Are you thinking about opening a recreational marijuana dispensary in New York? Congratulations!
The empire state legalized adult-use cannabis in 2021 with much fanfare. The Marijuana Regulation and Taxation Act (MRTA) made New York the 15th state to legalize recreational cannabis. But their process for licensing faced many hurdles. The first sale of legal marijuana was in December of 2022.
One unique component of New York’s legal cannabis program is the provisions for social equity, with 50% of licenses reserved for individuals from communities disproportionately impacted by cannabis prohibition.
New York cannabis is still in its infancy — details on licensing, regulations, and the application process were just approved on September 12th, 2023. See those regulations here, but also be sure you’re intimately informed about all facets of the legal marihuana program in New York.
Learn more about NY cannabis
New York Cannabis Laws Guide
This guide will outline how to open a dispensary in New York, including information on licensing, financing, real estate, security, staffing, compliance, inventory, and tech stack.
Scroll through for a step-by-step process for getting a dispensary open in New York, or use the links on the left to jump directly to your most pressing questions.
Disclaimer: Always consult your lawyer, accountant, realtor, and other trusted consultants to help you navigate the complexities of opening a cannabis dispensary. The information provided herein is designed to illustrate and educate, but is not to be construed as legal or financial advice.
Plan your New York cannabis business
The first step for cannabis business owners is to get your affairs in order. You’ll need to understand your state’s cannabis laws, create your formal business entity, write a business plan, find a location, and prepare to submit a license application.
Form a business entity
If you haven’t yet formed a business, that’s your first step. Work with a lawyer to ensure everything is correct, but at a minimum, you’ll need to decide whether you’re creating an LLC or corporation, and file with the state of New York.
Then you can get tax ID numbers for the business, open a business bank account at a cannabis-friendly bank or credit union, and decide on your business insurance needs, including general liability insurance, property insurance, workers’ compensation insurance, and product liability insurance.
New York does have requirements for insurance coverage, so be sure your policies are in compliance.
Can dispensaries use banks?
Note: Every city, county, and state is different. You may have additional steps for taxes, licenses, or fees based on your business type and location.
Write a business plan
Cannabis is a complicated industry, with more compliance and legal considerations than other types of businesses. Having a rock-solid business plan can help.
It may be tempting to skip this step, but your dispensary business plan must be submitted to the regulatory body for New York, called the Office of Cannabis Management (herein referred to as “the Office”), with your application.
A good business plan should include:
The physical location of your dispensary
Funding plan, or where your startup and ongoing capital will come from
Sourcing plan for procuring your cannabis products
Estimate or actual number of employees, or who you’ll hire for what roles and your dispensary org chart
Diversity and equity plans
Safety and security plan
Technology plan, including which cannabis point-of-sale and compliance software you’ll use to manage your dispensary
Any other relevant information you want to document
Find a location
Your dispensary location is a critical piece of the puzzle, but not an easy one. You’ll need something in a visible location, with ample parking, and enough space to achieve your ideal workflow.
But most importantly, it needs to be in a municipality that accepts cannabis businesses. Half of New York’s 1,520 municipalities opted-out of dispensaries (and 877 opted out of on-site consumption). See the full list.
The reason we’re talking about real estate now is you will need to show a lease or agreement for the location with your application materials.
Every state has specific regulations about where dispensaries can be located. In New York, your chosen location and site plan will need to be approved by the Office, and must adhere to local zoning laws. This approval will be based on the type and number of nearby licenses, impact on traffic, parking, noise, whether you’ve obtained all necessary state and local licenses and permits, demonstrated necessity of the licenses, and other factors specified by laws that contribute to public convenience and/or community interest.
Your dispensary must:
Be accessible from the street level
Be located on a public road suitable for business activities
Not be on the same road within 500 feet of school grounds or community facilities
Not be on the same street or avenue within 200 feet of a house of worship
- Not be within a certain distance from other licensed adult use dispensaries or medical cannabis facilities, unless specifically approved. These distances differ based on municipality population:
20,000 or more = 1,000 feet radius
Less than 20,000 = 2,000 feet radius
Note: Distances are measured in a straight line from the nearest house of worship, school, community facility or other dispensary to the dispensary’s entrance.
Find a local real estate professional who specializes in cannabis real estate to help in your search. And use the public resources available to you, like city zoning and administration offices.
When looking for a location for your dispensary, focus on spaces that:
Align with your business plan
Are large enough to meet your needs
Are in an appropriate location to serve foot traffic
Have enough parking
Have opportunities for expansion/growth
Are within your budget
Don’t just look at monthly costs, but also factor in how much it’ll take to renovate or retrofit the space for your business needs. Finally, look at local competition (both existing and planned).
There are many factors that go into finding the perfect location for your retail dispensary. Take the time necessary to secure the best possible space to help ensure your success.
Document your dispensary plans
A unique and specific step for New York dispensaries is a required dispensary site plan and operating plan. This goes beyond your business plan and location details to fully outline your processes.
