In November 2016, voters in Nevada weighed in on Question 2, the state’s Initiative to Regulate and Tax Marijuana. By a margin of 54 to 46, the ballot measure passed, paving the way for the state to permit the sale and use of marijuana. Among other things, the law creates fresh commercial opportunities.

If you’re looking to apply for a dispensary license, however, you’re probably out of luck.

“There is not an open application period currently,” says Amanda N. Connor of Connor & Connor in Henderson. “The last one … those licenses were awarded in December 2018. Since then, there has not been an open application period, and there is not one planned.”

Nevada’s regulations currently allow for a set number of licenses, and for dispensaries and retail cannabis stores, the maximum number has been awarded: 132. However, if any licenses are revoked, someone surrenders them, or the law changes to increase that number, there may be another application period. If so, here’s what you need to know.

Applying for the Appropriate Marijuana License

Under Nevada law, there are four different types of commercial marijuana licenses available.

1. A marijuana dispensary license
2. A marijuana cultivation facility license
3. A marijuana production facility license
4. An independent testing laboratory license

An applicant must have the appropriate license for their specific operations. If you are seeking a dispensary license in Nevada, it can be expensive. The fees alone are $5,000 for the initial application fee (non-refundable if denied), $30,000 initial licensure fee, and $5,000 annual license renewal fee.

Compared to many other businesses, the application and licensing fees are especially high. Of course, these costs are only the beginning. You must also have enough capital to get the business up and running—including selecting and securing property for the proposed dispensary.

Meeting the Application Requirements

To obtain a marijuana dispensary license in Nevada, you must meet a number of different specific requirements. Perhaps most notably, the state requires all dispensary applicants to prove that they have control of $250,000 in liquid assets for the business entity.

If you lack sufficient startup capital, your dispensary license application will be denied on those grounds. Beyond paying for the application fee and the initial license, you and your business partners must get sufficient liquid capital.

Further, as part of the dispensary application process, property for the proposed site must be obtained. The selected property should comply with all state and local regulations related to marijuana dispensaries. Notably, most property must be renovated before it can be turned into a marijuana dispensary. This is because Nevada law requires all marijuana establishments to have secure entrances and to be built in the style of a traditional medical or pharmaceutical facility.  

“The way to get involved in Nevada’s marijuana industry currently would be to purchase an already issued license, because they are transferrable,” says Connor. “You have to pass a criminal background check and have no excluded felony offenses within the last 10 years. And then there’s also a financial component: The company or individual has to show a minimum of $250,000 in liquid assets in a U.S. banking institution.”

Protect Your Investment

Opening and operating a marijuana dispensary in Nevada is a complicated process. If you are considering making a major investment in the industry, it is imperative that you consult with a Nevada business law attorney who has experience with marijuana dispensary licensing. Your business lawyer can advise you on all relevant issues related to the application and licensure process. It is highly recommended that you speak to an experienced attorney before purchasing any real estate to open up a dispensary.