Dispensaries play an important role in providing access to cannabis. While medical cannabis has been legally available in many states for quite some time now, recreational dispensaries play a crucial role in offering cannabis to the general public in a safe and regulated way.
In recent years, cannabis dispensaries have become increasingly popular across the United States and even the globe, offering top selling products such as cannabis flower, edibles and concentrates.
While each product brings in varying levels of revenue, cannabis continues to remain the number one fastest growing industry.
For those thinking about opening a dispensary of their own, the first question on many entrepreneurs’ minds is the return on investment (ROI).
States like California, Colorado, Washington, and Nevada have all seen great success with their dispensaries, but each state has different laws, license caps, and regulations that impact their revenue streams.
How Much Money do Cannabis Dispensaries Make?
Consumers view shopping at a dispensary to be more approachable, convenient, and safer than purchasing cannabis from an unlicensed source.
Dispensaries typically have set hours of operation and are located in commercial areas, making them easy to access.
With more and more states legalizing the use of recreational and medicinal cannabis, it’s no wonder that these businesses are taking in noticeable amounts of cash.
The average cannabis dispensary has the potential to make anywhere from $1M – $4M annually.
According to a study by Projection Hub, they’ve determined each dispensary has the potential to make $974/per-square foot.
While shopping at a licensed dispensary ensures consumers that they’re purchasing legal and safe cannabis, dispensaries are required to follow strict regulations to remain compliant.
These types of regulations, including tax regulations such as 280 E, significantly cut into a dispensaries profitability.
Owning a Dispensary in Colorado
Colorado established itself as one of the first states to of legalized recreational cannabis.
By creating a regulated market, Colorado’s Department of Revenue reported the states annual cannabis sales at $139M for 2022.
This upward trend shows both the legal acceptance and increased patronage over the years since its initial legalization.
As of 2022, there were 572 licensed dispensaries within the state, making the average income for a Colorado dispensary around $250,000 per year.
Selling Weed in Washington
Dispensaries in Washington have become a viable source of revenue for many.
While state sales declined in 2021, the fact remains that this is still a thriving industry.
In a state where the retail license caps off at 556, the State Treasurer reported a tax revenue of $515.2M for 2022.
The taxation of cannabis products falls at 37% for the state, which puts annual state sales at around $1.3Billion.
Given the number of licenses, the average income for a Washington pot shop is $2.5Million.
Serving Cannabis in California
In California, the legalization of cannabis has made a huge impact on the economy. This lucrative industry is helping to drive both economic development and the much needed tax revenue gains for the state.
California places a 15% sales tax on cannabis items, which generated the state a reported $817M in 2022.
Of the estimated $5.4B in state sales amongst the 12,221 license holders, the average dispensary in California is looking at an annual revenue of $445,680 per-year.
Operating in Nevada
Amongst the many great things Nevada has to offer, dispensaries have become a popular destination for visitors to stock up on their travel supplies.
As of 2019, Nevada had only issued 60 retail licenses.
In 2021, the state reported $1,003,467,665 in taxable sales income from the industry.
Operating a dispensary in Nevada, especially in Clark County where Las Vegas is, stands to earn an average $16M per-year.
The highest grossing cannabis store, Planet 13, earned an impressive $66 million in 2021 alone.
There is a huge potential for profit in a dispensary business. Moreover, many have reported strong sales growth since they opened their doors to the public.
The actual revenue generated by individual dispensaries can vary. Some smaller businesses earn tens of thousands of dollars per month. Larger dispensaries in more affluent areas may stand to generate millions of dollars in revenue annually.
The amount of money a cannabis store makes can vary significantly depending on a number of factors. The location, size of the business, and local regulations all play a role with the annual revenue.
Customer service and trust are also driving factors in a dispensaries success. Staff are often knowledgeable and friendly people that customers can count on when inquiring about various products.
Other factors such as competition, pricing, marketing, and supply chain management also impact a dispensary’s revenue and profitability.
When consumers shop at a licensed dispensary, they’re actively supporting the legal cannabis industry. This support helps to promote the growth of a regulated and safe market so everyone can have access to cannabis.
They really tried to make it sound good. They touched in 280E but not how you could end up easily owing more in federal taxes then you have profit. Interesting they left out the 3rd state to legalize, Oregon. With approximately 830 retail licenses in a state of 4 million people, the numbers are not good. There licensing regulator OLCC never cared about market saturation only collecting licensing fees. And they just kept making rules they didn’t enforce, only costing the propel trying to run a legitimate business. Because if your blackmarket or a licensed store but not spending the money on compliance your making more. The governor did just fire the former director, so hopefully they will get someone that tries.
Dispensaries appear NOT to be assets because they can be opened in closed in a matter of a few days or in several hours 🙂
Please help END VACCINE ADDICTION with WHOLE PLANT botanical medicines 🙂 “Chemical free” to the best of our abilities and without punishing ourselves please 🙂
Guess what? The design of your retail dispensary plays a HUGE part in those profits. A poorly designed store will not appeal to customers, function properly and can set off compliance red flags.
This is why it is important to hire a dispensary specific interior designer from the beginning! You will get the post ROI when you hire professionals who get your brand voice and target customer.