Ohio has legalized recreational cannabis. Click HERE to learn more about cannabis business opportunities in Ohio.

How Much Do Dispensary Owners Make?

If you’re interested in the cannabis industry and are considering opening a dispensary, one of the first questions you might have is “How much do dispensary owners make?” The answer is not as simple as a dollar amount, as there is a multitude of factors that can impact a dispensary’s bottom line. 

This article will explore the financial elements of operating a dispensary and offer an outline of the factors that affect a dispensary owner’s earnings. Whether you are just starting out or have been in the field for some time, this article will give you vital financial insights into the cannabis market.

To comprehend how much a dispensary owner earns (and how much you may earn), it is necessary to first understand a dispensary’s revenue and expenses.

How Much Revenue Does a Dispensary Generate?

The amount of revenue generated by a dispensary can be influenced by various factors such as location, competition, product range, and marketing strategies. 

Data from the Marijuana Business Factbook, published by MMJ Business Daily, shows that most surveyed dispensary owners, approximately 60%, reported revenues of $500,000 or less. Among the respondents, 27% reported sales ranging from $100,000 to $250,000, while 15% earned less than $100,000 annually. Conversely, over a quarter of the surveyed dispensaries reported yearly revenues of over $1 million, with an additional 15% earning between $500,000 and $1 million.

How Much Does It Cost to Start and Operate a Dispensary?

The costs associated with starting and running a dispensary can be substantial. These costs can quickly add up and eat into the profits of the business, making it important for dispensary owners to carefully manage their finances.

Dispensary Startup Cost Estimates

Most dispensaries require a startup cost ranging from $150,000 to $2 million.

Regarding construction and design, small dispensaries’ build-out costs are between $350,000 and $500,000, mid-sized dispensaries are between $500,000 and $750,000, and large dispensaries cost over $750,000. Renovating an existing building may cost anywhere from $350,000 to $1 million.

Real estate costs for buying a property can range from $128 to $393 per square foot, while leasing costs can range from $3,500 to over $10,000 per month.

For capital requirements, each state has its own capital requirements for opening a dispensary. For instance, in Pennsylvania, opening a medical marijuana dispensary requires having $150,000 in capital, while other states don’t have any such requirements.

Application fees for obtaining a dispensary license can range from $2,500 to $5,000 depending on the state and whether you qualify for the state’s social equity program. The licensing process can be lengthy and expensive with thorough background checks and licensing fees costing at least $5,000.

Dispensary Operating Cost Estimates

On average, running a dispensary can cost around $1.92 million annually. Based on this scenario, a yearly operating budget of just under $2 million, or about two-thirds of the expected annual income, may be necessary to achieve profitability.

The expenses involved in running a dispensary include the cost of cannabis products, which can vary considerably based on factors like quality, product type, and growing method, among others. In states where vertical integration is allowed, it can cost over $500 per pound to cultivate your own cannabis, along with expenses associated with stocking up on edibles, topicals, and other items.

Additionally, employee wages and training for a team of budtenders, store managers, and security personnel can cost upwards of $250,000 per year at standard industry rates of $10 to $20 per hour. Third-party vendors and inventory can add up to $25,000+, excluding inventory costs, as well as the expenses for the security systems, armed guards, and integrated point-of-sale systems required to keep your dispensary functioning.

Marketing is another significant expense. While local advertising is feasible, successful brands often allocate $10,000 to $25,000 per month toward marketing, advertising, and public relations. 

For more comprehensive information, you can read our separate guide: How Much Does It Cost to Open a Dispensary?

Factors that Affect Dispensary Owner Earnings

Dispensary owner earnings can vary greatly depending on a number of factors. It is important for dispensary owners to consider these factors to maximize their profits and stay competitive in the industry.


The earnings of dispensary owners can be significantly influenced by their location, with the accessibility of a dispensary to customers having a direct impact on its sales volume. Dispensaries situated in densely populated urban areas with high foot traffic are likely to generate more revenue compared to those located in remote or rural areas. 

Moreover, a dispensary’s earnings can also be affected by local regulations and laws concerning the sale of cannabis products, which can vary depending on the location. States with high tax rates on cannabis products can potentially decrease a dispensary’s profitability, while states with more lenient regulations may offer a broader range of products and services that can increase earnings. Reports have revealed that Arizona and Maine have recorded the highest revenues from medical marijuana sales among all US states.


A dispensary’s ability to attract and retain customers, as well as its pricing power, can be influenced by the level of competition in the cannabis industry. When operating in highly competitive markets like California, Colorado, and Oregon, dispensaries may need to offer a wider selection of products or lower prices to remain competitive, which could have an impact on their profitability. Conversely, in less competitive markets, dispensaries may have more flexibility in setting their prices and enjoy greater pricing power. 

The level of competition can also affect a dispensary’s marketing and advertising strategies as well as its investment in technology and other resources to stay competitive. Dispensary owners operating in highly competitive markets need to differentiate their brands and offer high-quality products to maintain a competitive edge and achieve significant profits.

