Medical Cannabis Dispensary Laws: Fees and Taxes

Many patients believe medical cannabis should not be subject to taxation, because paying taxes on medicine can pose a hardship. The financial burden is compounded by the fact that medical cannabis is not covered by insurance. While sales taxes generally do not apply to prescription medications, most states’ sales taxes apply to cannabis, because it cannot be prescribed due to federal law. Instead, it is recommended by doctors, or patients receive “certifications.”

In addition to tax revenue, in most or all states with regulated dispensaries, the application and registration fees levied on medical cannabis businesses cover or exceed regulatory costs. Nonrefundable dispensary application fees generally range from $1,000 to $5,000, with registration or annual fees typically between $5,000 and $20,000. While medical cannabis business fees should not be so low that they encourage frivolous applications, it is important that they are not prohibitively high. Costs may be passed on to patients, who are already struggling.

State	Application and/or Registration Fees	Taxes
Alabama	The commission will charge non-refundable application fees of $2,500 and will set licensing fees between $10,000 and $50,000.	9% gross proceeds tax levied on medical cannabis retail sales and an annual privilege tax levied on those doing business under the law
Alaska	No medical-specific licensing; only adult-use businesses are licensed	Not medical-specific; adult-use sales are subject to $50/ounce excise taxes on flower (buds)
Arizona	$5,000 application fee, $1,000 for renewal	5.6% sales tax, plus local taxes
Arkansas	Application fee for cultivation facilities: $15,000 License and renewal fee for cultivation facilities: $100,000 License fee for dispensaries: $15,000 Renewal fee for dispensaries: $22,500	All medical marijuana businesses pay a 4% tax on sales; standard 6.5% state sales tax and local taxes apply
California	Application fee for testing labs, distributors, and retailers: $1,000 Annual license fee for testing labs: $3,000 - $112,000 Annual license fee for distributors: $1,500 - $240,000 Annual license fee for retailers: $2,500 - $96,000 Note: For the license classes above, fees vary based on gross revenue of business. Application fee for cultivators: $135 - $8,655 Annual license fee for cultivators: $1,205 - $77,905 Note: For cultivators, fees vary based on size and type of operation.	$9.25/ounce excise on flower, 15% retail excise tax, state sales tax, and local taxes; patients with government-issued medical cannabis IDs can have sales taxes waived, but not the excise taxes
Colorado	Applications: $6,000 to $14,000 for medical marijuana centers; $1,000 for infused product manufacturers Registrations: $3,000 to $11,000 for centers; $2,200 for infused product manufacturers Renewals: $3,300 to $11,300 for centers; $2,500 for infused product manufacturers	2.9% state sales tax, also local taxes
Connecticut	Applications: $1,000 for dispensaries; $25,000 for producers Permit and annual renewal fees: $5,000 for dispensaries; $75,000 for producers	Medical marijuana sales are not taxed
Delaware	$5,000 compassion center application fee $40,000 certification and biennial renewal fee	Gross receipts tax if above $1.2 million in revenue
Florida	Application fee for dispensing organizations (which may cultivate, process, and dispense): $60,063 License renewal fee: $60,063 renewal fee biennially	6% state sales tax, plus any local tax
Hawaii	Application fee: $5,000 Initial license fee: $75,000 License renewal fee: $50,000 Testing facility certification fee: $3,000 Testing facility certification renewal fee: $3,000	4% (standard general excise tax) for most islands, 4.5% on Oahu
Illinois	Applications: $5,000 for dispensary centers; $25,000 for cultivation centers License fees: $30,000 per dispensary; $200,000 per cultivation center Annual renewal fees: $25,000 per dispensary; $100,000 per cultivation center	7% excise tax at wholesale level and 1% sales tax
Louisiana	Medical marijuana pharmacy application fees: $450 total (new pharmacy fee, CDS permit fee, prescription monitoring fee, and administrative hearing fee) Cultivator fees: $100,000 annually for the license, $100 annually for the license, plus up to 7% of gross sales	5% standard state sales taxes (per a Dept. of Revenue interpretation)
Maine	$15,000 application fee, $14,000 refunded to applicants that aren’t chosen; $15,000 renewal fee	5% sales tax and 7% meals and rooms tax on edible products
Maryland	Application fees (in two stages): for growers and for processors $6,000; for growers/dispensaries: $11,000; for dispensaries only: $5,000 Annual license fees: for growers: $125,000; for dispensaries/growers: $165,000; for processors: $40,000; for dispensaries: $40,000	Medical marijuana sales are not taxed; state sales tax does not apply to medicine