Your dispensary site plan should include:
Where your store is physically located
Activities that happen in the different parts of the dispensary
Clear details about the property, including edges, like physical boundaries, roads, and water crossings
Where sanitation facilities are located
Overall size and dimensions of all areas
Where people enter and exit the property and the building, including emergency exits
Proof that your dispensary meets the rules for its location
Your operating plan should include:
- Written operating procedures to:
Deter theft and prevent loss of cannabis and cannabis products
Ensure access to restricted areas is restricted only to those with authorized access
Prevent loitering on the premises
Handle, store, and transport cash
Monitor and track quality assurance concerns and complaints
Identify workforce training needs on an annual basis
Maintain an alcohol-free, drug-free, and smoke-free workplace (except for smoking or vaping which occurs within a limited consumption facility)
Manage and dispose of hazardous waste
Manage, recycle, and dispose of all waste in a manner that demonstrates best practices
Any other procedures as determined by the Office
Sell cannabis products to consumers in a manner that demonstrates compliance
Prevent sales to consumers where there is a risk to their health or safety
Maintain access to the dispensary by individuals with physical disabilities
Remain compliant with local law, including odor, noise, use of the sidewalk, etc.
Deliver cannabis products to consumers in a way that demonstrates compliance
- An employee handbook that is available to employees at all times, and includes information:
Tailored for the licensee’s employees and clearly delineated roles and responsibilities in implementing the written operating procedures contained within the operating plan
Related to the safer consumption of cannabis products
Related to employee safety, including shutdown and emergency procedures
To assist employees in compliance with inventory tracking requirements and operation of the inventory tracking systems
To ensure employees allow investigations and inspections
On how to access current laws, rules and regulations
A list of all employees authorized to access surveillance, including first name, last name, and employee ID number (or other unique identifier)
Now that you have a plan for your new recreational use dispensary, you can start to put together a more clear budget and plan.
A cannabis business can generally expect expenses in these categories:
Real estate and build-out - consider your initial costs, plus ongoing rent or mortgage. You’ll probably also have renovation expenses to start.
Licensing/application fees - the cost of getting licensed to run a dispensary in New York. You’ll also need to plan for your renewal fees—$8,000 for retailers every two years, which includes application + license fees.
Operational costs - your day-to-day business operating expenses including, but not limited to, utilities, business or professional fees, marketing, etc.
Hardware, software, security, and other tech - many of these are monthly or annual subscriptions, but may include more sizable startup costs.
Staffing costs - the cost of hiring employees, including salaries, benefits, taxes, etc.
Inventory costs - or the actual expense of sourcing and purchasing your cannabis products. You’ll need to have enough stock on your shelves for opening day and beyond.
Taxes - cannabis businesses are heavily taxed and can’t participate in normal business write-offs like 280E, so plan ahead for your quarterly tax payments.
Do you have a plan for where this money will come from? As a cannabis entrepreneur, you have a few options for funding:
Self-funding - the easiest option is to already have access to capital (acquired through legal means).
Friends and family - another potentially easy way to meet dispensary capital requirements is through loans or investment from family and/or friends.
Partners - many cannabis businesses are legally set up as partnerships, where each partner contributes something meaningful. Partners can be silent (they primarily serve as the funder), or active; both are great if they serve your needs. Be sure to check eligibility requirements to ensure your partnership meets the criteria to apply for a license.
Loans - depending on your personal finances, you may be eligible for a personal loan to cover some (or all) of the upfront costs of opening a dispensary. You may also be able to secure a dispensary business loan, but be honest with your lender in how the funds will be used; not all financial institutions will work with cannabis businesses.
Private funds - whether it’s private equity, angel investors, or venture capital, you may have to look to outside investors to fund your cannabis business. This option will decrease your ownership stake in your company.
Crowdfunding - another less-popular but potentially viable option is to look to the general population to support your business venture.
State funding - Capital from the New York State Cannabis Social Equity Investment is used to help eligible business owners with the cost of starting a dispensary, including identifying and leasing suitable retail locations, and design, constructure, and fit-out of the spaces.
What does it cost to open a dispensary in New York?
Most sources suggest having between $250,000 – $1 million+ to open a dispensary. But that’s not all that helpful. Here’s a formula to give you a sense of what to expect. You can come back and fill in the details as you know your unique estimates.
Note: This estimate is for a standard license. Micro businesses and social equity applicants have significantly reduced application, licensing, and sometimes real estate costs. Social equity applicants, also referred to as justice-involved individuals, may also take advantage of programs from technology companies to further reduce the barrier to entry.
See all cannabis social equity programs for dispensaries.
Application and licensing fees in New York = $8,000
- Dispensary application fee = $1,000
Due when the application is submitted to the Office.
This fee is non-refundable.
- Licensing fee = $7,000
Due prior to final issuance of a license.
Renewal Fees = $7,000 every two years
Note: If you also want a delivery license, plan for an additional application fee, and $4,500 license and renewal fee.
