How to Open a Dispensary in Nevada

How to Open a Dispensary in Nevada in 2024

The State of Nevada is not currently accepting applications for retail store licenses. The last application window opened in 2018 and required applicants to submit completed applications to the Department of Taxation. Applicants were required to obtain proof of compliance with municipal requirements and pay the full licensing fee when submitting their applications. The state’s social equity program is only open to cannabis business license applicants looking to obtain independent cannabis consumption lounge licenses.

Why Open a Dispensary in Nevada?

The Nevada cannabis market continues to flourish despite a 4% reduction in total marijuana sales in the 2022 fiscal year compared to the 2021 fiscal year. In 2022, the state recorded medical and adult-use cannabis purchases totaling over $965 million, with the bulk of the purchases occurring in Clark County and Washoe County. The state also generated over $63 million in wholesale cannabis excise tax and nearly $90 million in retail cannabis excise tax in the 2022 fiscal year. Considering the size of the cannabis market in Nevada, there is a strong demand for cannabis in the state.

Types of Dispensary Licenses in Nevada

The Nevada Department of Taxation issues only one type of retail license. To open a cannabis dispensary in any Nevada jurisdiction, you must obtain a retail store license. A Nevada retail store license permits the licensee to:

• Purchase cannabis from cultivation facilities
• Purchase cannabis and cannabis products from product manufacturing facilities
• Purchase cannabis from other retail stores
• Sell cannabis and cannabis products to consumers

How to Get a Nevada Dispensary License

The Nevada Department of Taxation (NDOT) is not currently accepting applications for marijuana retail store licenses. The NDOT will issue a 45-day notice prior to the opening of an application window. To get notified when the new application window opens, sign up for notifications on the State of Nevada Department of Taxation website.

Information and Documents Required for a Dispensary License in Nevada

Per the 2018 application requirements for retail store license applicants, the following information and documents were necessary to complete a license application:

• Nevada Name of Establishment (DBA)
• Nevada Department of Taxation Identification Number
• Federal Tax Identification Number
• Physical address of the dispensary
• Mailing address of the dispensary
• Dispensary business operations Hours
• Agent card designee name, email address, and telephone number
• Copies of the owner's active agent cards
• A copy of your Zoning Approval Letter issued by your local jurisdiction
• A copy of your distance approval issued by your local jurisdiction or a copy of a professional survey illustrating that you meet the distance requirement
• A copy of the Certificate of Occupancy issued by your local jurisdiction
• Owner, officer, and board member information form
• A documentation in the form of a letter signed by the property owner or a copy of a lease signed by the property owner indicating approval of marijuana establishment operating at said property address
• A copy of your State of Nevada Business License
• A copy of the business license issued by your local jurisdiction
• A copy of your Inspection Letter showing no deficiencies or an approved plan of correction

Note that other specific documents or information may be required when the new application window opens

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

Although it is not yet clear what types of plans will be required for retail store license applications when the next application window opens, the following are typical plans that may be required:

• Business Plan: A comprehensive business plan is essential to outline your dispensary's overall strategy and operations. It demonstrates your knowledge of the Nevada cannabis industry and serves as a roadmap for your business's success. The following are expected to be included in your business plan:
• Description of your dispensary, including its mission, vision, and values
• Market analysis detailing your target customer demographics, competition, and market trends
• Operational plan outlining day-to-day activities, staffing, and standard operating procedures (SOPs)
• Financial projections, including startup costs, revenue forecasts, and profit margins
• Marketing and branding strategies to establish a strong presence in the market
• Compliance measures to adhere to state and local regulations
• Security Plan: The security of employees, equipment, and inventory is important to the operation of a dispensary. A robust security plan demonstrates your commitment to safeguarding all components of dispensary business. The plan should contain:
• Physical security measures, such as surveillance camera placement, alarm systems, and access control
• Inventory security protocols to prevent theft and diversion
• Employee training on security procedures and emergency response plans
• Compliance with state security requirements, including safe storage of cannabis products
• Inventory Plan: Effective inventory control is crucial to maintain accurate records, prevent diversion, and comply with state regulations governing cannabis tracking. A good inventory plan should include:
• Detailed procedures for receiving, storing, and dispensing cannabis products
• Tracking software and record-keeping methods to monitor inventory levels and transactions
• Auditing and reconciliation processes to ensure consistency between physical and recorded inventory
• Compliance with seed-to-sale tracking systems mandated by state regulators
• Site Plan: A site plan not only demonstrates your commitment to adhering to local zoning regulations but also ensures your dispensary's compliance and suitability for operations in line with state and municipal regulations. A site plan will typically illustrate the following:
• A detailed map or diagram showing the dispensary's location within the property
• Measurements indicating the distance between the dispensary and any sensitive areas, such as schools, churches, or childcare facilities, as required by local and state regulations.
• Layout of the building, including entrances, exits, and security features
• Parking facilities and designated areas for customer and employee parking
• Landscaping and exterior features to enhance the aesthetics of the property and maintain compliance with local ordinances

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

In Nevada, before you may obtain a marijuana retail store license from the Cannabis Compliance Board, you must get approval from the respective city or county jurisdiction. As per the last application window application requirement, a municipal authorization documentation attesting that the applicant has complied with all city- or county-specific requirements and a municipal business license must be submitted to be approved for a state cannabis retail store license. These requirements vary from one municipality to another. Therefore, you must contact the relevant authorities in the jurisdiction where you intend to set up a retail store to learn the specific requirements to operate a cannabis business in the area.

