How to Open a Dispensary in West Virginia

How to Open a Dispensary in West Virginia in 2024

To open a dispensary in West Virginia, you must obtain a medical cannabis dispensary license from the state’s Bureau of Public Health. The last application window opened in December 2019 and closed in February 2020. You must submit a site plan and an operating plan and obtain approval from the municipality where you plan to locate the dispensary before your application can be approved.

Why Open a Dispensary in West Virginia?

The West Virginia cannabis industry continues to make significant strides since the state's medical cannabis act was signed into law in 2017. According to the Office of Medical Cannabis statistics sheet published on October 6, 2023, the 53 operational dispensaries in the state reported more than $75 million in total sales. There are 27,732 patients registered under the state's medical cannabis program and over 2,000 jobs created through direct or indirect employment.

Despite the costs and hurdles of obtaining a cannabis business license in West Virginia, the opportunities for businesses in the state’s cannabis industry remain huge. The state’s medical cannabis market, while relatively new, is expected to grow significantly in the next few years.

Types of Dispensary Licenses in West Virginia

West Virginia only has one type of dispensary license. To set up a dispensary in the state, you must obtain a medical cannabis dispensary license from the Office of Medical Cannabis.

How to Get a West Virginia Dispensary License

You can obtain a medical cannabis dispensary license by submitting an application to the Office of Medical Cannabis in the State's Bureau of Public Health. Although the application window is not currently open in the state, the application process follows these guidelines:

• Meet OMC's Eligibility Requirements: To obtain a dispensary license, you must be a West Virginia resident, have a clean financial history, no criminal records, and provide proof of sufficient capital to open a dispensary in the state
• Obtain County or Municipal Approval: For your application to be approved, you must provide evidence of approval from local authorities to locate your dispensary in that particular jurisdiction
• Submit an Application and Pay the Required Fees: Upon meeting eligibility requirements, you may begin the online application process on the Bureau of Public Health's licensing portal. To start an application on the online licensing system, you must create a new user account on the system

You must submit all the required information and documentation for your application to be considered by the OMC. Note that the initial non-refundable application fee and the refundable dispensary permit fee must be submitted when the online application is submitted.

The initial application fee and permit fee must be two separate checks. The fees must be paid by certified check or money order payable to the West Virginia Department of Health and Human Resources and addressed to the Office of Medical Cannabis at 350 Capitol Street, Rm 523, Charleston, WV 25301. You must include the entity name and application reference number in the check's memo line.

• Submit to a Background Check: You must submit to a criminal history background check by providing fingerprints and other required information to the relevant authority. If you have a disqualifying offense, your application will be denied
• Pass an OMC Site Inspection: If your application is approved, OMC staff will inspect your facility to ensure that it meets the required conditions to operate under West Virginia law
• Receive your Dispensary License: If the dispensary passes the OMC inspection test, you will be issued a license to commence operations

For more information on applying for a medical cannabis dispensary license, see the medical cannabis organization checklist or contact the OMC at (304) 356-5090.

Information and Documents Required for a Dispensary License in West Virginia

When completing an application for a medical cannabis dispensary license in West Virginia, the applicant must provide the following documentation and information:

• General information
• Entity name
• Federal Employer Identification Number
• Trade name
• Phone number
• Website
• Email
• Ownership Information: This information is related to all principals, operators, financial backers, and employees at the time of application. Note that the ownership percentages must equal 100%
• Applicant information - Full legal name, phone number, email, date of birth, role, ownership percentage, social security number, ID document, ID number, expiration date, and issuing state
• If a business entity is listed as a principal, operator, or financial backer within a medical cannabis organization, the applicant must list the business entity name and the president, CEO, COO, or CFO of that entity
• Street address – Street name, unit or apartment number, city, state, and zip code
• Mailing address – Street name, unit or apartment number, city, state, and zip code
• Location Information
• Location type
• Facility address – Street name, unit or apartment number, city, state and zip code, and GPS coordinates
• Location mailing address – Street name, unit or apartment number, city, state, and zip code
• Owner or landlord information – Full legal name, phone number, street name, unit or apartment number, city, state, and zip code
• Primary contact – Full legal name, title, phone number, email, fax number, street name, unit or apartment number, city, state, and zip code
• Documents
• Organizational documents - West Virginia Secretary of State business license or Certificate of Authority for out-of-state businesses
• Organizational chart - Legal entity as well as functional operation
• Tax Letter of Good Standing
• Workforce WV Compliance Letter
• Property title, lease, or option to purchase agreement
• Description of duties for each position in the functional operation
• Curriculum Vitae or resume for individuals - A current CV must be attached for every principal, operator, financial backer, and employee listed in the application
• Affidavit of Suitability
• Criminal Background Check Application Rights Acknowledgement - Each person for whom a criminal background check will be performed must acknowledge receipt of this information
• Proof of identification
• Account Verification Release Form
• Affidavit of Capital Adequacy
• Timetable outlining the steps to become operational
• Verification of zoning requirements
• Supplemental documentation as necessary

What Plans Do You Need to Open a Dispensary in West Virginia?

In accordance with 4 CSR 109, Section 6.2, a site and facility plan and an operation plan are required for a medical cannabis dispensary license applicant.

