How to Start a Cannabis Business in Washington DC?

Understand regulatory and legal requirements. Do market research.

Washington DC Cannabis Legalization

Medical cannabis was legalized in 1998 following the passage of Initiative 59 with the first dispensary opened in 2013. On March 22, 2023, the Medical Cannabis Amendment Act of 2022 (MCAA), signed by Mayor Muriel Bowser in January 2023, became law. The Act overhauls DC’s medical cannabis program. Among other things, the MCAA creates new license categories, including cultivation centers, manufacturers, retailers, internet retailers, testing laboratories, couriers, authorizes licensees to apply for “endorsements” such as on-site consumption and delivery for retailers, allows for vertical integration with some restrictions.

In just nine months of 2025, medical cannabis sales have already totaled $42 million which is equivalent to 130% of the total sales for 2024. Cannabis sales reached their peak in May 2025, hitting $5.8 million, with an average in-store sale of $78 and an average delivery sale of $154.

Washington DC Cannabis Market

Although the recreational use and possession of cannabis by individuals 21 years of age or older was legalized in 2015, obtaining a license to manufacture or retail recreational cannabis must await the development of a system for regulating and taxing cannabis products.

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

Washington DC Cannabis Licenses

Alcoholic Beverage and Cannabis Administration (ABCA) offers six medical cannabis business licenses including Courier, Cultivation Center, Internet Retailer, Manufacturer, Retailer, and Testing Laboratory, and one medical cannabis business permit for a Certification Training Provider.

The following limitations apply to possessing multiple licenses:

A single licensee can possess no more than two cultivation center licenses.
A single licensee can possess no more than the combined number of three retailer/internet retailer licenses.
A cultivator licensee may not hold more than one retail or internet retailer license.
A testing laboratory licensee may not hold a cultivation center, manufacturer, retailer, internet retailer, or courier license.
No licensee holding a retailer, internet retailer, cultivation center, testing laboratory, or manufacturer license may hold a courier license.

Courier

Courier – Permits the third-party delivery of medical cannabis, medical cannabis products, and paraphernalia on behalf of licensed retailers and internet retailers to eligible patients and their caregivers. Deliveries are required to be made to residential and commercial building addresses located in the District that are not on District government or Federal property or on public or private school grounds, with the exception of deliveries to individuals at colleges and universities who are 21 years of age or older.

(standard application fee $5,000; standard license fee $8,000)

Cultivation Center

Cultivation Center – Permits the growing of cannabis for sale to licensed Retailers in DC for resale to eligible patients.

Tier 1=Mature cannabis plant grow canopy area greater than 0 sq ft but no more than 10,000 sq ft
Tier 2=Mature cannabis plant grow canopy area greater than 10,000 sq ft but no more than 25,000 sq ft
Tier 3=Mature cannabis plant grow canopy area greater than 25,000 sq ft but no more than 50,000 sq ft
Tier 4=Mature cannabis plant grow canopy area greater than 50,000 sq ft but no more than 75,000 sq ft
Tier 5=Mature cannabis plant grow canopy area greater than 75,000 sq ft but no more than 100,000 sq ft
Tier 6=Mature cannabis plant grow canopy area greater than 100,000 sq ft

(standard application fee $8,000; standard license fee: Tier 1 – $11,000, Tier 2 – $16,000, Tier 3 – $21,000, Tier 4 – $26,000, Tier 5 – $31,000, Tier 6 – $36,000)

Internet Retail

Internet Retailer – Internet Retailer License permits businesses that do not have a physical location open to the public to sell cannabis and paraphernalia online and by mobile application for delivery to eligible patients. Deliveries are permitted to be conducted by either licensed third-party couriers or internet retailer staff.

(standard application fee $8,000; standard license fee $16,000)

Manufacturer

Manufacturer – Permits the processing, packaging, and labeling of medical cannabis products for sale and distribution to licensed retailers and internet retailers in DC for resale to eligible patients and caregivers.