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

According to the 2018 application window facts, the evaluations and scoring period for the applications received during the 10-day window took 90 days. However, applicants reported to have received their licenses over varying periods ranging from 6 months to over one year. Therefore, it is not yet clear how long it will take applicants to receive their licenses when a new application window opens.

Where Can You Locate a Cannabis Dispensary in Nevada?

Per Nevada law, dispensaries may only be situated in permitted zoning districts and must comply with specific distance requirements from certain locations. Typically, dispensaries are allowed in commercial and industrial zones. Also, per Nevada law, marijuana dispensaries may not be located within 1,000 feet of any school or 300 feet of a community facility. For specific locations where a marijuana retail store may be located, research the local zoning laws and requirements in the municipality where you intend to establish your business.

Here is a list of cannabis dispensaries in Nevada.

Can Licensees Have More Than One Dispensary Location in Nevada?

Yes, Nevada permits dispensaries to operate in more than one location in the state. Some licensed medical and recreational marijuana dispensaries have multiple locations in Nevada.

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

Opening and running a dispensary requires a lot of capital. Firstly, you must submit a $5,000 application fee and a $20,000 retail license fee with your application to the Department of Taxation. In addition, obtaining a local business license may cost $1,500 or more, depending on the municipality.

The initial capital requirements for establishing a dispensary can fluctuate, contingent upon factors such as location, scale, and the extent of operations. On average, the startup expenses for a dispensary in Nevada typically span from $250,000 to over $1 million. These costs cover various facets, including facility renovation, security systems installation, equipment acquisition, initial inventory procurement, marketing initiatives, licensing fees, legal consultations, and staff recruitment and training.

Also, there are monthly or periodic operational outlays, such as mortgage or rent costs, utility bills, salaries, insurance premiums, security system maintenance, inventory restocking, marketing and promotional expenditures, regulatory compliance expenses, and professional services legal fees. The recurring costs may fluctuate depending on the dispensary's scope or size of operations.

Furthermore, Nevada-based dispensaries are required to remit taxes to appropriate state and local agencies. There is a 10% tax retail excise tax on recreational cannabis. Other local taxes may apply to cannabis sales, depending on the municipality regulations.

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

The Nevada Cannabis Compliance Board does not currently require specific insurance policies for dispensaries in the state. However, due to the risky nature of cannabis businesses, it is recommended that you carry some insurance policies for your dispensaries. The recommended policies include:

• Workers' Compensation Insurance: All employers in the state of Nevada are required to have workers' compensation insurance. This insurance policy covers the cost of medical treatment and lost wages for employees who suffer workplace injuries and occupational diseases
• General Liability Insurance: This insurance coverage is designed to protect dispensary owners from various liability risks and potential financial losses. It provides coverage for claims and lawsuits that may arise from third parties due to injuries or property damage that occur on the dispensary premises or as a result of the dispensary's operations
• Product Liability Insurance: Product liability insurance can help a dispensary protect its reputation. Product liability insurance covers costs related to injuries or damages arising from using a product sold at the dispensary. The policy can also help cover the costs of defending the dispensary in court
• Commercial Property Liability Insurance: Commercial property insurance provides essential coverage for your dispensary in cases of damage or loss stemming from occurrences like fires, severe weather events, theft, or vandalism

How to Get a Grant to Open a Dispensary in Nevada

Cannabis remains illegal at the federal level in the United States due to its classification as a Schedule I controlled substance. Hence, with traditional banks operating under federal regulations, obtaining loans for cannabis dispensary startups is challenging. However, there are alternative routes to access funds to open a dispensary, such as:

• Private Lenders and Investors: Unlike conventional financial institutions, some private lenders and individual investors may be open to financing dispensary startups. While they often demand a share of profits in return, they can provide valuable capital to get your business off the ground
• Cannabis-Specific Lenders: Some financial institutions specialize in serving the cannabis industry. These lenders are more familiar with the challenges and regulations of the sector, making them more willing to extend loans to dispensaries or cannabis startups
• Venture Capital and Private Equity: Cannabis-focused venture capital firms and private equity investors can offer substantial funding for your dispensary. They typically seek equity participation and can provide not only financial support but also valuable industry expertise
• Community Banks and Credit Unions: Some smaller banks and credit unions operate locally and may be more open to working with cannabis businesses due to their community-focused approach. These institutions can be more flexible in providing loans or financial services
• Crowdfunding: Crowdfunding platforms, including equity crowdfunding, offer opportunities to raise capital from a diverse group of investors. Rewards-based crowdfunding can provide funds in exchange for non-equity incentives, while equity crowdfunding allows backers to invest in your dispensary
• Self-Funding: Leveraging personal savings, assets, or retirement funds is another option to secure initial capital. However, this involves personal financial risk
• Family Members and Friends: You may reach out to close family members and friends who may be interested in investing in your dispensary venture. These individuals can provide financial support and may be more willing to take on the risks associated with the cannabis industry

Does Nevada Have a Social Equity Program for Cannabis Dispensaries?

Nevada does not have a social equity program for cannabis dispensaries. However, the state has a social equity program for individuals looking to obtain independent cannabis consumption lounge licenses.

Does Nevada Tax Marijuana Dispensaries?

In accordance with Nevada law, cannabis dispensaries in the state are required to charge a 10% retail excise tax on the sale price for adult-use cannabis but not on medical cannabis sales. The state permits local jurisdictions to charge additional taxes. State-imposed tax on cannabis is remitted to the Nevada Department of Taxation.