How to Open a Dispensary in Louisiana

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  2. How to Open a Dispensary in Louisiana

Interested in starting a Cannabis business in Louisiana?

How to Open a Dispensary in Louisiana in 2024

To open a therapeutic marijuana pharmacy (medical cannabis dispensary) in Louisiana, ypu must apply to the state's Board of Pharmacy for a marijuana pharmacy permit. The cost of opening a medical marijuana dispensary in the state varies, depending on several factors. The Board of Pharmacy requires a prospective marijuana pharmacy owner to submit a blueprint of the proposed dispensary as part of the permit application process. Similarly, applicants must submit documentation of compliance with local zoning regulations in the proposed locations for their pharmacies.

Why Open a Dispensary in Louisiana?

Reports show that the number of registered medical marijuana patients in Louisiana in the second quarter of 2022 was nearly 35,000. That was almost three times the number recorded in the second quarter of 2021. According to a 2020 annual report by the state's Medical Marijuana Program, the nine medical marijuana pharmacies in Louisiana received almost 49,000 retail cannabis products. In 2019, less than 17,000 retail products were shipped to these pharmacies. In the 2021 calendar year (January to December 2021), over 228,000 retail marijuana products were shipped to all nine medical cannabis pharmacies in the state.

The demand for medical cannabis in Louisiana keeps growing, which is why anyone may want to consider opening a medical marijuana dispensary there. In the 2022 Regular Session, the state legislature passed House Bill 697, raising the number of allowed therapeutic marijuana pharmacy locations, including satellite locations, from 10 to 30.

Types of Dispensary Licenses in Louisiana

Louisiana issues a therapeutic marijuana pharmacy permit as its medical cannabis dispensary licenses. With this permit, a person or entity may only source pharmaceutical-grade marijuana products from producers licensed by the Louisiana Department of Agriculture and Forestry (LDAF) and sell them to registered medical cannabis patients.

How to Get a Louisiana Dispensary License

  • Prepare all information required for the application and the necessary documents in digital format
  • Open the eLicense Online Portal maintained by the Louisiana Board of Pharmacy
  • The applicant should register a new account for each proposed medical marijuana pharmacy location for which they intend to submit an application
  • The applicant will receive a verification email, after which they are required to login to the eLicense Online Portal
  • Set up the new account by following the prompts
  • Click the Create/Resume an Application tab and select the Application for Therapeutic Marijuana Pharmacy

The Louisiana Board of Pharmacy (LABP) will not review or process any application not submitted through the eLicense Online Portal. However, the board is currently not accepting applications for therapeutic marijuana pharmacy licenses. The last application window for dispensary permits in the state opened on August 4, 2022, and closed on September 4, 2022. As of October 2023, the LABP has 10 state-licensed dispensary locations in different regions.

The LABP considers the following in awarding a therapeutic marijuana pharmacy permit:

  • The location of the proposed dispensary, whose qualifying patient population must justify the need for a medical marijuana pharmacy
  • The fitness and character of the owner, the pharmacist-in-charge, or any other individual who may be put in charge of the proposed dispensary
  • The extent of financial interests the applicant owns in any other permittee or applicant currently or previously credentialed by the LABP

Information and Documents Required for a Dispensary License in Louisiana

  • Information or document sufficient to prove the applicant is authorized to operate a business in Louisiana and that they will meet all local ordinances and applicable state and local zoning, fire, and building requirements
  • A comprehensive description of the products they intend to sell and any other services they want to offer
  • The proposed therapeutic marijuana pharmacy blueprint
  • Information about the applicant's plan to maintain adequate control against the loss, diversion, or theft of cannabis products
  • Any information or document needed by the LABP to determine the applicant's ability to protect the public's health and safety
  • Graphic and text materials showing the appearance of the proposed dispensary and its conformity with existing residential or commercial structures or those under construction at the proposed location of the cannabis pharmacy

Applicants are also advised to review the application text before completing their online application for Louisiana therapeutic marijuana pharmacy licenses

What Plans Do You Need to Open a Dispensary in Louisiana?

