How to open a dispensary in Washington

Overview

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

Using cannabis in Washington is legal for medical and recreational purposes for anybody over the age of 21. On December 6th, 2012, Washington State joined Colorado to become the second state to legalize recreational marijuana and first state to approve marijuana sales.Washington was one of the pioneer states of medical marijuana legalization being one of the first to legalize in 1998.

An emergency rule proposal was approved by the Washington State Liquor and Cannabis Board on March 29, 2023, to prolong the period for accepting applications for social equity in cannabis (SEIC) retail licenses until April 27, 2023. The extension was necessary because of delays in processing business entity applications by the Secretary of State’s office, which have restricted the state’s capacity to review fresh SEIC applicants.

On May 1st, 2023, Governor Jay Inslee of Washington signed a law aimed at promoting social equity in the state’s legal marijuana program by granting up to 52 new cannabis retailer licenses between 2024 and 2032. The Liquor and Cannabis Board will issue the licenses to those who qualify for the social equity program, including individuals with at least 51% ownership and control by residents of a designated impacted area, those with a history of cannabis or drug offense convictions, or their family members. The law also exempts annual fees and reimburses fees to current licensees who submit a social equity plan. 

How big is the opportunity?

According to projections made in the MJBizFactbook, sales of cannabis for adult use via retail outlets are expected to grow by about 50% to a range of $2.3 billion and $2.5 billion by the year 2025.

Local Cannabis Restrictions and Laws

When considering opening a marijuana dispensary in Washington, it is crucial to first verify with local authorities if it is legal to do so in your desired location. The laws and regulations regarding cannabis companies vary by city and county. Some have implemented complete bans, while others allow cannabis companies in specific areas. Consult this statewide map with ordinance links to determine the jurisdictions that permit or prohibit cannabis companies.

Medical Marijuana Legalization

Initiative 692, also known as the Medical Use of Marijuana Act of 1998, was the ballot measure that ultimately led to the approval of marijuana for medical use in the state of Washington. Under the initiative, patients who suffered from certain severe ailments, terminal illnesses, or uncontrollable pain were eligible to consume medicinal marijuana. I-692 also gave eligible patients and their caregivers the legal right to own and use medical marijuana.

The program for medicinal marijuana is administered by the Department of Health. Only cannabis patients who are in possession of medical marijuana identification cards are exempt from sales and use taxes and are permitted to buy larger amounts than recreational consumers.

Recreational Use Legalization

Washington state voters passed Initiative 502 in 2012, also known as the Washington Marijuana Legalization and Regulation Initiative, with 55% of the vote. This initiative allowed for adult use of marijuana for those 21 and over and set up a regulatory system for the cannabis industry. 

Companies with the necessary cannabis licenses, which are granted, monitored, and enforced by the Washington State Liquor and Cannabis Board (WSLCB), are permitted to grow, process, and sell recreational cannabis.

Washington Cannabis Business Opportunities

You will be required to obtain a cannabis license if your prospective cannabis business will be engaged in the cultivation, processing, or sale of cannabis in any capacity.

Cannabis License Types and Fees

Cannabis Producer License

• A producer licensee is allowed to grow, harvest, and package cannabis into lots, which can then be sold wholesale to cannabis processor licensees and other cannabis producer licensees.
• License fee: $1,381
• Applications for cannabis producer licenses in Washington are not being accepted at this time.

Cannabis Processor License

• A processor licensee is allowed to process, package, and label usable cannabis, cannabis concentrates, and goods made with cannabis in order to sell them wholesale to cannabis retailers and other processors.
• License fee: $1,381
• Applications for cannabis processor licenses in Washington are not being accepted at this time.

Cannabis Retailer License

• A retailer license provides the licensee with the authority to sell only usable cannabis, cannabis concentrates, cannabis-infused items, cannabis accessories, and lockable boxes to store cannabis at retail to customers who are at least 21 years old.
• License fee: $1,381

• Applications for cannabis retailer licenses through the social equity program in Washington will start on Mar. 1, 2023.

Cannabis Transportation License

• A transportation licensee is allowed to transport or deliver cannabis, cannabis concentrates, and items made with cannabis from one licensed cannabis business in Washington State to another licensed cannabis business in the state.
• License fee: $1,300; application fee: $250

Cannabis Research License

• The holder of a research license is granted permission to cultivate, process, and possess cannabis for the purposes of limited research. 
• License fee: $1,300; application fee: $250

Cannabis Dispensary License Application

In 2012, Initiative 502 legalized the possession of up to 1 ounce (28 g) of marijuana for adults on December 6th. However, the cultivation, sale, and gifting of marijuana remained illegal at that time. In 2013, the state started accepting applications for marijuana-related businesses, such as growers, processors, and retail outlets. The Liquor Control Board aimed to allow 334 retail stores and 190,000 square meters of growing space across the state. The first recreational cannabis stores opened to the public on July 8th, 2014 and as of January 2023, there are 467 licensed cannabis dispensaries in total.

I-502 did not address the disproportionate impact that enforcement of cannabis laws had on certain populations and communities. The LCB acknowledges that the enforcement of cannabis prohibition laws was heavily skewed for many years, and the effects of this enforcement persist today. In response, the LCB created the Social Equity program and the Social Equity in Cannabis Task Force in 2020 through agency-requested legislation, with the goal of offering a limited number of cannabis retail licenses to those who were disproportionately affected by the enforcement of cannabis prohibition laws.

On November 12th, 2022, the WSLCB approved social equity licensing rules for cannabis licensees, which include eligibility criteria and application evaluation standards aimed at benefiting those who have been disproportionately impacted by the war on drugs. The WSLCB has also created a Disproportionately Impacted Area Lookup Tool to assist social equity applicants in gathering the necessary information for their applications. 

Starting March 1st, 2023, the WSLCB will begin accepting applications for the Social Equity Program, with over 40 licenses available in different regions throughout the state. 

The application window will only be open for 30 days, during which applicants must submit a fully completed application. It is highly recommended to submit the application as soon as possible within the 30-day period.

Social Equity Dispensary License Application Requirements

Social equity refers to policies that aim to address historical and ongoing marginalization of certain groups by allocating and prioritizing resources to them. To be eligible for the social equity program in Washington state, an applicant must meet the following criteria:

• At least 51% of the applicant must be owned by a person or persons who have lived in Washington state in the past six months or currently reside there, and who meet two of the following requirements:
  • Resided in a Washington state disproportionately affected area for at least five years between 1980 and 2010 as determined by a map.
  • Applicant or immediate family member was arrested or convicted for a cannabis-related crime.
  • Household income is lower than the median household income in Washington state ($82,400). 

Applications will be evaluated using an established rubric.

Final Thoughts 

Stay informed on the latest news and updates regarding opening a dispensary in Washington by subscribing to our Washington Cannabis Mailing List. You’ll receive valuable information on the latest developments in cannabis legalization, including new programs and more. 

If you’re considering entering the cannabis industry, let Cannaspire guide you through the process. With expertise in obtaining licenses and running successful dispensaries, we can help you succeed in this rapidly growing industry. Schedule a consultation call now and don’t go it alone.