Business Size and Scale

David Fettner, a managing partner at Grow America Builders, suggests that newly established dispensaries in states like West Virginia have a smaller size of 900 to 1,200 square feet, whereas the ideal size for more established states, such as Illinois and New Jersey, is around 4,200 square feet. Dispensaries generate nearly $1000 in revenue per square foot of retail space, according to the MJBizDaily Factbook.

A dispensary’s revenue potential is likely to increase with a broader range of products and services and multiple locations, while smaller dispensaries may benefit from a more personalized and intimate relationship with customers, leading to increased loyalty and repeat business. Larger dispensaries may also benefit from economies of scale, resulting in lower costs for sourcing products and marketing and increasing profitability.

Dispensary owners must carefully evaluate the benefits and drawbacks of different business models to grow and expand their operations since the size and scale of a dispensary can have a significant impact on its earnings.

Industry Growth Projections

To gauge potential earnings, it’s crucial to consider the industry’s growth trends and expected demand in the near future. The cannabis sector has witnessed significant expansion lately, resulting in a positive impact on dispensary owners across the country. 

As per the MJBizDaily Factbook 2022, there is an anticipated surge in cannabis retail sales in the US, with a projected increase of nearly 50% from 2021 to 2023, bringing the estimated value to about $40 billion. This expansion is expected to persist, especially with the launch of big adult-use markets such as New York.

Financial experts on Wall Street estimate that the industry could be worth $100 billion by 2030, owing to the growing consumer demand and new legal markets that are emerging every year. This possibility appears highly plausible.

The increase in sales has resulted in enhanced profits for dispensary owners. With the continued increase in demand for cannabis products, many dispensary owners have been able to broaden their operations, recruit additional personnel, and invest in new equipment and technologies.

How Much Does a Dispensary Owner Make?

So, with these factors in mind, how much does a dispensary owner really make?

After you have gotten a sense of how much revenue potential you might have in your situation, as well as your startup requirements, debt obligations, and potential operating costs, you should have a sense of what is possible in your situation. To help you get an even better understanding of the question, let’s also look at some statistics and research conducted to answer this question directly. 

MJBizDaily reports that, on average, dispensary owners earn between 10% to 20% of their dispensary’s net income, resulting in an annual salary range of $200,000 to $1 million. In addition, in Gary Cohen‘s article, it is stated that a dispensary owner generating over five million in annual revenue can expect to receive an annual salary of $500,000.

Best Practices for Maximizing Earnings 

We have gone through many factors to help you understand the potential earnings of a dispensary but there are still important considerations in terms of best practices to help you become a top earner. Here are a few: 

  1. Stay compliant with regulations: Familiarize yourself with the laws and regulations surrounding the sale and distribution of cannabis products and ensure that your dispensary is operating within the bounds of these regulations. There are countless examples of owners not being vigilant enough leading to very costly mistakes that hurt the owner’s reputation, create fines, and potentially even result in bankruptcy.
  2. Offer high-quality products: Ensure that you are offering the highest quality products to your customers as this will help to build a loyal customer base and increase customer satisfaction.
  3. Implement an efficient inventory management system: Maintaining accurate inventory records and tracking sales data will help you to make informed purchasing decisions, reduce waste, and maximize profits.
  4. Provide excellent customer service: Create a welcoming environment and provide knowledgeable and helpful staff who can assist customers with product recommendations and answer any questions they may have.
  5. Offer promotions and discounts: Regular promotions and discounts can help to increase sales and attract new customers but be sure to keep them manageable and sustainable in the long term.
  6. Diversify your product offerings: Offer a wide range of products, including different strains of cannabis, edibles, topicals, and concentrates, to appeal to a wider customer base.
  7. Ensure your cannabis business has the right cannabis technology strategy, products, and solutions from facility needs to seed-to-sale software.
  8. Continuously evaluate and improve operations: Regularly assess your business processes and make changes where necessary to improve efficiency, reduce costs, and increase profits.
  9. Invest in experienced consultants and specialized professionals who can provide expert guidance and implement best practices in your organization.
  10. Strong commitment to security as breaches can not only result in financial losses, but also damage the reputation of the business and undermine customer trust.


In conclusion, dispensary owners’ incomes might range widely based on several criteria including the location of the business, the size of the dispensary, and the demand for the items sold there. The marijuana market has expanded rapidly in recent years, but it remains a strictly controlled and cutthroat business sector. There is the possibility of huge financial benefits for individuals who are able to overcome these difficulties. Successful dispensary entrepreneurs need an in-depth familiarity with the field and the flexibility to respond quickly to shifting consumer preferences and government laws.



How to Open a Dispensary in Hawaii

How to Open a Dispensary in Hawaii Overview Are you wondering how to open a dispensary in Hawaii? This page offers up-to-date news and essential information crucial for anyone looking

Read More »