A business plan is essential for any proposed marijuana dispensary. Generally, having a business plan before applying for a therapeutic marijuana pharmacy license in Louisiana helps to outline the proposed dispensary's strategies, goals, and financial projections. In addition, it can assist in raising the required funds to open the pharmacy if needed. A Louisiana medical marijuana pharmacy's business plan should contain the following details:

  • Executive summary, which is just like an overview of the entire dispensary business and the details surrounding it
  • A detailed description of the pharmacy, including the following:
  • Goals
  • Target customers
  • The types of products or services they will offer. Details should include the following:
  • How the products will meet customers' needs
  • How to ensure consumers make repeat purchases
  • Information on the dispensary's organization and management team identifying the following:
  • The pharmacy structure, including the legal structure
  • Who will be in charge of running the dispensary and their skills
  • Hierarchy in decision-making
  • Employees' job description
  • Financial projections, which must show the following details:
  • Capital expenditure budgets
  • Forecasted cash flow
  • Projected income and loss
  • Projected balance sheet
  • Marketing and sales plan, which is expected to show the following information:
  • Strategies to achieve market share and the estimated cost to execute them
  • The pharmacy's branding

Besides having a business plan, the Louisiana Board of Pharmacy requires an applicant to provide a blueprint of their proposed therapeutic marijuana pharmacy, which must identify the following:

  • The square footage of the entire dispensary facility
  • The location and square footage of areas used as stockrooms and storerooms
  • The square footage of the space that will be used as the prescription department
  • The location of all approved vaults and safes to be used for cannabis storage
  • The location of toilet facilities
  • The location and size of the space to be used as a patient counseling room

Are There Municipal Requirements for Opening a Cannabis Dispensary in Louisiana?

All Louisiana municipalities allow marijuana businesses, including establishing therapeutic marijuana dispensaries, within their boundaries. However, it is essential to find out the local regulations regarding the locations where dispensaries can be situated in a municipality in relation to restricted places before opening a cannabis pharmacy. The Louisiana Board of Pharmacy requires prospective dispensary owners in the state to provide documentation of compliance with local land use and zoning regulations as part of the dispensary license application process.

How Long Does It Take to Get a Louisiana Dispensary License?

It can take several months to obtain the LABP's approval for a therapeutic marijuana pharmacy license application in Louisiana. However, once awarded a marijuana pharmacy permit, the licensee must begin operations within 310 days of the award. Otherwise, the LABP, in its discretion, may rescind the pharmacy permit unless the delay in opening was caused by force majeure.

Where Can You Locate a Cannabis Dispensary in Louisiana?

In Louisiana, no therapeutic marijuana pharmacy may be situated within a 15-mile radius of another dispensary except in the following instances:

  • In a region that contains any municipality with a population of over 350,000 people, no therapeutic marijuana pharmacy may be situated within a 5-mile radius of another marijuana pharmacy
  • In a region that encompasses any parish with more than 350,000 inhabitants, no marijuana dispensary may be located within a 10-mile radius of another medical marijuana pharmacy

Can Licensees Have More Than One Dispensary Location in Louisiana?

Yes, therapeutic marijuana pharmacy licensees in Louisiana can have more than one pharmacy location within the state. However, no more than three licenses/locations per licensee are permitted. In a region, once 3,500 active, qualified cannabis patients have been identified in the state's prescription monitoring program, the LABP will permit the marijuana pharmacy licensee in that region to open an additional dispensary location. Such a facility will be operated as a satellite location. After opening a satellite location, the satellite facility and the original location may be found to be serving 3,500 registered patients each. If this happens, the LABP will again allow the medical marijuana pharmacy licensee to open a second satellite facility within that region.

How Much Does It Cost to Open a Marijuana Dispensary in Louisiana?

