How to open a cannabis dispensary

How to Open a Dispensary in Minnesota

Learn the exact steps for opening a cannabis dispensary in Minnesota in 2024. Adult use cannabis was legalized in Minnesota in 2023.

If you want to open a cannabis dispensary in Minnesota, the first thing you need to do is learn about the laws in this state around weed. Make sure you understand the rules and any updates so you can follow them once your business is up and running.

It’s important to balance sticking to the rules whilst optimizing your business for full profit and potential, especially when it comes to marketing and promotion. This is because there are often limitations around how you’re allowed to market your dispensary and get new customers within the cannabis industry.

In this blog post, we’ll take you through everything you need to consider if you’re planning to open a cannabis dispensary in Minnesota. We’ll explain the laws, rules, and regulations, and how you can ensure your dispensary adheres to them all.

Minnesota Cannabis ‘Law-Down’ at a Glance

Minnesota legalized adult-use cannabis in 2023 with the passage of HF100 by Governor Walz. Medical cannabis had been legal in MN since 2014, but it was mostly limited to oils, capsules, and other non-smokeable products until 2022 when small amounts of hemp-derived THC were allowed as edibles.

Recreational cannabis use became officially legal for adults 21 and older on August 1st, 2023, making Minnesota the 23rd state in the country to legalize adult use.

Even though it's legal now, adult-use dispensaries probably won’t open until 2025 as regulators set up their new licensing office, the Office of Cannabis Management (OCM) and work out their licensing system and processes. While waiting for more details, you can start by understanding Minnesota’s cannabis laws.

Is Medical Cannabis Legal in Minnesota?

In May 2014, the dispensing, possession, and use of medical cannabis was made legal in Minnesota.

As you’d expect, though, there are limitations around this. Patients who can get access to medical cannabis must have been diagnosed with a condition listed by the Minnesota Department of Health.

Some of the qualifying conditions include:

  • Alzheimer’s disease
  • Irritable Bowel Syndrome (IBS)
  • Post-Traumatic Stress Disorder (PTSD)

Patients must also be 18 or older, to enroll themselves in Minnesota’s medical cannabis program.

The process of getting a medical marijuana card in Minnesota is as follows:

  1. Get a certification for a qualifying condition, from a licensed physician in Minnesota.
  2. Provide an email address to the physician or practitioner during the evaluation.
  3. The Office of Medical Cannabis (OMC) will then send a link to register at the Medical Cannabis Registry, and an email confirmation of certification.
  4. Click the link and follow the steps to enroll.
  5. Once the OMC approves the enrollment, patients will have a Medical Cannabis Registry account.

Start your journey for opening a Cannabis Dispensary in Minnesota

To start a cannabis dispensary in Minnesota, the first few things to do are:

  • Register your business with the state as an LLC or corporation.
  • Get tax ID numbers and open a business bank account at a cannabis-friendly bank.
  • Decide what insurance you need, like liability and property insurance.
  • Make a detailed business plan covering everything from location to staffing.
  • Follow Minnesota's rules for keeping records, reporting diversity, and handling disposal and loss.
  • Find a good location for your dispensary, making sure it's in a city that allows cannabis businesses and follows local rules about where dispensaries can be located.
  • You can get help from real estate professionals and city offices to find the right spot for your dispensary.

The Licenses You’ll Need to Dispense Medical Cannabis in Minnesota

There are 4 types of licenses you can get if you want to dispense medical cannabis in Minnesota.

They are as follows:

  • Medical Cannabis Cultivator: The application fee is $250. There is no initial license fee, and no fee for renewing your license.
  • Medical Cannabis Processor: The application fee is $250. There is no initial license fee, and no fee for renewing your license.
  • Medical Cannabis Retailer: The application fee is $250. There is no initial license fee, and no fee for renewing your license.
  • Medical Cannabis Combination Business: The application fee is $10,000. The initial license fee is $20,000, and the fee for renewing your license is $70,000.

Getting Funding for Your New Dispensary in Minnesota

To secure funding for your new recreational use dispensary in Minnesota, it's essential to plan for various expenses:

Real Estate and Build-Out Costs: This includes expenses for finding and leasing or purchasing a suitable location for your dispensary. You'll also need to budget for initial setup costs such as renovations and ongoing expenses like rent or mortgage payments.

Licensing and Application Fees: These are required to legally operate a dispensary in Minnesota. It's crucial to factor in the initial application fees as well as any renewal fees for maintaining your license.

Operational Expenses: This category encompasses day-to-day costs associated with running your dispensary. Examples include utilities, staffing, marketing, security, insurance, and other general business expenses.

Technology Costs: Investing in hardware, software, security systems, and other technology is essential for efficient dispensary operations. These expenses may include POS systems, inventory management software, surveillance systems, and compliance software.

Staffing Expenses: Budget for salaries, wages, benefits, payroll taxes, and training for your dispensary staff. Adequate staffing is crucial for providing quality customer service and maintaining regulatory compliance.

Inventory Costs: You'll need to purchase cannabis products to stock your dispensary shelves. Consider the cost of sourcing high-quality products, maintaining inventory levels, and managing supply chain logistics.

Taxes: Cannabis businesses are subject to various taxes, including sales tax, excise tax, and federal income tax. It's essential to plan for tax liabilities and set aside funds for quarterly tax payments.

The Rules Around Marketing your Medical Cannabis Dispensary in Minnesota

When it comes to marketing your medical cannabis dispensary in Minnesota, there are a few rules to keep in mind.

For example, you’re not allowed to make false or misleading statements when you’re advertising your medical cannabis products.

In addition, you can’t use colloquial terms like “weed” or “pot” to refer to medical cannabis.

