliant with all local ordinances, how you’ll impact disproportionately harmed people, and anybody that has indirect control.
  6. You’ll also need to include information about owners that have financial interests or equity greater than 10%, entities or peoples that have voting interest greater than 10%, close associates, or an entity or person that has rights to control, through contract or otherwise, to make decisions regarding strategic planning, acquisitions, divestments, operations, and capital allocations, who hasthe power to appoint more than 50% of the directors, who has the power to remove or appoint corporate level officers, who has the power to make major production, marketing, and financial decisions, who has the power to execute significant contract, and who will earn more than 10% of the profits.
  7. Furthermore, every entity and individual that is listed on the application must then undergo a thorough background check, which includes a check of both national and state criminal database records, national and state civil database records, and any information regarding the entity’s or individual’s involvement in other cannabis related businesses.
  8. Finally, you’ll also need to include an operations and management profile. This covers various pieces of information, such as your articles of organizations, legal name, certificates of good standing, a proposed timeline for your operation, a plan to get liability insurance, detailed business plan, a plan of operating policies and procedures, a diversity plan, and a plan for obtaining cannabis from licensed producers.
  9. You can now enter your submission, at which point it will enter a queue where it will wait to be reviewed. Upon review, you’ll either be accepted or denied, and if you are denied, you’ll be provided with detailed information about what you are missing and why you’ve been denied. You can then work to resolve the issues that resulted in your denial, so you can hopefully get your dispensary up and running as quickly as possible.

6. Create and Market Your Dispensary

Now that you have your business plan, your licenses, and your physical location, it’s time to build and create the dispensary. To build a dispensary, hiring a cannabis dispensary design company is always recommended.

You need to make sure that your dispensary meets all requirements in terms of secure entrances, cannabis storage, restricted access areas, security measures, having proper equipment, non-visible products, emergency procedures, floor plans, safe cash handling and transportation procedures, and more.

You’ll also have to get security systems, including perimeter or alarms, duress or holdup alarms, video cameras, continuous video recording, embedded date and time stamps on recordings, exportable video still images, a backup alarm system, a current list of authorized personnel, and more.

As you can see, there’s a whole lot that goes into opening a dispensary in Massachusetts. Remember, you have to follow all MA cannabis laws!

Conclusion

Seeing as the cannabis industry is set to keep growing at a record pace, opening a dispensary in Massachusetts definitely appears to be a great idea. You’ll need to get your articles of organization and create a business, find a location, get funding, and obtain your Massachusetts dispensary license.

If you can manage to do all of these things, while always keeping Massachusetts weed laws in mind, the rest should fall into place on its own.

The bottom line here is that when it comes to how to open a dispensary in Massachusetts, as long as you are familiar with Massachusetts pot laws, and you follow all of the steps as listed above, you should have no problems opening and running a successful dispensary.

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Author

Fabian R.

I hold a Bachelor's degree in Political Science from Ryerson University in Toronto, Canada. With close to a decade of professional experience, my expertise lies in content writing, blogging, and copywriting. I've dedicated the past 10 years to crafting content centered around health, fitness, and cannabis subjects. My strengths include exceptional writing abilities, effective communication, and a track record of delivering swift results.