How To Open a Dispensary in Alabama

Are you wondering how to open a cannabis dispensary in Alabama? This page is dedicated to keeping you up to date on the latest news and information relevant to opening a cannabis business in Alabama. This includes helpful insights on what is to come next for the state.


Currently, marijuana in Alabama is illegal for recreational use. However, On Monday May 17th, 2021, Alabama Governor Kay Ivey signed into law Senate Bill 46, legalizing medical cannabis. Alabama is now the 37th state to legalize medical marijuana for its citizens.  

Here’s a timeline of what transpired in passing the bill:

  • A limited medical marijuana bill was signed into law by Gov. Robert Bentley in April 2014, SB 174 (Carly’s Law). 
  • The Medical Marijuana Patient Safe Access Act failed to get Senate approval in 2015. Carly’s Law was expanded by Leni’s Law in 2016, allowing CBD oil to be used on a broader range of symptoms, and allowing up to 3% less THC to be present in the oil. 
  • During her tenure as governor of Alabama, Governor Kay Ivey has signed Senate Bill 236 into law to establish a medical marijuana commission.
  • Senator Tim Melson introduced Senate Bill 165, the Compassion Act, on February 11, 2020, after months of study by a medical, legislative, and legal commission.
  • A Senate resolution was passed on March 11, 2020, and SB46 was sent to the House for consideration. However, the bill was not moved until the legislative session ended on May 18, 2020, due to the coronavirus pandemic.
  • The medical cannabis law was reintroduced by Sen. Tim Melson in 2021 as SB 46 and was recently passed as law.

With the newly signed law, patients with 16 qualifying medical conditions would be allowed to buy medical marijuana with the doctor’s recommendation and an identification card. Currently these qualifying medical conditions include: chronic pain, vomiting or nausea related to cancer, weight loss or nausea related to HIV/AIDS, Crohn’s disease, sickle cell anemia, epilepsy, panic disorder, PTSD, autism and Parkinson’s disease among others.

Opportunity Size

ArcView Market Research/BDS Analytic projects the legal cannabis market in Alabama to be $19.7 million by 2024. Some sources have shown that legalizing cannabis would be beneficial for the state financially. Marijuana legalization is expected to alleviate the damage caused by the criminal justice system and to improve the state’s economy.

The impact on the state for recreational marijuana in particular, would be huge and is reported by the Tax Foundation to be 92,217,856 USD in excise tax revenue. 

Recreational Use Legalization

The Alabama Democrats chair, Rep. Chris England, said that nearly 100 years of prohibiting marijuana have trapped thousands in the criminal justice system of the state because of anti-marijuana laws. He pointed out that nobody should be imprisoned just because of possessing a small amount of marijuana.

Every year, Alabama locks up people for possessing marijuana. Alabama could save this money while also generating hundreds of millions of dollars of tax revenue, thousands of jobs, and opportunities for farmers and entrepreneurs in Alabama when it is legalized.

Wade Perry, Executive Director of Alabama Democrats said that the legalization is becoming popular for the recreational use of cannabis. It has shown a significant shift within the past decade. A recent poll indicates that 70 percent of voters and most people of all demographics and ages favor legalizing marijuana. Jessica Washington stated that bad policies surrounding marijuana have disproportionately affected communities of color. 

During the party’s upcoming conventions, they plan to discuss this issue with legislators, civic leaders, activists, and voters. Among the current initiatives of the Alabama Democrats is to continue spreading information surrounding cannabis legalization. They recently launched a merchandise line, which allows people to wear their support.

Medical Marijuana

As stated above, Alabama has now legalized medical marijuana for its citizens. Cannabis for medical use can be administered as a tablet, capsule, cream, gel or balm. It cannot be smoked, vaporized, baked, or mixed into foods like cookies or candy. Patients who suffer from a debilitating epileptic condition are covered by the law, but home cultivation or a state-controlled dispensary system is illegal under the law.

A database is expected to be set up by the Medical Cannabis Commission to monitor doctor certifications, patient registrations, medical marijuana cards, and dosages among other information. The information may only be accessed by dispensaries, pharmacists, doctors, and law enforcers if investigation is needed.

A patient with a medical cannabis certification should visit only a “Registered Certified Physician”. The certified physician is responsible for entering the patient’s data into the local database, the Alabama Medical Cannabis Patient Registry System. Once the patient is registered successfully, the commission will issue a medical marijuana card that allows the cardholder to avail up to 60 cannabis dosages, and possess 70 daily dosages and below of marijuana.

Local Cannabis Restrictions and Laws

When you are looking to open a cannabis business in Alabama, one of the most important considerations is location. There are particular local municipalities or cities where they have determined to outright ban or restrict marijuana.

As medical marijuana and recreational rules start to change in a state it is very common for towns and municipalities to have their own rules for what is allowed and what is not. One example is Birmingham, which still bans the possession of marijuana. Alabama mayors are permitted by the law to remit fines and commute sentences when needed in the municipal court.

As Alabama’s cities/towns form their own stances on laws whether it’s outright bans or particular restrictions, we will keep you up to date on this section here.

Cannabis Business License Opportunities and Requirements

With the bill, Alabama has set up a Medical Cannabis Commission controlling patient registration and establishing a Medical Cannabis Research Consortium for medical research on cannabis. 

Different medical marijuana license types will be available to applicants according to SB 46. Licenses are granted based on public applications:

  1. Dispensary License means a company is authorized to dispense and sell medical cannabis at dispensing sites to registered physicians and caregivers. A total of four dispensaries are permitted by the state, with three locations located in different counties.
  2. Cultivator License, is a permit to grow cannabis. The state expects to license at least four cultivators.
  3. Processor License, provides the ability to purchase cannabis from a cultivator, extracting derivatives from the cannabis, and then packaging and labeling the product for sale at a dispensary. Only four processors will be licensed by the state.
  4. Secure Transporter License – Using this license, a licensed facility or site can transport cannabis or medical cannabis to another licensed facility or site.
  5. The state testing lab license is the proof the product meets the safety requirements of the act.
  6. Integrated Facility license – This license is a conditional license that allows the licensee to perform the functions of a cultivator, processor, secured transporter, and dispensary. Only five integrated facilities will be licensed.

Taxes and Application Fees

Depending upon the type of license, the commission may decide to establish license fees that are not less than ten thousand dollars ($10,000) nor more than fifty thousand dollars ($50,000).

To cover the costs associated with the background investigation conducted by the commission, a non-refundable application fee of $2,500 shall be paid at the time of filing.

Business license applications will be accepted starting September 1, 2022.

Several events such as those noted above will affect when and how recreational legalization might unfold in Alabama. This page will keep you up to date with all of the latest news regarding how to open a dispensary in Alabama, along with all other relevant information relating to Alabama cannabis legalization. Join our Alabama Cannabis Mailing List

Among the topics included are the following but not limited to

  • How soon will new cannabis license applications be available?
  • What are the latest updates with recreational cannabis legalization in Alabama?
  • Requirements to open a dispensary and other cannabis business in Alabama? 
  • Will there be any special programs available for residents to open their own cannabis business?

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