Real estate fees = $150,000
Includes annual rent or mortgage premiums, plus upfront design costs.
Will be higher in more expensive cities, like NYC, or for larger remodels, or cheaper in more affordable areas of the state.
Plan for higher costs up-front, but it’ll stabilize over time to just rent/mortgage and maintenance/repairs.
Employee salaries = $300,000
Your store size and operating procedures will determine how many initial staff members you’ll need, but plan for around six employees to start, including a manager, several budtenders, and an inventory specialist. This figure includes an average of $20/hour, plus overtime, benefits, etc.
Professional fees and services = $50,000
This may decrease in future years, but to start, expect to pay for legal, financial, insurance, and other professional consulting fees to get your business started.
Security, hardware, and software = $50,000
This covers all network, security, hardware, and software for your business, including computers, TVs, printers, scanners, internet, and other software like POS, ecommerce, payments, etc.
After your initial investment, plan for at least $2,000 per month in recurring software expenses.
Marketing expenses = $100,000
Perhaps the most variable of your costs when opening a cannabis business, this factors in one full-time marketing staff person (or agency costs per year), plus costs for your website, ads, printing, etc. to promote the dispensary.
Cannabis products = $1,500 per pound
Your cost of products for opening day (plus ongoing stocking) will vary greatly based on your store size, number of SKUs, stock on hand, and supplier rates, but plan for an average of $1,500 per pound of cannabis products, including flower, edibles, vape cartridges, tinctures, topicals, lotions, capsules, beverages, prerolls, etc.
GRAND TOTAL = $658,000* (not including cannabis product inventory)
*Disclaimer: This is a rough estimate of the upfront and first-year costs of opening a recreational cannabis dispensary in New York. It is to be used for informational and illustrative purposes only as every market, location, and business will have unique startup costs.
Note: There is a separate process to open a medical dispensary in New York, though applications have been closed for some time to prepare for adult-use.
Apply for a New York recreational dispensary license
To open a dispensary in New York, you’ll need a license to be able to possess, sell, and deliver cannabis.
Up until September 2023, the state has been operating solely with CAURD licenses (which stands for Conditional Adult-Use Retail Dispensary License).
These licenses had strict application qualifications, where at least 30% of the business must be owned by someone who:
- Has been negatively impacted by the war on drugs
- Has qualifying business experience
- Has a significant presence in the state of New York
Applications for CAURD have since been closed, but were estimated to be the first 100-200 dispensary licenses. CAURD licensees were to be the first dispensaries to open in the state.
On September 12, 2023, the state of New York finally approved adult-use cannabis regulations and drafted the official process and expectations for applicants who didn’t qualify, or weren’t able to procure a CAURD license.
The basics of applying for a dispensary license in NY
To open a dispensary in New York, you need a dispensary license. There is no stated limit to the number of dispensary licenses available, but officials said it would depend on market demand.
CAURD license applications are closed (as of September 26, 2022). CAURD licenses are good for four years, and must be renewed every two years. Before the expiration date, conditional license holders may seek to transition to a standard license.
To obtain a license, you will need to submit an application, lease or agreement for a location, detailed business plan, and plans for security, transportation, packaging, and labeling. The documentation required to apply for a dispensary license in New York is extensive.
If you’re planning to operate a small operation, you may be eligible for a microbusiness license, which limits the amount of cannabis a business can grow or possess.
If you’ve been negatively impacted by the failed war on drugs, you may be eligible for the social equity program in New York.
How to get a dispensary license in New York
All application activities must be done online, by the applicant, managing member (if LLC), or officer (if corporation or nonprofit).
Step 1: Create an account at NY.gov.
Step 2: You will be required to provide the following information for the applicant and each true party of interest in an application:
- Identity of the application or true party of interest.