Another rule around advertising your medical cannabis dispensary in Minnesota is, you’re not allowed to have images of cannabis flowers or anything suggestive of recreational marijuana use.

Is Recreational Cannabis Legal in Minnesota?

Recreational cannabis is legal in Minnesota.

The recreational use of cannabis was legalized in the state of Minnesota in 2023, effective on the 1st of August.

However, it can only be used by people over the age of 21, and it can’t be smoked or consumed inside a public place.

In terms of possession, people are allowed to have up to 2 ounces of cannabis flower on them in a public place, and up to 2 pounds in a private residence.

In addition, people aren’t allowed to use recreational cannabis when they’re driving a vehicle or operating heavy machinery.

Also, cannabis can’t be used around some of the following areas:

  • Schools and school buses;
  • Somewhere where cannabis could be inhaled by a minor;
  • On federal property.

Getting a recreational dispensary license in Minnesota

To open a recreational dispensary in Minnesota, you must obtain a license to handle cannabis sales.

As of now, the Office of Cannabis Management hasn't provided details on how to apply or the rules for participating in Minnesota's new adult-use cannabis industry.

The guidelines for legal adult cannabis, including application procedures and timelines, are anticipated to be established in 2024. Keep an eye on the OCM website to remain in the know of latest updates.

Applications for licenses will be available once rules are finalized, likely in early 2025. If you're planning a small operation, you might qualify for a microbusiness license, which has limits on cannabis quantities.

If you've been affected by the war on drugs, you could be eligible for Minnesota's social equity program.

Currently, only Tribal Nations and existing medical marijuana dispensaries can sell cannabis in the state. Retailers can also sell low-potency hemp products but need to register with the state.

The Licenses You’ll Need to Dispense Recreational Cannabis in Minnesota

There are several different licenses you can get to dispense recreational cannabis in Minnesota, depending on what you want your business to do and what exactly you want to sell.

These different licenses include:

  • Cannabis Microbusiness: The application fee for this license is $500. There is no initial license fee, and the renewal license fee is $2,000.
  • Cannabis Mezzobusiness: The application fee for this license is $5,000. The initial license fee is $5,000, and the renewal license fee is $10,000.
  • Cannabis Cultivator: The application fee for this license is $10,000. The initial license fee is $20,000, and the renewal license fee is $30,000.
  • Cannabis Manufacturer: The application fee for this license is $10,000. The initial license fee is $10,000, and the renewal license fee is $20,000.
  • Cannabis Retailer: The application fee for this license is $2,500. The initial license fee is $2,500, and the renewal license fee is $5,000.
  • Cannabis Wholesaler: The application fee is $5,000. The initial license fee is $5,000, and the renewal license fee is $10,000.
  • Lower-Potency Hemp Edible Manufacturer: The application fee is $250. The initial license fee is $1,000, and the renewal license fee is $1,000.
  • Lower-Potency Hemp Edible Retailer: The application fee is $250 per retail location. The initial license fee is $250 per retail location, and the renewal license fee is $250 per retail location.

The Rules Around Packaging and Marketing your Recreational Cannabis Dispensary in Minnesota

There are several rules and laws around marketing your products and your business when you’re dispensing recreational cannabis in Minnesota.

For example, your packaging can’t appeal to people under the age of 21 - this means no cartoons and similar graphics.

In addition, the packaging of your products should be child-resistant, opaque and tamper-evident.

Another rule is your packaging shouldn’t make unsubstantiated claims about the health or other benefits of recreational cannabis.

You should also include QR codes in your packaging, which should link to additional information about your products.

When it comes to marketing - similarly to packaging - you can’t target your advertising efforts to people under the age of 21, as this is illegal.

Designing the layout of a Cannabis Store in Minnesota 

When designing the layout of your Minnesota dispensary, consider factors such as:

Customer Flow: Ensure a smooth flow of traffic throughout the store to prevent congestion and provide a pleasant shopping experience.

Product Display: Strategically showcase your products to attract attention and make it easy for customers to browse and make selections. Our dispensary digital signage (TV’s and Self-Service Kiosks) is a great shout for delivering a modern shopping experience.

Safety and Security: Implement measures to ensure the safety and security of both customers and employees, including surveillance systems and secure storage for products.

Compliance: Adhere to regulatory requirements regarding signage, product placement, and accessibility to comply with state laws.

Branding and Atmosphere: Reflect your brand identity through the decor, lighting, and overall ambiance of the dispensary to create a memorable and engaging experience for customers.

Accessibility: Ensure that the layout is accessible to all customers, including those with disabilities, by providing ample space and accommodations as needed.

Staffing: Design the layout to facilitate efficient staffing, including designated areas for customer interactions, product consultations, and checkout.

Flexibility: Design the layout with flexibility in mind to accommodate changes in inventory, seasonal promotions, and future expansions or renovations. 

How We Can Help when you Open your Cannabis Dispensary in Minnesota

If you’ve decided to open a cannabis dispensary in Minnesota - whether you’re dispensing medical cannabis or recreational cannabis - once you’ve got your licenses and found your premises, it’s time to set up your store.


Regardless of what type of cannabis dispensary you’re setting up, you want the people in your store or premises to enjoy their experience there as much as possible, so that they’re motivated to come back and use your business again.


One of the best ways to do this is by keeping them entertained and informed while they’re walking around your premises - and that’s where Seed Technology comes in.


At Seed Technology, we provide in-store digital engagement software for cannabis retailers, in the form of TV menus and self-service kiosks. We also partner with reputable cannabis POS and e-commerce companies to ensure your products, prices, and deals automatically update.

You can use our digital menus to explain more about your products to help customers and patients learn more about what you offer.

So, if you’re looking to keep the customers at your cannabis dispensary in Minnesota engaged and educated about what your business offers, get in touch with Seed Technology today

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