(standard application fee $4,000; standard license fee: Type 1 – Manufacturing Only $4,000, Type 2 – Manufacturing and Extraction $8,000)

Retail

Retailer – Permits the dispensing of medical cannabis and medical cannabis products to eligible patients and caregivers. Permits Retailers to manufacture, purchase, and sell paraphernalia. Retailers are eligible to request any combination of license endorsements to expand their business operations.

(standard application fee $8,000; standard license fee $16,000)

Testing Laboratory

Testing Laboratory – Permits the testing of medical cannabis and medical cannabis products and provides testing results to licensed cultivation centers and manufacturers.

(standard application fee $0; standard license fee $7,500)

Conditional

Provides a license to applicants without a proposed location. Applicants have up to one year to secure a location and provide ABCA with all required documents and fees. Available for all license types.

Four business license endorsements are also available for licensed retailers. To add the permission, licensed retailers must submit a Medical Cannabis Endorsement Application.

Delivery

Medical Cannabis Delivery Endorsement permits medical cannabis, medical cannabis products, and paraphernalia to be delivered to eligible patients and their caregivers at residential and commercial building addresses located in the District that are not on District government or Federal property or picked up curbside at the retailer’s physical location.

(standard application fee $300; standard license fee $300)

Education Tasting

Medical Cannabis Education Tasting Endorsement permits the offering of cooking and how-to classes and demonstrations, and tastings for educational purposes.

(standard application fee $130; standard license fee $130)

Safe-Use Treatment Facility

Medical Cannabis Safe Use Treatment Facility Endorsement permits the on-premises consumption of medical cannabis and medical cannabis products purchased on-site at the retailer within designated areas.

(standard application fee $1,000; standard license fee $2,000)

Summer Garden

Medical Cannabis Summer Garden Endorsement permits the sale, service, and on-premises consumption of medical cannabis and medical cannabis products within a private outdoor space.

(standard application fee $300; standard license fee $300)

Washington DC Weed Delivery

All three cannabis delivery business models are available under the MCAA in Washington DC, including a licensed retailer with an add-on delivery service, an internet retailer without a storefront dispensary, and a courier service to deliver of medical cannabis products, and paraphernalia on behalf of licensed retailers and internet retailers to eligible patients and their caregivers.

For more information on cannabis delivery business options in other states, please visit the following links:

Cannabis Delivery Business by State
Cannabis Courier Business by State
Cannabis Non-Storefront Business by State

Develop a solid cannabis business plan. Secure financing.

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'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.

Prepare the necessary documentation. Pay fees.

This should include a valid zoning determination letter from the DOB Zoning Administrator and a security plan among other required documents. Check ABCA medical cannabis business license application checklist here.

Obtain required state licenses. Pay fees.

Keep track of your ongoing compliance requirements.

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

Washington DC Cannabis Taxes

The rate of tax is 6% of the gross receipts from the sale of or charges for medical cannabis, as defined in § 7-1671.01(12), except for sales or charges occurring during “4/20 Medical Cannabis Sales Tax Holiday Week” subject to special bills signed in a given year.

Medical cannabis businesses in Washington DC are exempt from applying rules of 280E section under state tax law, so the businesses can also deduct business expenses other than cost of goods sold.

Cannabis Advertising Regulations in Washington DC

(A) Advertisements relating to medical marijuana shall not be displayed on the exterior of any window or on the exterior or interior of any door. No sign advertising medical marijuana on the exterior or visible from the exterior of any registered establishment or elsewhere in the District shall be illuminated at any time.

(B) A registered cultivation center or dispensary shall not use any picture or illustration that depicts a child or immature person, or objects (such as toys), suggestive of the presence of a child, and any statement, design, device, picture, or illustration designed to be especially appealing to children or immature persons.

(C) A statement that is known by the dispensary, cultivation center, or testing laboratory to be false or misleading with respect to advertised price charged to the qualifying patient, ingredients of medical marijuana, source of manufacturer, or statements as to health benefits, shall be prohibited.

(D) A statement that encourages the use or purchase of medical marijuana without a registration card shall be prohibited.

(Chapter 22-C58 – ADVERTISING)

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 necessary documentation. Pay fees.
Obtain required state licenses. Pay fees.
Register your business as an employer and a tax payer.
Keep track of your ongoing compliance requirements.