- If the applicant or true party is an individual, you’ll need to provide:
Date of birth
Spouse or domestic partner, if any
Social security number
Other aliases or names by which they have been known by or conducted business as
Any other information required by the Office
- If the applicant or true party is an entity, you’ll need to provide:
Address of the principal place of business
All websites, social media sites, internet presence, and digital applications or platforms owned, operated or controlled by or registered to the applicant
State or country of incorporation or organization
Contact information of the designated individuals upon whom service shall be made
Federal employer identification number (EIN)
Other names by which it has been known or conducted business at any time
The ownership interest percentages
Any other information required by the Office
- If the applicant or true party is an individual, you’ll need to provide:
- Applicant ownership and financial disclosures, including:
The percentage of ownership interest, financial interest or any other interest
A list of all parent companies, subsidiaries, predecessors, and successors of the applicant
Copies of business formation and organizational documents
All proposed or executed contracts, term sheets, agreements, or side letters between the applicant or its true parties of interest and a goods and services provider
Capitalization tablets, like specific holders of ownership above 10% of interest if the applicant is a private entity, and 5% of interest for applicants who are publicly traded entities
Documents relating to the ownership structure of the applicant
Financial documents, including financial statements and tax documents of the applicant for the most recent fiscal year ending prior to the date the application is submitted
If the applicant was formed within the year preceding the application for licensure, provide financial statements for the period of time the applicant has been in existence and any pro forma financials used for business planning purposes
An organizational chart indicating the ownership structure and all persons who have decision-making authority
A descriptive of any license or authorization in any other state, currently or previously, to cultivate, process, manufacture, distribute, deliver, or sell cannabis or cannabis products in any form, held by the applicant or any true parties of interest
Details of any administrative proceeding or any governmental agency action in any jurisdiction during the past ten years, such as fines, disciplinary actions/requirements, sanctions, or if the applicant or any true parties of interest served on a board for a business or nonprofit organization that was fined, disciplined, sanctioned, or the equivalent
Information related to business continuity plan
A certificate of status or good standing from the governing state agency of the state of formation
A list of any charitable contributions by the applicant in the last five years, exceeding $5,00 annually or greater than $250,000 collectively for the applicant’s donation history
A copy of the labor peace agreement
Any other information requested by the Office
Criminal history and legal proceedings, including fingerprints, information regarding any pending, settled, or closed legal actions from the past ten years, any judgments from the past ten years, bankruptcies (voluntary or involuntary), delinquencies in the payment of any fees or tax in the past ten years, and evidence of good moral character.
Premises details, including landlord information (for leased properties), location, drawings, and floor plans, the nature of the applicant’s interest in the premises, weather leased or owned, a statement that the location and layout doesn’t violate any requirements of the Cannabis Law, a statement that the applicant has complied with notification requirements relating to the municipality in which the location is located, a copy of a certificate of occupancy, copies of all applicable executed and proposed deeds, leases, rental agreements, or option contracts for the licensed premises, documentation of ability to obtain insurance, and any other requested information.
Step 3: Applicants will need to provide all required information, then submit their application along with their application fee of $1,000 for retail licenses.
Step 4: Completed applications are then processed. Applicants will be reviewed and evaluated in an order and manner determined by the Board, based on provisional, social, and economic equity status or any additional criteria to be set by the Board. Such criteria may include:
A community impact plan, highlighting the applicant’s proposed strategy for community engagement
Plans demonstrating compliance, which highlight technologies, techniques, and strategies to protect the surrounding environment, limit carbon footprint, and leverage sustainable energy sources
Completion of any workforce or training programs offered by the Office
- The applicant’s history in creating or maintaining an equitable workplace environment, including:
Wages, including starting hourly rates, starting salary, or average annual wage percent increases
Benefits, including number of hourly employees with medical coverage, and employer paid retirement benefits
Diversity in hiring and promotion
History in creating or delivering culturally and linguistically competent services to diverse and underserved populations, including training programs, community outreach, published materials, administrative and organizational accommodations, etc.
Serving in community leadership roles with established and licensed businesses, nonprofits, religious organizations, community clubs, neighborhood associations, etc.
Note: The Board may prioritize review, selection, and issuance by region, license type, provisional status, social and economic equity status, or any other criteria the Board may determine.
Step 5: Once your application is approved, applicants receive a provisional license and must satisfy all conditions determined by the Board. Applicants must pay the license fee upon full licensure.
Note: Licenses expire two years after the date they're issued. Applications to renew have to be filed with the Office no more than 120 days (but not less than 60 days) prior to the expiration, along with the non-refundable application fee and license fee.
New York social equity program for cannabis businesses
Applicants who qualify for New York’s social equity program, but didn’t apply as part of the CAURD process, are still eligible to apply.
To qualify, applicants must be an individual from a community disproportionately impacted by the enforcement of cannabis prohibition, a minority-owned business, a women-owned business, a distressed farmer, or a service-disabled-veteran-owned business.
Find out if you qualify for Flowhub's Social Equity Program
Applicants seeking to qualify as a social and economic equity applicant need to submit an application for social and economic equity status.
Design your New York dispensary
Dispensary design isn’t just about where your dispensary is, or what it looks like. It’s how your shoppers experience your brand.
Here’s a short list of considerations to make in store design and layout:
How customers will move throughout the store
Whether they will pay at a terminal, handheld device, or kiosk
Whether there’s different pathways for in-store vs. online orders
How your products will be display/showcased
Your brand elements and design
Use of entry or waiting room space
Security concerns of doorways
Where secure inventory is stored (both on the floor, if applicable, and in a vault)
Where staff will stand and work
Breakroom or safe staff area
New York also has several specific requirements that may impact how your dispensary looks and functions:
Dispensaries cannot sell cannabis products from a vending machine or allow such a vending machine to be installed at the interior or exterior of the premises of the retail dispensary.
Marijuana product samples can be displayed and available for customers to inspect (through sight and smell). However, these samples may not be consumed or taken out of the dispensary, and they must be kept in a secure, locked place when not being inspected. Display samples must be handled in a safe and sanitary manner at all times.
