Starting a cannabis company in Colorado? We’ve put together a state-specific guide covering everything from available license types to fees, regulations, and what you should include in a Colorado cannabis business plan. Jump to a section by clicking below, or go straight to our sample cannabis business plan.
Medicinal and recreational marijuana sale and use are legal in Colorado. Patients can possess up to 2 ounces of usable cannabis and grow up to six plants at home for medicinal use if they have an online certification from a doctor. More than 86,000 patients have registered for medical marijuana use, but this has decreased since recreational use became legal. Medical cannabis sales via dispensaries could be as high as $410 million in 2021.
Thanks to amendment 64’s passage in 2012, Colorado adults 21 and over can possess up to 1 ounce of flower or 8 grams of concentrate for recreational use. Recreational dispensary sales could hit $2.1 billion in 2021. Businesses can grow and sell medical and recreational marijuana and products, as long as edibles aren’t shaped like a fruit, animal, or person.
Colorado issues licenses for five broad categories of cannabis businesses: retail stores (aka dispensaries), cultivation facilities (aka grow operations), infused product manufacturers (e.g., extracts or edibles), transporters, and testing labs. In Colorado, cannabis business licensees must follow state-mandated protocols for waste disposal, operating hours, recordkeeping, packaging, signage, advertising, and more.
Dispensary/retail store: This is a storefront where patients/consumers can purchase marijuana if they are 21 or older and have valid ID, and a doctor’s certification for medical marijuana.
Marijuana cultivation facilities: These businesses, also called grow operations, grow cannabis plants indoors or outdoors. Marijuana is then either sold through a dispensary or sold to an infused product manufacturer.
Infused product manufacturing: Cannabis manufacturers produce items like edibles, capsules, and oils, then wholesale them to dispensaries.
Testing lab: Consumers and regulators alike demand consistency and quality control in cannabis products, which creates demand for marijuana testing labs. These labs use methods like liquid or gas chromatography to analyze products for CBD and THC content, pesticides, terpenes, bacteria, fungi, and heavy metals, to name a few. Colorado cannabis testing facilities have to have a laboratory director on staff who has a valid Colorado M.D. license.
Transporter: These businesses transport marijuana between licensed cannabis companies (such as from a grower to a dispensary). You can transport both medical and recreational cannabis in Colorado, but you will need a separate license for each.
Ancillary business: If you don’t want to grow or sell cannabis in Colorado, there are plenty of other ways to be part of the booming cannabis industry. You can create a marijuana app, payment processing service, advertising agency, consulting firm, pest management product, accounting firm, automated plant watering system, security service, packaging labeling service, or legal firm--and that’s just the tip of the iceberg!
Local governments may forbid cannabis companies or certain locations, so check city and county regulations.
Application fees: Applying for a cannabis business license in Colorado costs $1,000 for a medical cultivation business, testing lab, or infused product maker. Application fees for a medical dispensary are $5,000. Application fees are $5,000 for recreational cultivation or infused product manufacturing. Recreational testing labs have to pay $1,000 in application fees. New recreational dispensaries have an application fee of $5,000.
License renewal: : It’s $1,500 to renew a license for a medical cultivator, testing lab, or infused product maker in Colorado. Medical dispensary license renewals $1,500. Recreational cultivation license renewals cost $1,500 to $3,500 (and higher if you have more than 3,000 plants). Recreational dispensary, testing lab, and infused product manufacturing license renewals cost $1,500.
Criminal record: Cannabis business license applicants must be of “good moral character,” can only receive investment from people also of “good moral character,” and can only employ people whose (lack of) criminal history confirms they’re of “good moral character.” Applicants also cannot have been convicted of a felony in the past five years. (See page 44 here.)
Inventory tracking system: Medical marijuana centers, grow operations, and testing facilities have to use an inventory tracking system that identifies, weighs, and tracks cannabis, including post-harvest waste. Plus, at least one medical marijuana business owner must be trained in administering the tracking system.
A business plan is not required to get a medical or recreational marijuana business license in Colorado, but it will certainly make the process easier. Your application already has to include floor plans, funding source(s) details, and ownership structure, some of which naturally overlap with a business plan. And if you plan on raising funding from investors, you definitely need a business plan.
Google your city or municipality name and “cannabis regulations” or “marijuana laws” (here’s info on Denver). If your city or municipality’s website doesn’t have information about cannabis, check recent local news coverage or contact your city clerk, city manager, or town hall.
Confused or overwhelmed yet? That’s normal. With such a highly regulated industry, and one with different rules in every state, starting a cannabis company can be very complex. Get help with your cannabis business plan from Masterplans, the industry leaders. We’ve worked with hundreds of cannabis entrepreneurs like yourself to create investor-ready documents and presentations so you can not only meet regulations but get the funding you need. Click below for your free, confidential consultation: