Starting a Medical vs. Recreational Marijuana Business
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Starting a Medical vs. Recreational Marijuana Business

Here are some considerations to make if you’re interested in starting a medical or recreational marijuana business in your area.

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Photo by Budding . on Unsplash

Several U.S. states passed legislation to legalize medical marijuana recently, and some have passed laws to allow the recreational use of the plant.

States can determine who may cultivate, distribute and use marijuana. For example, Florida allows residents to apply for a medical marijuana card to legally purchase the substance from state-regulated dispensaries. You might wonder if starting a medical or recreational marijuana business is possible in your state.

Take a deeper look at the similarities and differences between medical and recreational marijuana. Here are some considerations to make if you’re interested in starting a medical or recreational marijuana business in your area.

Medical vs. Recreational Marijuana Dispensaries

The two categories of cannabis for adult use are medical and recreational. Although they have different names, the two types of cannabis are the same since they’re considered legal categories. What are the similarities and differences between medical vs. recreational marijuana?


  • Only people 21 or over can purchase adult-use cannabis products, depending on the state in which they live.
  • Both are produced from the same plant and are of the same quality. However, strength and caliber can vary among states.
  • Medical and recreational marijuana is illegal under federal law.
  • Both types must undergo testing for pesticides and cannabinoid potency.


  • Both types are used for different purposes (medicinal vs. recreational)
  • States’ taxation and purchase limits differ between the two types.
  • Medical weed is legal in more than 30 states, while recreational is legal in 19.
  • States often legalize medical marijuana before recreational.
  • Anyone can buy weed from a recreational dispensary, while residents in medical-only states must enroll in the state’s cannabis program to purchase marijuana.

Medical and recreational marijuana products are very similar. However, knowing these important differences is crucial if you want to open a medical or recreational dispensary business.

How to Open a Marijuana Dispensary

Entering the cannabis industry seems daunting. However, with a few tips, you’ll be able to start your path to a lucrative career choice. Below are the steps to follow if you’re looking to start a medical or recreational marijuana business in the U.S.

1. Choose the Type of Business

Do you want to own a recreational or medical marijuana dispensary? Understanding what is legal in your state is crucial before bringing your business idea to life. Spend time researching laws and regulations before making any decisions. Feel free to contact other cannabis businesses for guidance.

2. Create a Business Plan

All new businesses require a well-thought-out business plan. You will need more details when entering the cannabis space since it’s such a strictly regulated industry. Your plan must be flexible and able to change with the laws in your state. Include important information like costs, marketing tactics, location and potential suppliers.

3. Register Your Business and Enroll to Pay Taxes

The marijuana industry is a prime space for small, local businesses to enter. Choose an entity that’s right for your goals, whether an LLC or a corporation. Conduct a search to determine a name for your company, and be sure to create an original name so you don’t copy anyone else. Apply for an employer identification number (EIN) from the IRS so you’re ready to pay taxes once tax season comes around.

4. Obtain Licenses and Permits

Now is a good time to contact a legal specialist to help obtain the necessary licenses and permits for your dispensary. They will guide you through the process of applying for documentation. In addition to cannabis-specific guidelines, you’ll also have to take on many of the same tasks other businesses are required to do, like applying for insurance and investing in technology and employees.

5. Acquire Funding

You’ll also need to acquire funding to cover your upfront business expenses. A marijuana company will likely require more capital than a traditional one. Consider approaching investors or lenders to help you get started. Be sure to present a detailed plan to increase the amount of funding and likelihood of receiving investments from interested parties.

Entering the Cannabis Industry

The marijuana industry, both medical and recreational, is still in its infancy. Starting a business in the space will present challenges to even the most seasoned business owners. Be sure to follow all the regulations in your state and seek guidance from experienced legal counsel.

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This article has not been reviewed by Odyssey HQ and solely reflects the ideas and opinions of the creator.

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