You must clearly communicate the price of items to customers, whether in person, online, or over the phone. All items displayed in the dispensary must have a price tag, sign, or placard stating the item’s price and total cost (including tax). You are not required to display a “menu,” but any menus you do display — including online menus — must show individual item price and total cost. This doesn’t prohibit you from changing prices or otherwise discounting products, but you cannot advertise or promote in any communications.
Licensees cannot advertise giveaways, discounts, price reductions, points-based systems, or customer loyalty programs that include any words that imply discounts or free, including, but not limited to, “price drop,” “free,” “sale,” or “discount.”
All retail dispensaries must be in a physical brick-and-mortar store, but you may also operate an additional drive-thru window and/or drive-thru pre-order pick-up lane with written approval from the Office.
In addition to drive-thru or pick-up lanes outside of the store, you may also add express lanes inside the store for order-ahead pickups. These areas must be clearly defined on our dispensary site plan, but do not require written approval from the Office.
- Licensees must visibly display the following information inside the dispensary:
The licensee’s retail dispensary license
Hours of operation
Notice that “Consuming cannabis is not allowed on this premises.”
Notice that “Cannabis can impair concentration, coordination, and judgment. Do not operate a vehicle or machinery under the influence of cannabis.”
Notice that “Using cannabis, in any form, while you are pregnant or chest/breastfeeding passes THC to your baby and may be harmful to your baby. There is no known safe amount of cannabis use during pregnancy or while chest/breastfeeding.”
Notice, in bold and including capital letters as indicated, that “Adult-use cannabis products are for use only by persons 21 years and older. KEEP OUT OF REACH OF CHILDREN AND PETS.”
Licensees must keep the interior of the store orderly, even during periods of heavy customer traffic. You may use stanchions, pre-orders, scheduled appointments, pick-up lanes, or other traffic control methods.
Hours of operation: Licensees may only sell or distribute cannabis products, including through delivery, during their hours of operation. Customers are allowed to place orders, such as through online ordering, and pay for those orders outside of business hours, but may not receive those products until hours of operation begin.
You may not operate from 2:00 AM to 8:00 AM unless given express written consent from your municipality, or the municipality passes a local ordinance authorizing dispensaries to operate beyond such hours.
You may not restrict operation to less than 70 hours a week.
Municipalities are authorized to pass local laws/regulations governing the time, place, and manner, including hours of operation, for adult-use retail dispensaries. Be sure to check with your local government to ensure your proposed hours align with their rules.
🤔🏬 Take the Store Layouts Quiz to find the perfect layout for your dispensary.
Create a safe and secure New York dispensary
Just like many states, New York’s regulatory agency has strict security requirements for licensed dispensaries. Here’s the basics:
Storing and displaying cannabis products
Customers cannot touch the cannabis products directly unless they're checking out samples with help from authorized dispensary staff.
If cannabis products are shown to customers, they must be locked up behind a counter or barrier.
Products not meant for showing must be kept in a place only authorized workers can get to. These products shouldn't be visible to customers.
Areas in the dispensary where cannabis products are kept, like counters, cases, safes, or rooms, should not be reachable by customers or workers who aren't authorized to handle them. This includes keys, passwords, or combination numbers needed to access these areas.
Dispensary license holders need to put effective security measures in place to stop cannabis and products from being taken or lost, to keep money safe, to keep unauthorized people out of cannabis areas, and to make sure everyone, including workers and the public, are safe. License holders may hire armed security services, but they are not required.
Here is a list of things licensees must do to keep their dispensary secure:
- Make and follow a security plan, including steps to:
Keep out people who aren't allowed
Keep everyone safe
Stop cannabis products from being stolen or lost
Lock all doors and windows
Safely keep, transfer, and handle money
Make sure all entrances and exits are secure, and only passable by authorized individuals.
The inside and outside of the dispensary should have enough light for proper surveillance.
Remove any possible hiding places around the exterior of your building, including large plants and trees.
Implement and maintain a security system that meets state regulations.
Maintain a visitor log of all persons, other than employees, visiting the dispensary.
Required security system
Dispensaries must have a security system that uses high-quality equipment, including at least:
Perimeter alarm: If someone tries to get in without permission, an alarm should go off. This alarm needs to alert someone inside the dispensary and a separate monitoring station.
Video surveillance: Cameras are needed in all places where cannabis products might be, including entry and exit points, parking lots, storage areas, sales areas (including each point of sale terminal), and where money is kept. These cameras should:
Show clear images, even if it's dark.
Take pictures when needed.
Keep recordings for at least 60 days.
Include a date/time stamp embedded on all recordings.
Have available footage for the Office or its representative to see upon request.
Continue working during power outages for at least 8 hours.
Failure alerts: If the security system fails, there should be a way to alert the dispensary's responsible person within five minutes through sound, text, or visuals.
Limited access: Only authorized people can access surveillance areas and rooms. A list of these people should be available to the Office upon request.
Regular checks: All locks and security equipment should work properly and be tested every month. Records of these tests should be kept for 5 years and shown to the Office if asked.