  • The cost of the pharmacy license application - $5,000 application fee and a $150 licensing fee
  • Pharmacy facility rent/remodeling costs - This will cost between $50,000 and $100,000 or more annually. Experts usually advise renting a structure for a dispensary facility instead of buying one
  • The cost of installing security systems - This will range from $25,000 to $50,000, depending on the level of security system sophistication
  • Staff costs - Based on the industry's standard, this will range from $150,00 to $250,000 yearly, depending on the number of employees
  • Inventory costs - This will largely depend on the size and strains of cannabis products with which the dispensary wants to sell. While market prices are volatile, a pound of marijuana is about $1,500
  • Operational costs - This will vary by dispensary, but licensees should expect to incur at least $100,000 annually on ongoing operational costs
  • Advertising costs - These could cost between $30,000 and $65,000

Note that these are only estimates and will vary based on several factors, including the size and location of a licensed therapeutic marijuana pharmacy.

Do You Need an Insurance Policy for a Cannabis Dispensary in Louisiana?

Insurance is not a requirement to run a therapeutic marijuana pharmacy in Louisiana. However, to protect their investments against certain risks and unexpected circumstances, medical cannabis dispensary owners in the state are often advised to purchase insurance policies for their businesses. Marijuana dispensary owners widely subscribe to the following insurance policies, and they are recommended for therapeutic marijuana pharmacy licensees in Louisiana:

  • Product Liability Insurance - This provides financial protection against legal claims that may arise from the adverse effect of using cannabis products purchased from a marijuana pharmacy
  • Workers' Compensation Insurance - This protects a dispensary against claims made by a dispensary employee as a result of work-related injury or sickness
  • Loss of Income Insurance - This will cover monetary losses that may arise during a natural disaster and can help a dispensary pay staff payroll and a few other expenses
  • General Liability Insurance - This insurance policy will protect a marijuana pharmacy from legal claims emanating from third-party property damage or bodily injury on the dispensary's premises

The cost of insurance for therapeutic marijuana dispensaries in Louisiana will differ depending on the following factors:

  • The required coverage limits
  • The size and scope of the pharmacy operations
  • Past claims made by the dispensary owners
  • The type of insurance policy
  • The location of the marijuana pharmacy
  • The number of pharmacy locations (for dispensaries with satellite locations)
  • The owner's level of experience in the marijuana industry

How to Get a Grant to Open a Dispensary in Louisiana

  • Family and Friends - Turning to friends and family to raise capital for a dispensary often comes with little or no interest. In most cases, these individuals are not exactly interested in making any returns from the business
  • Marijuana-specific Investors - This involves raising funds from people or companies who are devoted to investing in marijuana businesses, including dispensaries. However, this type of borrowing comes at high-interest rates, usually for a short tenure
  • Self-financing - While this is not always advised due to the many risks involved in running a cannabis dispensary, it is the best way for anyone who is buoyant to raise capital for a medical marijuana pharmacy in Louisiana
  • Business Loans - Credit unions can lend money to prospective cannabis dispensary owners to start their businesses. Currently, borrowing from commercial banks to establish a dispensary is hard because of the federal prohibitions on weed
  • Equity Financing - With equity financing, a prospective dispensary owner in Louisiana can get a group of investors who will lend them money to fund their dispensary business in exchange for ownership interests in the dispensary. Under this arrangement, the investors may be able to have a level of control over the business operations
  • Personal Loans - Any individuals with a steady income and good credit score may qualify for personal loans with which they can finance a dispensary's startup costs
  • Equipment Financing - This is recommended if a person needs to purchase certain equipment, including point of sales (POS) systems and furniture, to run a cannabis dispensary

Does Louisiana Have a Social Equity Program for Cannabis Dispensaries?

No, Louisiana has no social equity program from which marijuana pharmacy licensees who have been disproportionately harmed by weed prohibition can benefit. No state-level funding is available to support such licensees' medical marijuana businesses.

Does Louisiana Tax Marijuana Dispensaries?

Yes. A 10% tax is imposed on each marijuana retail sale by licensed therapeutic marijuana pharmacies in Louisiana. This is in addition to the state and local sales and use tax. Per state law, 30% of the taxes levied on cannabis retail sales must be remitted to the municipality in which the sale occurred. Taxes generated from marijuana sales in the state are remitted to the Louisiana Department of Revenue (LDR).

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