How to Open a Dispensary in Montana

How to Open a Dispensary in Montana in 2024

You must obtain a marijuana dispensary license from the Cannabis Control Division of the Montana Department of Revenue in order to operate a legal cannabis dispensary in the state. Although the next license application window will not open until July 1, 2025, you can start preparing by reviewing the requirements for the previous application window.

Why Open a Dispensary in Montana?

The recent legalization of recreational cannabis in 2022 has increased the demand for cannabis in Montana, meaning there are increasing opportunities for entrepreneurs to enter the cannabis industry in the state. According to cannabis sales reports published by the Montana Department of Revenue (MDOR), while medical cannabis sales have been diminishing since January 2022, recreational cannabis sales have grown rapidly, ensuring that the cannabis industry in the state remains on the up.

According to the MDOR cannabis sales report, more than $136 million worth of medical cannabis sales were made between January 2022 and August 2023, while nearly $380 million was recorded in adult-use cannabis sales in the same period. Between January 2022 and August 2023, the state generated $5.4 million via medical cannabis tax and $75.9 million in recreational cannabis tax.

Types of Dispensary Licenses in Montana

The Cannabis Control Division in the Department of Revenue issues only one type of dispensary license to persons looking to set up legal cannabis retail stores in the state. The marijuana dispensary license allows a marijuana dispensary to sell marijuana and marijuana products to registered medical cannabis card holders and recreational cannabis consumers aged 21 or older. The license also allows licensees to purchase marijuana and marijuana products from licensed cultivators, licensed manufacturers, and other licensed dispensaries.

How to Get a Montana Dispensary License

To obtain a marijuana dispensary license in Montana, follow these steps:

• Review the pre-licensing requirements: The Division of Cannabis Control lists general license application requirements and specific dispensary license application requirements on its website. You should review these requirements before commencing your application
• Submit your application: The application for a marijuana dispensary license must be submitted online via the TransAction Portal (TAP). To commence the application process, visit the TAP portal and follow these steps:
• Scroll to the cannabis control icon and select "Apply for or Manage a Cannabis Business License"
• Select "Apply for a Dispensary, Manufacturer, Cultivator, and Transporter License" tab
• Indicate whether you are applying as a business or individual
• Enter your Federal Tax Identification Number if you are applying as a business or your Social Security number if applying as an individual
• Select the type of license you want to apply for - dispensary license
• Provide the required business or individual applicant information, such as business type, email, legal business name, or date of birth, full name, and phone number if applying as an individual
• Provide the list and information of all owners of the cannabis business to be licensed with an ownership percentage. The total percentage must be equal to 100%
• Provide information on sources of funding
• Select "I agree" to a list of general questions if you agree
• Select "Add premises" for the number of premises you plan to operate for your dispensary. There is a $5,000 for each premises registered
• Upload the required supporting documentation
• Pay the required application fee. Note that all business license applications require a 20% deposit payment with submission before the review process may begin. The fee is non-refundable regardless of the determination on the application. Payment can be made via e-check during the application or after the submission of the application. If you are paying after submitting the application, you can make the payment by:
  • Electronic credit card payment via Pay Online on the confirmation screen
  • Call Cannabis Control at (406) 444.0596 and press option #1 to make a payment
  • By physical mail to:

MT DOR-CCD P.O. Box 5835 Helena, MT 59604-5805

In-person at the Department of Revenue

Note that the application fee payment must be made within 10 days, or the application will be denied

• Select "OK" on the first and second confirmation screen. You may print a copy of the application confirmation with your confirmation number, email address, and retrieval code to retrieve your application from the TAP portal on the second confirmation screen
• Background Checks: Applicants and key individuals associated with the dispensary must submit fingerprints to the Cannabis Control Division upon initial application. Fingerprints must be mailed in, and a Privacy Act Statement and Consent to Fingerprint Form must be submitted with the application. For more information on fingerprinting, see the CCD Fingerprinting Requirements and Instructions guide
• Site Inspection: Prior to application approval, the Montana CCD will inspect and approve all locations before cannabis dispensary operations begin. See the CCD Inspection Checklist for more information on the dispensary facility inspection

If, after inspection, the CCD determines that an application meets all required conditions and passes the necessary checks, the Montana CCD will issue the dispensary license.

For further assistance in completing a marijuana dispensary application on the TAP portal, see the application guide or contact the Cannabis Control Division at (406) 444-0596. Select option #2 on the call to be connected to a License Technician.

