How to Open a Dispensary in Rhode Island (The 2022 Guide)

Overview

Are you interested in learning more about how to open a dispensary in Rhode Island? On this page, we will keep you up to date on the most recent news and information pertaining to starting a cannabis business in Rhode Island. This page contains valuable insights about what is to come in the following few months.

On May 25th, 2022, Rhode Island legalized marijuana, making it the nineteenth state to do so. Governor Dan McKee gave the Rhode Island Cannabis Act his signature, making it a law and so legalizing and securely regulating adult recreational use of cannabis in the state. 

The Act provides provisions for the automatic expungement of any previous penalties related to marijuana possession. McKee said that the legislation was “equitable, controlled, and safe,” while at the same time building a regulatory structure that places an emphasis on the health and safety of the general public. 

The new legislation provides for a maximum of 33 retail licenses to be dispersed throughout six zones around the state, including the state’s three current medical cannabis dispensaries and the six recently awarded compassion centers in different stages of planning. Who gets the 24 other retail licenses and when will be up to a governor-appointed cannabis control commission. The start of in-store sales may happen as early as December 1st. 

The Opportunity Size

According to Gov. McKee’s fiscal analysis, Rhode Island could generate marijuana tax revenue of $1.7 million in the fiscal year of 2022 and grow to $16.9 million by 2023.

Numbers from Statistica.com show that marijuana sales in Rhode Island will reach approximately 167.6 million U.S. dollars by 2025. With a population size expected to reach about 1.1 million in 2021, it’s apparent the state will be a great market to start a cannabis business.

Local Cannabis Restrictions & Laws

In Rhode Island, some municipalities do not permit cannabis anywhere. Others enable it only under particular conditions, such as requiring a special use permit in certain circumstances.

The Rhode Island League of Cities and Towns released a statement in April 2021 about proposals for adult-use marijuana legalization. According to the group, cities and municipalities should be able to opt out through their local councils instead of a ballot referendum.

Newport City expressed a desire to have the authority to prohibit adult-use marijuana sales in the city. Meanwhile, Middletown is prepared to take steps to prevent marijuana dispensary sales. The Middletown Town Council would ban compassion centers and retail marijuana stores while allowing cultivation centers and testing providers in some areas of town. It will also enable caretakers and patients to grow cannabis.

Providence, Warwick, and Portsmouth are the municipalities that are now hosting medical marijuana dispensaries, and they will not have the option to opt out of the program. Other localities, though, will have the opportunity to do so via a referendum vote in November 2022.

In this section, we’ll keep you up to date on all important changes in Rhode Island’s 39 municipalities, including their respective positions, limits, and outright prohibitions on recreational cannabis.

Medical Marijuana

In 2006, Rhode Island became the eleventh state to legalize medical marijuana. The Edward O. Hawkins and Thomas C. Slater Medical Marijuana Act were passed in 2005, with a 52-10 vote in the state House and a 33-1 vote in the state Senate. In-state patients possessing a Rhode Island registry ID card can consume, possess, and cultivate cannabis. Registered patients are allowed to possess up to 2.5 ounces of usable cannabis and grow up to 12 plants. The full text of the bill can be viewed here.

An individual may be eligible to register as a medical marijuana patient if he or she suffers from a qualifying debilitating condition such as cancer, glaucoma, or HIV. You may check the full list of approved conditions by visiting this website

According to a Medical Marijuana  Program Report presented to the Rhode Island General Assembly, there were 19,463 active registered patients, 656 active registered caregivers, and 682 active authorized purchasers in the state as of June 30, 2021. 

Medical Marijuana Dispensary and Cannabis Business Opportunities

There are three types of cannabis business licenses issued in Rhode Island:

Licensed Compassion Centers — Permitted to sell to qualified patients and caregivers. Possession is restricted to what is cultivated in their facility and acquired from cultivators.

Licensed Cultivators — Permitted to supply only to Compassion Centers. Possession is restricted by the class of their license as well as by the demand in the market.

Licensed Cooperative cultivations — Patients or caregivers cultivate plants together.

Compassion centers, cultivators, and cooperative cultivations are all subject to licensing and regulatory oversight by the Department of Business Regulation (DBR) Office of Cannabis Regulation, which is also in charge of overseeing medical marijuana plant tagging requirements under the Edward O. Hawkins and Thomas C. Slater Medical Marijuana Act.