This site and facility plan:

• Must include specifications drawn to scale for the interior of the facility if the facility is in existence at the time the initial license application is submitted
• Must include renovation plans and specifications for the exterior and interior of the facility to be altered if the facility exists at the time the initial permit application is submitted and the applicant plans to make alterations to the facility
• Must show the proposed location of the dispensary facility and an architect's drawing of the facility, including a detailed drawing, to scale, of the interior of the facility, if the facility exists at the time the application is submitted

The operation must provide a summary of the intended plan of operation describing, at a minimum, how the applicant's proposed business operations intend to comply with the West Virginia Medical Cannabis Act and rules relating to:

• Security
• Employee Qualifications and Training
• Transportation and Storage of Medical Cannabis
• Labeling of Medical Cannabis
• Recordkeeping
• Inventory management
• Plan for preventing unlawful diversion of medical cannabis
• Waste management plan

Applicants are also advised to develop business plans prior to applying for a dispensary license. A business plan is a strategic tool to help entrepreneurs navigate the challenging process of starting and running a dispensary in West Virginia. A business plan should contain detailed information on market analysis, competitive analysis, customer segmentation, marketing strategies, and financial plan.

Are There Municipal Requirements for Opening a Cannabis Dispensary in West Virginia?

Yes. Before the Office of Medical Cannabis may grant an applicant a medical cannabis dispensary license, the applicant must present proof of municipal authorization as evidence of compliance with all local regulatory requirements. Some requirements mandate that dispensaries comply with local zoning regulations and obtain local business permits or licenses before operating in the jurisdiction. For specific information about municipal requirements, consult with the local government authorities in the city or county where you plan to open a medical cannabis dispensary.

How Long Does It Take to Get a West Virginia Dispensary License?

The OMC announced winners of the medical cannabis licenses of the 2019/2020 application window in late January 2021. If the timeline remains the same for the next application window, applicants can expect to be awarded licenses in about 12 months after the closure of the application window.

Where Can You Locate a Cannabis Dispensary in West Virginia?

Per Section 16A-8-2 of Article 8 of the West Virginia Medical Cannabis Act, a dispensary may not be located within 1,000 feet of a school or daycare center. However, the Bureau of Public Health may modify this requirement if an applicant can show clear and convincing proof that the amendment is necessary to provide adequate access to medical cannabis patients. For specific distance requirements and other regulations concerning where a dispensary may be located, contact the local authorities in the municipality where you plan to establish the cannabis facility.

Can Licensees Have More Than One Dispensary Location in West Virginia?

The Office of Medical Cannabis allows West Virginia-licensed medical cannabis dispensaries to operate in multiple locations in the state. Some licensed dispensaries have stores in more than one West Virginia location.

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

The capital required to open a cannabis dispensary in West Virginia can vary based on the business scale and the chosen facility location. Still, it requires considerable funds to start a dispensary business.

Applying for a cannabis dispensary costs $2,500, while you must pay a $10,000 fee if the dispensary permit is granted. In addition to the requisite application and licensing fees, the establishment of a dispensary involves other expenses, such as those related to:

• Construction, leasing, or renovation of dispensary business premises to comply with state regulatory standards
• Equipment acquisition, such as security systems and point-of-sale systems
• Cannabis inventory
• Staff remunerations
• Marketing and advertising
• Insurance
• Legal
• Taxes

Overall, the total cost to set up and operate a cannabis dispensary in West Virginia ranges between $200,000 and $2,000,000.

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

Per Section 64-109-17 of the West Virginia Administrative Code, a medical cannabis organization must obtain and maintain an appropriate amount of insurance coverage insuring the site, facility, and equipment used in the facility's operation. Also, a medical cannabis dispensary must obtain and maintain workers' compensation insurance coverage for employees. Consequently, the following coverages are recommended for dispensaries in West Virginia:

• General liability insurance: This provides coverage for common lawsuits brought by customers and other persons outside the business for injuries, accidents, copyright infringements, and other related risks
• Product liability insurance: This provides coverage for the dispensary if the business is found liable due to a defective product sold at the facility
• Property liability insurance: Property Insurance reimburses dispensaries for direct property loss, such as those occurring due to vandalism, fire, or natural disasters. This policy covers business personal property, cannabis inventory, and real property
• Workers' compensation insurance: This coverage helps pay the medical costs and wage benefits for dispensary employees who become sick or are hurt as a result of dispensary operations

How to Get a Grant to Open a Dispensary in West Virginia

Due to the high costs associated with starting a cannabis business, financing a cannabis dispensary can be challenging. Many lenders consider cannabis ventures high-risk businesses and traditional banks do not typically offer loans to entrepreneurs due to the federal ban on cannabis.

However, you may try these alternative sources to raise funds for your dispensary:

• Self-Funding: This involves using your own savings or personal assets to finance the dispensary
• Private Funding from Family and Friends: In order to raise funds for your dispensary, you may seek investment or loans from family members or close friends who believe in your business idea
• Equity Investors: These are investors who are willing to exchange funds for ownership equity in your dispensary
• Crowdfunding: Usually, this requires using online platforms to raise capital by offering the public various incentives or a stake in your business
• Cannabis-Specific Lenders: Some financial institutions specialize in serving the cannabis industry, offering loans tailored to the peculiar needs of cannabis businesses

Does West Virginia Have a Social Equity Program for Cannabis Dispensaries?

West Virginia has no state social equity program for medical cannabis dispensary license applicants disproportionately harmed by cannabis prohibition.

Does West Virginia Tax Marijuana Dispensaries?

According to Section 16A-9-1 of the West Virginia Medical Cannabis Act, the state levies a 10% cannabis dispensary tax (CDT) on the gross receipts accrued or received on medical cannabis for medical cannabis dispensaries during a quarterly period. The dispensary will not add this tax as a separate charge on any sales slip, invoice, receipt, or memorandum of the price paid by a patient or caregiver. The West Virginia Tax Division collects the CDT.