1. Understand regulatory and legal requirements. Do market research.

Research the laws and regulations governing adult-use or medical-use cannabis for more information about the regulatory requirements for licensure where you want to start your business.

Colorado Cannabis Legalization

In November 2000, 54% of Colorado voters approved Amendment 20, which amended the state Constitution to allow the use of marijuana in the state by approved patients with written medical consent. In November 2012, Colorado legalized marijuana for adults over age 21 by passing Amendment 64 to the Colorado Constitution.

The Colorado Department of Revenue provides regulatory oversight and licensing for the Medical and Retail Marijuana industries across the state through the Marijuana Enforcement Division.

Colorado Cannabis Market

  1. Decide the type of cannabis business. Choose a location. Check local zoning regulations.

Cannabis Licenses Types Available in Colorado

Currently there are 8 medical and 8 retail (recreational or adult-use) cannabis licenses available in Colorado. More information can be found in the latest regulations and we provide retail licenses below.

“Means an entity licensed to cultivate, prepare, and package Retail Marijuana and sell Retail Marijuana to Retail Marijuana Stores, to Retail Marijuana Products Manufacturers, and to other Retail Marijuana Cultivation Facilities, but not to consumers.”

Tier 1 (1-1,800 plants); Tier 2 (1,801-3,600 plants); Tier 3 (3,601-6,000 plants); Tier 4 (6,001-10,200 plants); Tier 5 (10,201-13,800 plants).

(application fee $5,000; initial license fee for Tier 1: $2,200 (Level 1), $4,550 (Level 2), $6,900 (Level 3); renewal application and license fee: $2,300 (Tier 1) – $8,900 (Tier 5))

“Means an entity licensed to purchase Retail Marijuana; manufacture, prepare, and package Retail Marijuana Product; and Transfer Retail Marijuana, Retail Marijuana Concentrate, and Retail Marijuana Product only to other Retail Marijuana Products Manufacturers, Retail Marijuana Stores, Retail Marijuana Hospitality and Sales Businesses and Pesticide Manufacturers.”

(application fee $5,000; initial license fee: $2,200 (Level 1), $4,550 (Level 2), $6,900 (Level 3); renewal application and license fee $2,300)

“Means an entity licensed to purchase Retail Marijuana and Retail Marijuana Concentrate from a Retail Marijuana Cultivation Facility and to purchase Retail Marijuana Product and Retail Marijuana Concentrate from a Retail Marijuana Products Manufacturer, and to Transfer Retail Marijuana to Retail Marijuana Hospitality and Sales Businesses and to consumers.”

How to Open a Dispensary or Retail Store in Colorado?

(application fee $5,000; initial license fee: $2,850 (Level 1), $5,550 (Level 2), $8,200 (Level 3); renewal application and license fee $2,300)

“Means a facility, which may be mobile, licensed to permit the consumption of marijuana.”

(application fee $1,000; initial license fee $1,350; renewal application and license fee $1,300)

“Means a facility, which cannot be mobile, licensed to permit the consumption of only the retail marijuana or retail marijuana products it has sold pursuant to the provisions of an enacted, initiated, or referred ordinance or resolution of the local jurisdiction in which the licensee operates.”

(application fee $5,000; initial license fee $2,850; renewal application and license fee $2,300)

“Means an entity or person that is not an owner and that is licensed to provide professional operational services to a marijuana business for direct remuneration from the Marijuana Business(es). A Marijuana Business Operator is not, by virtue of its status as a marijuana business operator, a controlling beneficial owner or a passive beneficial owner of any marijuana business it operates.”

(application fee $1,000; initial license fee: $2,950 (Level 1), $4,700 (Level 2), $6,400 (Level 3); renewal application and license fee $3,200)

“Means an entity licensed to analyze and certify the safety and potency of marijuana.”

(application fee $1,000; initial license fee: $2,000 (Level 1), $3,250 (Level 2), $4,500 (Level 3); renewal application and license fee $2,300)

“Means a Person licensed to transport Retail Marijuana from one Retail Marijuana Business to another Retail Marijuana Business or to a Pesticide Manufacturer, and to temporarily store the transported Retail Marijuana at its Licensed Premises, but is not authorized to sell, give away, buy, or receive complimentary Retail Marijuana under any circumstances. A Retail Marijuana Transporter does not include a Licensee that transports and distributes its own Retail Marijuana.”

(application fee $1,000; initial license fee $5,850; renewal application and license fee $6,100)

The levels are:

  • Level 1: 1 to 4 Controlling Beneficial Owners.
  • Level 2: 5 to 9 Controlling Beneficial Owners.
  • Level 3: 10 or more Controlling Beneficial Owners.

Cannabis Delivery in Colorado

In 2019 Colorado legislators passed HB19-1234, effectively regulating cannabis delivery in the state. Delivery of both medical and recreational cannabis is allowed through a third-party fulfillment contractor. Delivery of medical cannabis began in 2020 and recreational cannabis in January 2021. Delivery permit fees:

  • initial license fee $5,250;
  • renewal license fee $2,650.

