How Much Does a Dispensary Owner Make?
Owning a dispensary can be profitable if you navigate regulations and compete well. The average dispensary owner salary is $250k-$500k per year. Dispensaries are mostly profitable, with sales up to $10 million. Profitability depends on taxes, transactions, location, and operating costs. The best dispensaries offer competitive pricing to attract more customers and revenue. By growing their own marijuana, dispensaries can increase profits over time.
Do Dispensary Owners Make a Lot of Money?
As per an MJBizDaily survey, the average dispensary owner salary ranges between $250k and $500k per year. Many dispensary owners pay themselves an annual salary of about 10% or more of their dispensary revenue. Location is one of the primary determinants of dispensary owners’ earnings. Dispensaries situated in high-traffic areas and near tourist destinations tend to generate more sales and profits than those located in residential areas or rural regions.
Average Profit and Success Rate
The average profit dispensary owners can expect is around $1.8 million per year. Profit margin varies between dispensaries. Nearly 90% of operating dispensaries, wholesalers, cultivations, and infused product companies have reported being immensely profitable. In 2016, people in the United States spent an estimated $6.7 billion on legal cannabis.
Entrepreneur Gary Cohen says that the average profit margin for a dispensary is between 15% and 21% after taxes. The owner of a dispensary with annual revenue of $5 million or more could expect to make a salary of $500,000 per year — or more.
Cheapest States to Open a Dispensary
Oregon is known as the cheapest state to open a dispensary. Dispensaries can make between $1 million and $4 million, pocketing $100,000 to $1.2 million in annual profit. Oklahoma is another cheaper state to open a dispensary, with a licensing fee of $2,500 and initial operational costs ranging from $80,000 to $150,000. Massachusetts has an application fee to open a dispensary of $1,500, an annual licensing fee of $10,000, and sales have grossed over $3 billion since November 2018. Alaska is among the cheapest states to open a dispensary, with a favorable legal and licensing environment but a high excise tax rate.
Arizona and New York are growing markets with plenty of opportunities for entrepreneurs to start a cannabis business, while Washington is anticipated to be one of the biggest markets in the country.
Opening a Dispensary in 2023
To open a dispensary in 2023, choose a state where marijuana is legalized, which includes 37 states in some capacity. Check if the chosen locale allows dispensaries, consider the size of the population to support your business, and assess the cost of doing business in that state.
Retail cannabis profit margins hover around 15 percent, with additional research indicating a range of 12 to 15 percent. Washington state has 660 dispensaries statewide despite having a 17% excise tax on retail sales, which is the second-highest in the country.
Steps to Starting a Cannabusiness
- Write a business plan.
- Analyze the company team, industry, main competitors, and target market.
Easiest states to open a dispensary include Washington and Oregon, which are favorable for multi-state operators looking to expand their cannabis business. South Dakota, on the other hand, is more complicated and costly to open a dispensary, with a $5,000 application fee and additional fees at the county level.