Learn the basics of dispensary security
Read the Dispensary Security Guide to find out where most dispensaries are at risk, then take action with best practices for both physical security and cybersecurity.
Hire and retain qualified dispensary employees
Now that you’re getting closer to opening day, it’s time to hire and train your dispensary employees. This team is vital to the success of your dispensary.
First, create an all-star dispensary team. What roles you need will depend on your business plan, location, store design, and vision. You’ll also need to determine what role you, as the dispensary owner, are playing in the day-to-day operations of the store. What additional staff do you need? What is the hierarchy? What benefits can you offer? Do you have the funds to pay your staff appropriately?
Your primary hire is what the Office calls an Employee in Charge. This person must be at least 21 years old and an individual may only be an Employee in Charge for one dispensary at a time.
Your Employee in Charge is responsible for:
Managing the core day-to-day function of the dispensary, including supervision and management during hours of operation
Opening and closing the facility
Inventory and delivery acceptance
Recordkeeping and submitting required reports and notifications to the Office
Ensuring the proper conduct of dispensary employees
Maintaining the dispensary’s staffing plan and updating the plan within five business days of any change in an individual’s employment status
Employee training and compliance
Notifying the Office of the termination of employees for diversion of cannabis products or theft of currency (within 24 hours of termination)
Turning away individuals who pose a risk to the public
The staffing plan should include (at a minimum): name, contact information, and age of all workers involved in activities related to the sale of cannabis products.
Beyond your Employee in Charge, you’ll also need budtenders or cannabis sales associates to serve customers and fulfill orders, someone to greet your store visitors (and secure the entryway), and someone to manage inventory and/or compliance. Based on the size and complexity of your business, you might need more or fewer people on your team.
All employees must be over the age of eighteen, but only those over twenty-one can have direct interactions with customers inside the dispensary, transport cannabis products in any way, or be involved in any delivery operations.
New York does have mandates for employee training, health, and safety. Here’s the basics:
You are in charge of your employee’s actions and must ensure that they are trained for their jobs.
All employees must have supervisors who know how to successfully complete the job.
- All employees must have access to a training manual. The manual should include:
Safety and security procedures
Opening and closing processes
Dealing with customers and traffic flow
Ordering and selling processes
Preventing risky marijuana sales or illegal activities
- Employees need to know about the cannabis products being sold, including:
Types of products
Onset time and duration
How to use the product safely
How to store the product safely
Privacy and rules: employees should know customer privacy rules and guidelines for alcohol, drug, and smoke-free workplaces
- All employees must be trained based on your manual, following this minimum curriculum or other authorized programs:
Understanding Cannabis: The history, effects, and responsible use of cannabis
Safety: Effects on the body, signs of overuse, safer storage, and product labeling
Preventing Sales to Minors: Checking IDs, spotting fake IDs, and handling those cases
Security and Emergencies: How to keep the place safe and what to do in emergencies
Laws and Regulations: Knowing the laws and rules, including inspections and penalties
Privacy and Confidentiality: Keeping customer info private
Training can happen over time, can be conducted by the license holder or other qualified individual, and you must pay your employees for time spent training.
Note: Be sure to understand your local laws around hiring and staffing and follow all requirements, both specific to cannabis brands, and general hiring/staffing rules. These could include procuring cannabis employment IDs, age requirements, background checks, and mandating attendance of certification training, payroll taxes, at-will parameters, and more.
How to create a dispensary org chart
At this point, you should understand New York cannabis laws and how to stay compliant.
Dispensaries cannot sell, deliver, or give away cannabis or cannabis products to anyone under the age of twenty-one, or any visibly intoxicated individual. Valid identification and proof of age is required.
As a reminder, here are the purchase limits for New York:
Adults 21+ can purchase up to 3 ounces of cannabis flower and up to 24 grams of concentrated cannabis (including oils, tinctures, edibles, and vapes) in a single day from licensed dispensaries.
Adults over the age of 21 can possess up to 3 ounces of marijuana flower and up to 24 grams of concentrated cannabis for personal use.
The Seed to Sale Tracking program chosen by the OCM is Biotrack.
License holders have an obligation to maintain up-to-date versions of all records and plans submitted with their application, or otherwise required by the Office. You must submit such records to the Office upon request and have an ongoing obligation to disclose any material changes to such records and plans.
Non-compliance may be grounds for a penalty or the surrender, suspension, revocation, or non-renewal of licenses.
Source cannabis products
Now’s when things really start getting fun: ordering and receiving your product! Since vertical integration (or having cultivation or processing licenses, plus a retail license) is not allowed in New York, you’ll need to find cannabis growers, manufacturers, and/or distributors to supply your store.