Note that the application window for marijuana dispensary licenses is currently closed. Applications for new dispensary licenses will be available starting July 1, 2025.

Information and Documents Required for a Dispensary License in Montana

Marijuana license dispensary applicants are required to provide the following information and documents:

• Documentation of Montana Residency: Individual applicants with at least a 5% financial interest must be residents of Montana at application submission and for a period of 1 year prior to requesting licensure.

Acceptable forms of documentation include:

• Montana ID card

• Montana driver's license

• Tribal ID card from a tribe in Montana

• Other documentation forms will be considered on a case-by-case basis per the definition of a resident in Section 42.39.102(46) of the Montana Administrative Rules

• Date of Birth Documentation: Individuals applying for a marijuana dispensary license, with at least a 5% financial interest, must be age 21. Acceptable forms of documentation include:

• Driver’s license

• State or tribal ID card

• Birth certificate

• Passport

• Consent to Fingerprint: Individuals applying for a dispensary business license, with at least a 5% financial interest in the business, must submit fingerprints and complete a background check. Fingerprints must be submitted every 5 years, with name-based background checks required in all other years

• Fingerprint and Background Check Instructions Privacy Act Statement

• Property Ownership or Property Owner Permission Documentation: If the business applicant owns the property where dispensary operations will be conducted, acceptable forms of documentation include a title, a deed, mortgage paperwork, property tax information, or other related documentation. If the business applicant does not own the property, documentation of permission from the property owner must be submitted instead. Note that if a business will operate in multiple locations, the documentation of ownership or permission must be submitted for each property location

• Property Owner Permission Form

• Business Organization Chart: This organization chart must include every entity, controlling beneficial owner, passive beneficial owner, financial interest holder, as well as all employees that make up the dispensary organization as outlined in statute 16-12-102 and 16-12-203, MCA

• Sample Organization Chart

• Business Structure Form: All owners, managers, and financial interest holders in the business must be disclosed

• Business Structure Form

• Source of Funding Verification: The applicant must submit evidence that they have a source of funding from a suitable source

• Building Inspection Report: Documentation of passing the required dispensary building must be provided

• Fire Inspection Report: Dispensary locations requesting licensure must pass a fire inspection conducted by the appropriate authority Documentation of passing this inspection must be required

• City and County Approval: Dispensary locations are required to have approval documentation from the county, city, or both to operate in their jurisdictions. Typically, this documentation is an approved local business license, but it may vary by municipality

For more information on the required documents and information for a marijuana dispensary license application, see the Required Documents section of the general license information page of the CCD website.

What Plans Do You Need to Open a Dispensary in Montana?

You need a solid business plan when applying for a Montana marijuana dispensary license. In Montana's evolving cannabis landscape, a business plan not only helps you navigate the regulatory environment but also positions your dispensary for long-term success by providing a strategic roadmap and attracting potential partners and investors. A well-crafted business plan should include the following sections:

• Executive Summary
• Market Analysis
• Marketing Strategy and Implementation
• Operating Plan
• Financing Plan
• Organizational Structure

An operation plan and site plan may also be required as supporting documentation when completing your marijuana dispensary license application. However, the Montana CCD will specify which plans are necessary when the next application window opens.

Are There Municipal Requirements for Opening a Cannabis Dispensary in Montana?

Yes, before you may be issued a marijuana dispensary license by the Cannabis Control Division, you must obtain city or county approval. Montana municipalities have varying requirements that must be met by applicants seeking a cannabis business license. Typically, you must obtain a local business license or permit before you commence dispensary operations. Some municipalities may have additional requirements besides obtaining a local permit; therefore, you should consult with local authorities to understand specific municipal requirements when preparing to submit a dispensary license application.

How Long Does It Take to Get a Montana Dispensary License?

Per Rule 42.39.107, the department will approve or deny a dispensary license application within 120 days of receiving a complete application. Note that an application is considered complete when the applicant has provided all relevant information and documents required in the application, has paid the non-refundable processing fee pursuant to ARM 42.39.104(2), and paid the remaining balance of the license fee upon notification by the department of its pending approval.

Where Can You Locate a Cannabis Dispensary in Montana?

Per Section 16-12-301 of the Montana Code Annotated 2021, municipalities are allowed to opt out of allowing cannabis dispensaries to be located within their jurisdictions. In municipalities where a dispensary may be located, there are also zoning provisions for where dispensaries may be located.

