Lobby Area

The Cost of Building a Cannabis Dispensary

As a dispensary builder, one of the most common questions we’re asked is: how much does it cost to build a cannabis dispensary? We usually answer that question with about twenty questions of our own. No two dispensaries are the same. Even cannabis dispensaries we build for national companies that require the same design and finishes face unique circumstances in different states that affect overall project costs.

The cost range is anywhere from $350,000 to $3,500,000 to build a cannabis dispensary. The following outlines the primary components which dictate the cost of construction. 

Cannabis Dispensary Building Structure

The first step in determining the construction cost of a cannabis dispensary is what kind of building is the dispensary going into? We’ve built dispensaries in vacant strip malls, former pharmacies, old banks, newer banks, a former accounting firm, and even a dental office. We’ve also built brand spanking-new buildings from the ground up. 

Cannabis Dispensaries in Strip Malls

Zenlead Sign being installed by GAB
Strip mall dispensaries are quite common and cost effective, assuming landlord requirements are not prohibitive.

The most cost-efficient dispensary build-out option tends to be a vacant space or ‘vanilla box’ in a strip mall. These tend to be the most cost effective because there are usually adequate mechanicals such as HVAC, plumbing and electrical services in place.

The framing layout is usually limited to interior partition walls, and the exterior is already set in place. Exterior renovations can be costly, so absent changing front facing windows to mitigate security risks, there’s not much exterior work that needs to be done in a strip mall unit. 

One item that could increase the cost of a strip mall build out is odor mitigation. More and more landlords, and some municipalities, require their tenants to install complex odor mitigation systems so that the cannabis odor doesn’t permeate throughout the other tenant spaces. At Grow America Builders, we’re partial to the smell of cannabis, but the adjoining Gymboree or Men’s Warehouse may not be as open to the sweet smell of fresh flower permeating through their space. We’ve investigated many different systems for odor mitigation, and have identified many options, most of which have been value engineered to achieve maximum mitigation and minimal cost. 

A dispensary built out in a strip mall typically costs between $500,000 – $850,000.

Dispensaries in Free Standing Buildings

Free standing buildings allow for optimal customization of layout, aesthetic, and curb appeal.

Many dispensaries are built out in a free-standing building such as a bank, an old restaurant, or other multi-use space. The construction costs on these are higher because aside from interior renovations and upgrading mechanicals, there will most likely be exterior renovations as well. Unnecessary windows are usually removed and infilled with masonry to reinforce security. New storefront doors and glass typically need to be installed, and many municipalities require ‘one way in and one way out’ egresses with man traps.  

An advantage of a free-standing building is much more flexibility with layouts and the ability to customize many aspects of the dispensary. This type of renovation also requires parking lot improvements, and new landscaping. With this much flexibility the cannabis dispensary can have great curb appeal and include all the features the client desires. 

Renovating an already existing free-standing building can run anywhere between $350,000 – $1,000,000. 

New Construction of a Cannabis Dispensary

Building a dispensary from the ground up is typically the most efficient.

Typically, new construction is the most expensive cannabis build per square foot. However, when building a dispensary via new construction, there are two very important advantages that cannot be denied: new construction is the most time-efficient, and it allows the client to layout their dispensary exactly the way they want. 

New construction is most efficient because there is less risk of encountering unanticipated issues and there are no landlord requirements to accommodate. With the budget to cover it, with new construction, the customer gets everything they want; every aspect is carefully decided and located in the best possible location such as the vault, the cannabis workroom, the point of sale area and the reception area.. All aspects are laid out by the design, retail and construction teams to ensure maximum efficiency at all levels. 

Lastly, most new construction is built with an updated concept and modern aesthetic which increases curb appeal and consumer traffic. 

A dispensary built from the ground up, new construction can cost between $900,000 – $3,500,000.

Renovating an Old Building to Construct a New Dispensary 

The challenges of renovating an old structure to build a new dispensary result in more time and money spent. 

The least cost-efficient type of cannabis build-out should be avoided; and that is retrofitting an old free-standing building. For instance, Grow America Builders were hired to renovate an eighty-eight-year-old bank into a new dispensary.  After considering the cost of  new mechanicals, retrofitting the exterior masonry walls, removing the old vault, asbestos and lead paint abatement, stripping the plaster walls, coring through old precast concrete flooring, and a myriad of unanticipated challenges, it would have been more efficient and cost roughly the same amount to build a brand-new building from the ground up. 

Why would someone do all this work on an old building? Unfortunately, state limitations and local zoning restrictions sometimes pigeonhole certain properties using an existing structure as the only option for a dispensary. 

Read how Grow America Builders created Midway Dispensary.

There are so many variables with this option, but when figuring out the costs to renovate an existing building over 75 years old, we usually see the numbers start at $600,000, but regardless of where the construction cost estimates come in, we always advise our clients to budget an additional $100,000 contingency for unanticipated extras. Whether or not they have to dip into that contingency budget, it provides peace of mind to include it.

Dispensary Size

A dispensary can be any size. The primary factor is building a dispensary that will accommodate local consumer and patient demand. Obviously a medical dispensary in Missoula, Montana is going to be smaller than an adult use dispensary in downtown Chicago. However, most dispensaries usually fall between 2,500 sq feet and 5,000 sq feet.

The larger the dispensary, the more expensive the build out. However, bigger doesn’t always mean better. A good design-build firm should maximize layout so that even a space with limited square footage should have all the necessities while not feeling cramped.