In New York, you are allowed to sell:
Cannabis products obtained from a distributor
Cannabinoid hemp products (if licensed to do so)
Stationary, gifts, and other minor incidentals
Branded merchandise and apparel containing the licensee’s brand, including jewelry and accessories (in adult sizes only)
Other items as approved by the Office
Licensees cannot sell:
Food or beverages that do not contain cannabis, except water
Tobacco or any product containing tobacco or nicotine
Any items that are commonly associated with—or marketed in a manner so as to be attractive to—individuals under twenty-one including, but not limited to, candy, toys, and games
Apparel or merchandise, including jewelry or other accessories, that reference a brand other than the licensee’s
As you look for suppliers in New York, there are several things to keep in mind:
- Think about your product mix and what products they carry.
- Investigate the taste and quality of the products, and their prices (including the ability to negotiate bulk discounts).
- Understand their fulfillment process, or how they get products to you and when. Can they handle your expected volume?
- Look into their testing processes and results, and reliability or reputation.
- You also need to ensure your suppliers are licensed facilities, as you cannot order supplies from unlicensed distributors.
Here are a few additional New York-specific product regulations around the dispensary and distributor relationship:
Distributors are required to sell cannabis products to any adult-use licensee willing to pay cash.
The Office reserves the right to investigate any sources of payment made by a dispensary to a distributor.
Distributors may, but are not required to, allow licensees to pay on credit. But all agreements to purchase cannabis on credit must be reported to the Office with the payment terms and credit. Licensees that pay on credit have 90 days to pay for that purchase of cannabis products. Distributors must report licensees to the Office who are delinquent in payment.
The Office reserves the right to invalidate agreements that it deems commercially unreasonable or where discriminatory pricing practices are suspected.
Licensees must keep dated records of all accounts payable and payments made, for purposes of contesting or validating such claims in dispute, and provide records upon request by the Office within 48 hours.
Intake and store inventory
Now that your inventory is starting to arrive at your store for opening day, you must “intake” those products the right way.
The Office requires all licensees to conduct an initial comprehensive inventory of all cannabis products in your possession on the date you first engage in the sale of cannabis to customers. You must report your initial inventory to the Office using Biotrack, the state inventory tracking system.
Your initial inventory should include damaged, defective, expired, or adulterated products awaiting disposal. Document the name, quantity, and reason you are maintaining the product.
This is your starting inventory, which must align with what products you ordered and received, what your point of sale software inventory says, and what your Biotrack details say. And after opening day, these sources of inventory information must always be in alignment.
Now you can stock your shelves and sell the product. But you’ll also need to develop SOPs, or controls and procedures, for intaking and auditing your inventory to ensure consistency and compliance long-term.
The Office requires you to:
Conduct a monthly inventory audit of all cannabis products
- At a minimum, you must record:
Name and signature(s) of the employee(s) who conducted the inventory audit.
Date of the audit
Summary of inventory findings
Any other information as determined by the Office
Notify the Office of any discrepancies identified during an inventory audit, no later than twenty-four hours after the discovery
Cannabis products must be stored in a secure, locked safe, vault, or other approved equipment or location within the licensed premises. A separate secure area shall be designated for temporary storage of cannabis products that require disposal.
Access to storage areas shall be restricted to authorized staff, employees or representatives of the Office, emergency personnel responding to an emergency, and others authorized by the licensee for the sole purpose of maintaining the operations of the facility.
Pro tip: Use this 📝 Inventory Intake SOP to document your processes!
New York has strict rules about how you track inventory. Licensees must use an inventory tracking system capable of compiling your product inventory, transaction data, and tax liability, and report real-time data to the Office.
Accurately record all inventory in the inventory tracking system
- Maintain real-time information, including:
Batch and/or lot unique identifiers for cannabis products to track each product you sell back to the source of cultivation and processing in the event of a recall
Completely inventory, as well as inventory adjustments from sales, disposal, product returns, or any other activities
Any other information as determined by the Office
Use an inventory tracking system that is capable of integrating with the Office’s seed-to-sale tracking system
Use a standard of measurement, as defined by the Office, that is supported by the inventory tracking system to track all cannabis product
- Track, at a minimum, the following data elements for each activity:
Weight, volume, or count of the cannabis products
Date of activity
Lot unique identifier assigned to the cannabis products
Identification of the working performing the action in the inventory tracking system
Type of activity being performed
Any other information as determined by the Office
Review your authorized users on a regular basis and remove users who are no longer employed, or who shall no longer be an authorized user
Conduct a monthly analysis of the inventory tracking system to determine that no software has been installed that could be used to manipulate or alter inventory or sales data
The use of any means to willfully underreport or overreport sales or manipulate inventory is prohibited and subject to penalties.
Packaging and label requirements
New York has a few specifications for cannabis product packaging and labels. Here’s what you need to know:
All products must be tested and labeled with their THC and CBD content.
All products given to consumers must ensure secure storage (i.e. be lockable) and be child-resistant.
Choose your network, hardware, and cannabis tech stack
Your technology stack is crucial to success as a cannabis business owner. Some are must-haves for compliance, like your security system and cannabis point-of-sale, while others are important to differentiate your store and create a great customer experience.