Besides zoning provisions, dispensary establishments must comply with certain distance buffer requirements from certain sites, even in zoning districts where they are permitted to be located. Generally, per Rule 42.39.124 of the Montana Administrative Rules, no dispensary may be located within 500 feet of a school or religious institution. However, local governments may set more stringent distance buffer requirements. Therefore, you should consult local authorities to verify where you may legally establish your cannabis retail stores.

Can Licensees Have More Than One Dispensary Location in Montana?

According to Montana law, a cannabis business license applicant may apply for a dispensary license and multiple dispensary locations. However, each location must undergo its own approval process, as each location must be applied for, inspected, and approved prior to commencing operations.

How Much Does It Cost to Open a Marijuana Dispensary in Montana?

To open a single location for a marijuana dispensary in Montana, you must pay an application fee of $1,000 and an initial licensing fee of $5,000 if your application is approved. If you are opening more than one dispensary location, the application fee is 20% of the license fee. Note that you must pay an initial licensing fee of $5,000 per dispensary location.

You will also incur other costs such as real estate, inventory costs, security system, and marketing costs, which may go as high as $2,000,000 depending on the size of your dispensary and its scope of operations. There are also periodic costs, such as salaries, utility bills, advertisement, rent, and inventory, which vary between $400,000 and $750,000 annually.

Also, Montana charges a 20% tax on recreational cannabis sales and a 4% tax on medical cannabis sales. Some municipalities may include local taxes, meaning bigger tax remittances to relevant authorities.

Do You Need an Insurance Policy for a Cannabis Dispensary in Montana?

Having cannabis insurance is important for mitigating the operations risks associated with your cannabis dispensary. Although there are no specific insurance requirements for marijuana dispensaries in the state, cannabis retailers would do well to have the following policies:

• General Liability Insurance: This provides comprehensive protection against a wide range of common liabilities faced by cannabis dispensaries. It specifically addresses third-party claims, such as injury, property damage, or personal injury occurring on your dispensary premises
• Product Liability Insurance: Product liability insurance is a policy aimed at protecting a dispensary from claims linked to the products they offer. It specifically covers costs associated with injuries or damages resulting from the sale of a product, including medical expenses, legal fees, and potential settlements
• Property Liability Insurance: Property liability insurance offers comprehensive protection for the physical assets of a cannabis dispensary, like the building, inventory, equipment, furnishings, and more. It protects these assets from various risks, including fire, theft, vandalism, and natural disasters, enabling prompt recovery

Note that other than in a few exemptions, all businesses in Montana are required to carry workers' compensation insurance. This policy helps cover the dispensary employee's medical costs if they get a work-related injury.

How to Get a Grant to Open a Dispensary in Montana

Starting and running a cannabis dispensary in Montana requires a huge financial outlay, and not many entrepreneurs can fund such operations. Traditional financial institutions, such as banks, are hesitant to offer grants or loans to cannabis businesses due to the illegal status of the substance federally. However, you can look to other means to raise the required capital to start your dispensary business, such as:

• Private Lenders and Investors: Private lenders and investors represent an alternative funding avenue for dispensaries. These entities or individuals may be more open to investing in your enterprise, albeit often in exchange for equity or a part of future profits
• Personal Savings: You can leverage personal savings or equity resources to serve as an initial capital injection for covering startup expenses
• Family and Friends: This involves speaking with family members and friends to see if they may be interested in investing in your dispensary venture
• Venture Capital and Private Equity: Venture capital firms and private equity investors specializing in the cannabis sector can provide substantial funding. Typically, they seek equity participation in your enterprise in return for their financial support
• Crowdfunding: Crowdfunding platforms facilitate the execution of campaigns aimed at securing contributions from a broad spectrum of supporters. Rewards-based crowdfunding offers backers non-equity incentives, while equity crowdfunding permits investors to acquire a stake in your business

Does Montana Have a Social Equity Program for Cannabis Dispensaries?

No, Montana does not currently have a social equity program for cannabis dispensary license applicants or licensees.

Does Montana Tax Marijuana Dispensaries?

Montana requires medical marijuana dispensaries to include a 4% tax on medical cannabis sales but also allows counties to increase this figure if necessary. Also, the state imposes a 20% tax on recreational cannabis but enables local jurisdictions to add up to a 3% excise tax on adult-use cannabis sales. The Montana Department of Revenue collects state-imposed cannabis taxes.