Massachusetts	$1,500 stage 1 application fee; $30,000 stage 2 application fee; $50,000/year license registration fee	Medical marijuana sales are not taxed
Michigan	Application fee: $6,000 Annual regulatory assessment fee: $10,000-$66,000	3% excise tax at point of sale plus 6% standard sales tax
Minnesota	$20,000 manufacturer application fee; the annual fee is expected to be between $75,000 and $100,000	Medical marijuana sales are not taxed
Missouri	Cultivation facilities application fee: $10,000 Cultivation facilities annual fee: $25,000 Dispensary facilities application fee: $6,000 Dispensary facilities annual fee: $10,000 Manufacturing facilities application fee: $6,000 Manufacturing facilities annual fee: $10,000	4% retail sales tax
Montana	Dispensary license: $500 Provider license fees (based on number of patients served): 1-10 patients: $1,000 11-50 patients: $2,500 50 + patients: $5,000	2% on gross sales
Nevada	$5,000 medical marijuana establishment application fee $3,000 cultivation facility certification fee $3,000 edible marijuana products or marijuana-infused product establishment certification fee $5,000 independent testing laboratory certification fee $30,000 medical marijuana dispensary certification fee	6.85% to 8.1% state and local sales tax likely applies, in addition to a 2% excise tax for wholesale sales and 2% excise tax for retail sales
New Hampshire	$3,000 request for application fee Annual registration: $80,000 or $40,000 (payable in stages), depending on the center’s geographic area	Medical marijuana sales are not taxed; New Hampshire does not have a sales tax
New Jersey	$20,000 dispensary fee each year, $2,000 for unsuccessful applicants	7% sales tax
New Mexico	$1,000 application fee for producers, annual producer fee from $5,000 to $30,000	Gross receipts tax (5.125% to 8.8675% depending on location in state)
New York	$10,000 application fee; $200,000 registration fee for two-year registration period	7% excise tax, 7% sales tax
North Dakota	$5,000 non-refundable application fee; $25,000 licensing fee	5% state sales tax, plus any local tax
Ohio	Cultivator Level I application fee: $20,000 Cultivator Level I initial license fee: $180,000 Cultivator Level I renewal fee: $200,000 Cultivator Level II application fee: $2,000 Cultivator Level II initial license fee: $18,000 Cultivator Level II renewal fee: $20,000 Processor application fee: $10,000 Processor initial license fee: $90,000 Processor renewal fee: $100,000 Dispensary application fee: $5,000 Dispensary biennial license fee: $70,000 Testing lab application fee: $2,000 Testing lab initial license fee: $18,000 Testing lab renewal fee: $20,000	5.75% state sales tax, plus any local tax
Oklahoma	Application fee: $2,500	7% retail sales tax on medical cannabis, regular states taxes (4.5%) and local sales taxes
Oregon	$250 application fee; $1,000/year license fee	Medical marijuana sales are not taxed; Oregon does not have a sales tax
Pennsylvania	Applications: $5,000 non-refundable fee for dispensaries; $10,000 for growers/processors Licenses: $30,000 for each dispensary location (with a $5,000 renewal); $200,000 for grower/processors ($10,000 renewal)	Growers/processors pay 5% tax on sale of medical cannabis
Rhode Island	$250 application fee; $500,000 annual registration fee	4% surcharge; 7% state sales tax
South Dakota	Fees to be determined by the Department of Health. Measure 26 states that application fees for medical cannabis establishments may not exceed $5,000 (adjusted annually for inflation).	Medical marijuana sales are not taxed
Utah	$50,000 to $69,500 depending on if it is urban, rural, or home delivery.	Medical marijuana sales are not taxed
Vermont	$2,500 application fee $20,000 or $30,000 annual fee	Medical marijuana sales are not taxed
Virginia	$10,000 application fee $60,000 initial permit fee $10,000 annual renewal fee	Medical marijuana sales are not taxed
Washington State	Producer application fee: $250 Producer annual fee: $1,480 Processor application fee: $250 Processor annual fee: $1,480 Retailer application fee: $250 Retailer annual fee: $1,480 Note: Fees are for adult-use licenses; to be a medical marijuana business, an entity must have an adult-use license and apply for a medical marijuana endorsement.	37% excise tax on retail sales
West Virginia	Grower and processor application and registration fee: $55,000 ($50,000 is refunded if the application is denied) Dispensary application and registration fee: $12,500 ($10,000 is refunded if the application is denied)	10% tax on sales to dispensaries

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Medical Cannabis Dispensary Laws: Fees and Taxes

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