How to Open a Dispensary in Texas
Although recreational marijuana has not yet been legalized in Texas, Texas currently has a limited medical marijuana program established by the Texas Compassionate Use Act in 2015. The Texas Department of Safety (“DPS”) administers the Compassionate Use Program (“CUP”), including all licensing processes for dispensing organizations. In early 2023, DPS opened the full application process for dispensing organization licenses for the first time since licenses were initially awarded in 2017. The application window closed on April 28, 2023. Currently, only three dispensing organizations have been granted licenses by DPS to cultivate, process, and dispense low-THC cannabis to qualifying patients in Texas: Compassionate Cultivation, Fluent, and Surterra Texas. An announcement on the award of new licenses has not yet been made, and DPS has not confirmed how many licenses it expects to award. Pursuant to the Compassionate Use Act, DPS may only issue the number of licenses necessary to ensure reasonable statewide access to and availability of low-THC cannabis for patients registered in the compassionate-use registry.
Texas is a vertically integrated state, meaning that all dispensing organizations must cultivate, process, package, and dispense the medical marijuana from a single location. Currently, only low-THC cannabis is approved for dispensation under CUP, currently limited to 1% THC by dry weight. The program also has restrictions regarding qualifying conditions and does not include certain conditions, such as chronic pain. Applicants must also follow all other administrative and statutory rules of the Texas Administrative Code (“TAC”) Chapter 12, and Texas Health and Safety Code Chapter 487.
All applicants must pay a non-refundable application fee of $7,356.00 dollars. If approved, licensed dispensing organizations must pay a new licensing fee of $488,520.00 for a two (2) year period. A biennial renewal license costs $318,511.00. Dispensing organizations must also pay fees per employee to register them with DPS. Entry costs for Texas are very high compared to other states.