Here are some of the technology solutions you may want for your dispensary:
Printers (both letter-sized and receipts)
Computers (for staff work, like inventory)
Tablets or terminals
Compliant payment provider for non-cash transactions
Social media management and monitoring
You don’t need to invest in every possible cannabis-specific technology solution. But be sure to invest in tools that will help you achieve your sales goals, stay compliant, and satisfy modern shoppers.
📖 Read the Guide to Cannabis Tech Software for a complete list of top cannabis companies for your dispensary tech stack.
Market your dispensary
Ok, your store is ready, the team is trained, and you have inventory. Now you need to get the word out that your dispensary is opening soon.
Cannabis businesses notoriously have more challenges with marketing than traditional brands because of stigma, regulations, and the federal illegality of cannabis.
But there are still many marketing tactics you can use to promote your new dispensary:
Develop a beautiful, functional dispensary website. Enabling online ordering through your website is a great way to appeal to digital-friendly shoppers.
Fine-tune your social media presence (though be careful with what you post!).
Consider events to attract new customers into your store.
Make sure you’re in compliance of New York’s regulations around marketing, branding, and advertising:
All advertising materials, including billboards, flyers, social media, and websites, must contain a disclaimer stating that marijuana may be harmful to health.
Advertisements and branding must not appeal to or be targeted toward minors or show the consumption of marijuana.
Branding cannot use images, fonts, colors, or messages that would be attractive to individuals under twenty one years old.
Dispensaries may not acquire or record cannabis consumer personal information without consent, unless the information is typically acquired in a sales transaction.
Licensees may operate under a “doing business as” name.
Licensees cannot misrepresent their marijuana business as a medical cannabis dispensary.
Licensees must post or provide consumer education materials, as made available by the Office. Consumer education materials may take any form and must have a primary purpose of educating customers about safe consumption of cannabis products. If you make specific claims about products or studies, you must cite your sources.
Licensees cannot give away (including through donation) any cannabis products.
Licensees cannot advertise giveaways, discounts, price reductions, points-based reward systems, or customer loyalty programs including, but not limited to, using the words “sale”, “free”, “price drop”, or “discount” on a menu, in any communications to customers. This does not prohibit licensees from changing the price of cannabis products or otherwise “discounting” products.
Licensees cannot use a business name or refer to the licensed premises using the words “drugs”, “medicines”, “drug store”, “apothecary”, “pharmacy”, or similar.
How to choose a cannabis retail POS system
Your cannabis point of sale system is the single-most important tool in your stack. It is the central driver for compliance, inventory management, and customer satisfaction.
Every POS option is a little bit different — and not all work in every state — so be sure to do your homework before signing that dotted line.
What to look for in a cannabis POS:
State compliance tracking: State reporting (in New York’s case, Biotrack) is why software is so important. Look for an API integration that manages this all seamlessly to save you time and provide peace of mind.
Hardware compatibility: As mentioned above, make sure the software and hardware you choose are compatible. Pick a cloud-based software that doesn’t restrict hardware options so that you don’t incur any additional hardware costs or have to change hardware if you change point of sale systems later.
Customer support: Your ability to get up and running quickly is important, but getting your questions answered long-term is just as vital. As you look at different software, ask about the level of support you’ll receive.
Ease of use: Software that fuels your medical marijuana or adult-use retail stores must be easy and intuitive and staff need to learn it quickly. Pay attention to how the system functions and whether you think it’ll make your staff more productive.
Inventory management: You have requirements for managing inventory, as mentioned earlier. Make sure the POS you choose has all the capabilities you need (and then some).
Built-in compliance: Software isn’t just important for compliance related to state reporting (like Biotrack), it also should help you stay compliant with state marijuana laws, such as purchase limits. Make sure the software you choose has built in safeguards that address your market-specific needs.
Discrepancy reporting: Your Biotrack inventory, physical inventory, and point of sale inventory must always be aligned. If there is a discrepancy, you need to know about it and how to resolve it. Your software should include built-in tools to help you identify and resolve inventory discrepancies.
Activity tracking: In an industry with more loss and theft than others, it’s important to see what employee made what actions, and when those actions occurred, like making a sale, opening a drawer, moving inventory, etc.
Open API and integrations: Is the software compatible with other vendors? It’s important to consider integrations, especially if you’re interested in online menus, delivery, loyalty programs or other technology offered by partners.
Specialization: Consider the best software for each part of your business. If you have marijuana cultivation facilities, manufacturing facilities, and cannabis retail operations, it’ll be tempting to pick one software for it all. Better visibility is tempting — you can’t deny that — but all software is best at one thing. If you choose one for all, it means you’ll be putting the other two parts of your business at a disadvantage. Instead, look for vendors who integrate seamlessly.
Need help opening your dispensary?
Opening a dispensary in New York is quite an accomplishment. The market is very new and growing rapidly!
If you have any remaining questions about opening a dispensary in New York, our team of cannabis retail experts would be happy to support your journey.
Book a meeting with Flowhub to chat!