A smaller dispensary typically costs between $350,000 -$500,000 to build,  while mid-size dispensaries will be between $500,000 – $750,000. The large dispensaries will obviously exceed $750,000 and usually run over $1M. 

Cannabis Dispensary Finishes

After deciding on the type of structure and its size, the aspect of the design that will most impact cannabis dispensary construction cost is the finishes that are selected. Finishes will determine the type of aesthetic and style the dispensary will convey. Will it be sleek and contemporary like an Apple store? Or warm and inviting like an apothecary? The primary finishes that determine cost are as follows:

Flooring

Common options are polished concrete, vinyl plank, wood plank and porcelain. Again, like most other items, there are many variables with flooring. For instance, polished concrete is usually more expensive than vinyl plank.  However, if the existing floor is in bad shape and needs to be ground to a level surface in order to properly lay the vinyl, it may be more cost effective to polish the concrete. We advise our clients to allow a budget of $25,000 for flooring. 

Custom Millwork

Custom millwork for a cannabis dispensary includes a reception desk, point of sale case work, bathroom vanities, wall coverings, display fixtures and more. Custom millwork is, as the name states ‘custom’, so the overall cost of this item has a large price variance. 

Some dispensaries will have a limited amount of wall coverings and value engineered cabinetry and can come in at under $15,000. Other dispensaries will want a ‘wow’ factor with the interior millwork and have hanging displays, walnut wood coverings, high gloss reception desks and can easily exceed $50,000. This is one of the more subjective categories of a dispensary and is up to the owners’ desires.

Dispensary front desk
Reception Desk at Dispensary

The finishes of the reception area are especially important, it’s usually the first impression of your dispensary. 

wooden display cabinets
The devil is in the details when it comes to custom millwork for dispensaries.

Fixtures

Fixtures may include hanging light pendants, ceiling light fixtures and plumbing fixtures. Light fixtures typically fall within the $10,000 – $30,000 range, with the governing factor being the type of hanging fixtures and in-ceiling fixtures specified. 

Custom Lighting
Custom light fixtures can add a great experience for the consumer and is also functional by providing a great source of illumination for the dispensary.

Plumbing fixtures are dependent upon how many bathrooms are included as well as the overall look, but this is not an expensive aspect of the dispensary and most dispensaries can be built with plumbing fixtures being less than $20,000.

Hardware

Hardware such as door handles, closers, ADA grab bars and more must be selected. When working on the finishes, an important question is whether the dispensary is going to be an eye-catching destination where consumers and patients will want to drive those few extra miles, and will the dispensary be welcoming so that they will want to stay extra time looking at products and accessories.

Some companies have done research that shows that a cannabis consumer will assume the bigger, more dramatic dispensary will have better product than the smaller, more ordinary dispensary. If the goal is to have an efficient ‘in and out’ dispensary with quick turnover, then there’s nothing wrong with keeping costs down and going with more common finishes. If the objective is a flag ship dispensary that will draw people in from neighboring towns with competing dispensaries, then those fixtures should trend towards higher-end custom choices. 

The devil is in the details. No matter what finishes are selected, there’s a level for all dispensary aesthetics, and Grow America Builders’ design team assists on all aspects. 

display shelves
There are many options when deciding upon finishes; displays can come in all shapes and sizes. Shown: Floating displays.

Cannabis Dispensary Security

Every dispensary must include an alarm and surveillance system that adheres to features mandated by state code. Since every inch of a dispensary – inside and out – must be covered by surveillance, some security systems can cost over $75,000.  Some clients want upgrades that exceed the minimum requirements the state imposes and may add reinforced doors, access control at every doorway, bomb proof film on storefront glass, overhead security gates, and a specialized vault door. While these added protections are more costly, they provide the dispensary owners with security against theft of cash and valuable product.

The vault is one of the more expensive features when building a cannabis dispensary. Deciding upon the right vault takes careful consideration and planning. There are three main ways to build a vault, each with different costs; prefabricated vault panels, solid masonry block, and metal stud framing sheathed with barrier mesh. If estimating all vaults at the same size, a prefabricated vault will be approximately $60,000, a masonry vault will cost approximately $40,000, and a metal stud/barrier mesh vault (if allowed) will run approximately $25,000.

Masonry vault under construction 

Aside from the method of building the vault, the size of the vault is important.

  • How many people are expected to purchase cannabis throughout the day?
  • Is there an adjacent workroom, and if so will product be stored there during the day?
  • How much product will be stored on site overnight?

All of these questions will help determine the size of the vault, and ultimately the total cost. But keep in mind, when building a new dispensary, the vault should be built for the future and not for the present. There’s the old adage, ‘If you build it, they will come’. Many cannabis companies outgrow their vault within a few years and call us back to increase the vault size. 

secure cannabis dispensary vault door

Upgraded vault door with day gate. This type of door is virtually impenetrable. 

 For more information on cannabis security read our article on dispensary security.

From Conception to Completion

There are many milestones when entering the cannabis industry, one of which is receiving that coveted dispensary license. Usually, there’s only one chance to get it right. That’s why it’s important to ask the right questions when starting the dispensary construction quote development process. Take time, be diligent, and put together the best, most experienced and qualified team possible. After that, everything else will fall into place with a beautiful, new dispensary that will be filled wall to wall with happy customers for many years to come. 

David Fettner
David Fettner

David Fettner is a managing partner of Grow America Builders, a national design-build construction company focused solely on the cannabis industry. Along with his partner, Mike Kaulentis, Grow America brings over twenty years of versatile construction experience, offering customers an end to end experience from concept through architecture, design and turnkey construction.