How to open a dispensary in Texas

Overview 

Are you wondering how to open a dispensary in Texas? This page will keep you updated on the latest news and information about opening a cannabis business in Texas, including helpful insights on what is to come next.

It is against the law in Texas to possess, distribute, produce, cultivate, or sell marijuana for recreational purposes. Patients in the state may participate in a medical marijuana program. However, the law only authorizes the use of low-THC cannabis oil for those patients who suffer from intractable types of epilepsy.

Because there will be no legislature session in 2022, efforts at the state level will concentrate on the 2023 session. Governor Greg Abbott has stated his openness to investigate the possibility of expanding the medicinal program and advocating for the decriminalization of marijuana.

On the local level, residents of several communities turned in signatures to put similar initiatives on the ballots of those cities in November 2022. These communities include Denton, Elgin, Harker Heights, Killen, and San Marcos. These local measures may help generate support for statewide decriminalization in Texas, although Texas does not have a framework for statewide ballot initiatives.

How big is the opportunity? 

According to a special report, more than 1.5 million Texans over the age of 21 partake in cannabis use monthly. Sales of cannabis in the state might reach $2.7 billion annually if it were legalized for adults. More than $1.1 billion in additional state income would be generated every two years if Texas taxed cannabis sales at the identical rate as Colorado. Business licensing costs might bring in an extra $10 million annually. In addition, eliminating minor cannabis possession arrests and prosecutions in Texas may save the state an estimated $311 million annually.

Local Cannabis Restrictions & Laws

According to Section 487.201 of the Texas Health and Safety Code, the authority of local governments in the state of Texas cannot restrict the activities of licensed medical dispensing organizations. Growing, manufacturing, distributing, or even owning low-THC cannabis is not something that local governments may ban.

Even though the use of recreational marijuana remains unlawful in the state of Texas, some counties have taken steps to decriminalize the possession of small quantities of the drug. This is done by issuing tickets or asking users to participate in a four-hour “educational” program about marijuana. Local governments decriminalizing marijuana are Austin, Bexar, Cedar Park, Dallas, El Paso, Harris, Hays, Nueces, Plano, Travis, and Williamson.

On November 8th, 2022, voters in five different cities in Texas supported proposals to decriminalize marijuana on the local level. Voters in  Elgin, Denton, San Marcos, Killeen, and Harker Heights all had the opportunity to cast their votes on the issue, and all of the cannabis propositions that were on the ballots in those cities were successful. 

Medical Marijuana

In June 2015, the Texas Legislature enacted Senate Bill 339, also known as the Texas Compassionate Use Act. This legislation gave organizations the authority to produce, process, and administer low-THC cannabis to patients who met the required criteria. Cannabis with a THC content of no more than 0.5% and a CBD to THC ratio of 20 to 1 was available for purchase by those diagnosed with intractable epilepsy and certified caregivers acting on their behalf.

Patients may only be enrolled with the Compassionate Use Registry of Texas (CURT) if they are permanent residents of the state of Texas. The statute gave the Texas Department of Public Safety (DPS) the responsibility of directing the statewide program for supplying cannabis products to patients who have registered for the program.

Greg Abbott, the governor of Texas, gave his signature to House Bill 3703, which broadened the range of diseases that may be treated with medicinal marijuana. It also abolished the prerequisites of a second physician’s view and a 20-to-1 concentration ratio. However, the law did not change the terms “prescribe” and “prescription,” which may only be used in reference to medications that the FDA has authorized.

Patients in Texas who suffer from amyotrophic lateral sclerosis, autism, cancer, epilepsy, or one of the other qualifying conditions are legally permitted to participate in the Compassionate Use Program.

There are now 36,651 registered medicinal marijuana patients in Texas as of September 2022.

Medical Marijuana Program Opportunities

According to Chapter 487 of the Texas Health and Safety Code, the Department must provide at least three licenses and not exceed the number of licenses required to guarantee appropriate statewide access and availability of low-THC cannabis for patients.

Currently, the DPS is not accepting new applications for dispensing organization licenses. When the program reopens, we will update this section with any further information. You may check out the information below related to opening a dispensary in the state for the time being.

Dispensing organization license application requirements

  • Evidence of ownership and verification of current status
  • Fees for applications
  • Names, birth dates, residences, and any other information requested by the department that is essential to verify the identification of all the applicant’s directors, managers, and employees
  • Disclosure of prior criminal background
  • Complete registration applications
  • Evidence that you have business general liability insurance
  • Evidence of qualifications

You can check the entire list of requirements here.

How much does it cost to open a dispensary in Texas?

The following is a breakdown of some expenses involved with opening a dispensary in Texas.

  • The cost to apply for a license to operate as a dispensing organization is $7,356. A dispensing organization must pay a licensing fee of $488,520 for two (2) years to operate legally.
  • The cost of registering for the first time, as well as registering for subsequent renewals, is $530.
  • The cost of the dispensing organization’s license to be renewed every two years is $318,511.

Recreational Use Legalization

Republicans and Democrats in the Texas House launched efforts during the legislative session of 2021 to reduce the criminal penalties associated with marijuana possession. Some of the proposed legislation would remove the possibility of receiving a prison sentence for the possession of a minor quantity of marijuana and would do away with the practice of automatically suspending drivers’ licenses. Although the House approved several, none of them were ultimately enacted into law.

Both the incumbent Republican governor of Texas, Greg Abbott, and his Democratic challenger, Beto O’Rourke, have stated their support for decriminalizing marijuana, with O’Rourke focusing his campaign on the issue of legalizing the substance.

The Texas Republican Party has stated in its official platform that it favors cannabis being reclassified by the federal government from a Schedule I drug to a Schedule II drug. Schedule I drugs are substances with a high potential for abuse but are not accepted for medical use. Schedule II drugs are substances that have acknowledged medical benefits but still have a significant risk of abuse. Although this modification would allow the use of cannabis as a treatment for medical conditions, cannabis for recreational purposes would still be illegal at the federal level.

The Dallas Morning News and UT Tyler conducted a study in September 2022. They discovered that 67% of Texans are in favor of medicinal cannabis, and 51% are in favor of complete legalization.

We anticipate many new events through 2022 will affect when and what recreational legalization will look like. If you add yourself to our Texas Cannabis Mailing List (below), we will keep you updated on all relevant news and the not-so-easy-to-find information and comments related to Texas Legalization. This includes but is not limited to the following:

  • How much will it cost to open a dispensary in Texas?
  • What are the requirements to get a marijuana business license and open marijuana dispensaries in Texas?
  • What special programs will be available?
  • And more…

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