Cannabis Courier Service by State

  1. Develop a solid cannabis business plan. Secure financing.

Application requirements include a business plan demonstrating a likelihood of success and sufficient business ability and experience on the part of the applicant. A typical cannabis business plan outline includes sections such as Executive Summary, Market Overview, Sales Strategy, Operating Plan, Organizational Structure (+ Diversity Plan) and Financial Plan.

'70% ready to go' business plan templates

We offer a wide range of '70% ready-to-go' cannabis business plan templates that will help you prepare a professional cannabis business plan document supported with expert financials and an investor pitch deck. All our templates are completely open and editable and you can use Word, Excel and PowerPoint to work with them.

  1. Prepare the required documents. Pay application and license fees. Submit applications.

Applications for all medical and retail marijuana facility licenses or certifications can be submitted electronically through a department-provided, web-based application system, by mail or in-person. An applicant shall provide information in a form and manner as prescribed by regulations, which may include, but is not limited to the following:

  • A copy of the local license application, if required, for a Regulated Marijuana Business.
  • Certificate of Good Standing from the jurisdiction in which the Entity was formed, which must be one of the states of the United States, territories of the United States, District of Columbia, or another country that authorizes the sale of marijuana.
  • If the Applicant is an Entity, the identity and physical address of its registered agent in the state of Colorado.
  • Organizational Documents. Articles of Incorporation, by-laws, and any shareholder agreement for a corporation; articles of organization and operating agreement for a limited liability company; or partnership agreement for a partnership.
  • Corporate Governance Documents. a. A Regulated Marijuana Business that is a Publicly Traded Corporation must maintain corporate governance documents as required by the securities exchange on which its securities are listed and traded, and section 44-10103(50), C.R.S., and must provide those corporate governance documents with each initial application. b. A Regulated Marijuana Business that is not a Publicly Traded Corporation is not required to maintain any corporate governance documents. However, if the Regulated Marijuana Business that is not a Publicly Traded Corporation voluntarily maintains corporate governance documents, the Division encourages inclusion of such documents with each initial application.
  • The deed, lease, sublease, rental agreement, contract, or any other document(s) establishing the Applicant is, or will be, entitled to possession of the premises for which the application is made.
  • Legible and accurate diagram for the facility. The diagram must include a plan for the Licensed Premises and a separate plan for the security/surveillance plan including camera location, number and direction of coverage.
  • All required findings of suitability issued by the Division.
  • Consolidated Financial Statements (Must provide Balance Sheet, Income Statement & Cash Flow Statement for the previous calendar year), including auditors reports and footnotes, if applicable.
  • A copy of any contracts, agreements, royalty agreements, equipment leases, financing agreement, security contract or any other IFIH required to be disclosed.
  1. Obtain the required licenses, including local authority license.

Keep in mind that before your marijuana business can begin operating, you must also obtain a license from the local licensing authority within whose jurisdiction you intend to operate. You can begin the process of applying for a license with your local licensing authority at the same time you obtain your state marijuana business license.

  1. Register your business as an employer and a tax payer.

Anyone operating a business within the State of Colorado is required to meet specific state and Federal Labor and Employment requirements.

  1. Keep track of your ongoing compliance requirements.

Physical security measures, good production practices, packaging, labelling, transport and reporting requirements, taxes and more.

Renewal requests must be submitted in a department-provided, web-based application system at least 30 days, but no sooner than 90 days, prior to expiration.

Colorado Cannabis Taxes

Retail marijuana is subject to retail marijuana excise tax and a retail marijuana sales tax. A 15% state excise tax is imposed on the first sale or transfer from a retail marijuana cultivation facility to a retail marijuana store or retail marijuana product manufacturing facility. Retail marijuana cultivation facilities are required to pay the retail marijuana excise tax based on either 15% of the Average Market Rate (AMR) or 15% of the contract price of the retail marijuana. Medical marijuana is not subject to excise tax. The retail marijuana sales tax is imposed on the sale of retail marijuana to a consumer; the sales tax rate is 15%. The marijuana license types that are required to collect and report marijuana sales tax are “retail marijuana stores” and “retail marijuana hospitality & sales” establishments.

Colorado became the first state to approve 280E deductions in 2014, that allows cannabis companies to deduct business expenses from their state income taxes.


Main steps in short

  • Understand regulatory and legal requirements. Do market research.
  • Decide the type of cannabis business. Choose a location. Check local zoning regulations.
  • Develop a solid business plan. Secure financing.
  • Prepare the required documents. Pay application and license fees. Submit applications.
  • Obtain the required licenses, including local authority license.
  • Register your business as an employer and a tax payer.
  • Keep track of your ongoing compliance requirements.

'70% ready to go' business plan templates

Our cannabis financial models and cannabis business plan templates will help you estimate how much it costs to start and operate your own cannabis business, to build all revenue and cost line-items monthly over a flexible seven year period, and then summarize the monthly results into quarters and years for an easy view into the various time periods. We also offer investor pitch deck templates.

Best Selling Templates