Medical Cannabis Dispensary Application Fee and Guidelines

In addition to the registration materials, applicants for a Medical Marijuana Dispensary License must provide:

Compassion center 

  • $10,000 non-refundable application fee
  • $500,000 annual license fee

Cultivator

  • $5000 non-refundable application fee
  • Micro-license, 0 – 2,500 sq. ft., $5,000; Class A, 0 – 5000 sq. ft., $20,000; Class B, 5,001 – 10,000 sq. ft., $35,000; Class C, 10,001 – 15,000 sq. ft., $50,000; Class D, 15,001 – 20,000 sq. ft., $80,000 annual license fees

Cooperative Cultivator

  • $50 non-refundable application fee
  • $500 annual license fee

 

You may find a thorough list of Rules and Regulations related to the Medical Marijuana Program in Rhode Island here. At this time, however, no new applications for medicinal marijuana business licenses are being accepted.

Recreational Use Legalization

On March 1st, 2022, Sen. Josh Miller and Rep. Scott Slater submitted a pair of proposals (2022-S 2430, 2022-H 7593), which were identical to one another, in order to legalize cannabis for individuals over the age of 21 in Rhode Island. In May of 2022, the General Assembly approved an ammended version of the legislation, which then went on to be signed into law by Governor Dan McKee.

On May 25th, 2022, the state of Rhode Island became the 19th state to legalize adult-use cannabis, as stated above. After a 32-6 Senate vote and a 55-16 House vote, Gov. Dan McKee signed the Rhode Island Cannabis Act to legalize, regulate, and tax cannabis. You may read the whole text of the legislation here.

Who is responsible for the regulation of Cannabis in Rhode Island?

  • Cannabis control commission – A three-person cannabis control commission will be chosen by the governor. This group will be in charge of regulating the cannabis industry and giving out licenses. The commission will now be in charge of regulating the medical cannabis program.
  • Cannabis advisory board – Eleven voting members and eight non-voting members will serve on a cannabis advisory board, which will make recommendations to the state’s cannabis control commission. There will be five subcommittees within the board that will be comprised of professionals in the fields of cannabis industry, public health, public safety, minority and veteran-owned company involvement, social equity, local agriculture, and growing cooperatives.           
  • Cannabis office – The office for regulating cannabis that is already part of the Department of Business Regulation will now be called the cannabis office. The cannabis control commission will give the cannabis office duties and tasks related to daily monitoring, and enforcement of operational, procedural, and administrative aspects.

Recreational Cannabis License Types

The Act creates a variety of licensing categories, which are provided below.

  • Cannabis Cultivator Licenses
  • Cannabis Product Manufacturer Licenses
  • Hybrid Cannabis Retailer Licenses
  • Cannabis Retailer Licenses
  • Cannabis Testing Laboratory Licenses

After the date of issue, each license is valid for a period of one year, and renewals are granted within a period of thirty days upon receipt of a renewal application and fee from licensees who are in good standing.

Recreational Use/Adult Use Dispensary Licensing

Minimum Requirements: 

To open a dispensary in the state of Rhode Island, candidates must be Rhode Island residents, be at least 21 years old, pass a background check, show that the planned retail site conforms with local zoning and rules or has municipal approval, and pay a nonrefundable application fee, among other things.

How much does it cost to open a dispensary in Rhode Island?

Hybrid Cannabis Retailer Licenses

Application Fee: The cost to opening a hybrid cannabis dispensary business in Rhode Island includes a $125,000 application fee.

Existing medical cannabis compassion centers, which are also referred to as licensed medical cannabis dispensers, will be eligible to apply for a hybrid license beginning on August 1, 2022, in order to do business in the adult-use market.

Cannabis Retailer Licenses

Annual Fee: The cost of opening a dispensary in Rhode Island includes a thirty thousand dollar ($30,000) annual fee. This fee is to be deposited in the social equity fund prior to the issuance of a cannabis dispensary license and for any period during which the license is renewed. 

Applicants seeking social equity license will be eligible for help in the form of fee exemptions, grants, and technical support.

In addition to hybrid retailers, the commission is authorized to provide licenses to a total of 24 more cannabis dispensaries. The retail licenses are going to be handed out in accordance with the geographic zones. Within each geographical zone, there may be no more than four (4) retail licenses. One of the 4 retail licenses should be designated for a workers’ cooperative applicant and one for a social equity applicant. 

As the state’s cannabis program develops, we will keep you updated on all relevant news and legislation affecting the opening of a dispensary in Rhode Island. By subscribing to our Rhode Island Cannabis Mailing List (Below), we will keep you informed of all important news and comments pertaining to Rhode Island Legalization. This includes, but is not limited to, the following:

  • What is the cost of opening a dispensary in Rhode Island?
  • What are the requirements for obtaining a license to operate a marijuana company and opening a dispensary in Rhode Island?
  • What special programs will be offered?
  • And more

 

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