The legalization of medical and adult-use marijuana in multiple U.S. states has brought marijuana dispensaries and cannabis stores to the streets of American cities like Los Angeles and Detroit. While the terms are often used interchangeably, the differences between the two are important to understand not just as a customer, but also as an entrepreneur seeking to enter the cannabis space.
Medical Vs. Recreational
A dispensary primarily serves the needs of medical marijuana patients, while a cannabis store is oriented to the recreational segment.
The different uses translate to different customer experiences. In a dispensary, patients will usually find a waiting room from which they are invited to the sales room. In the sales room, customers discuss their cannabis needs with a budtender who can answer questions and suggest products.
To enter a marijuana dispensary, a patient needs a medical prescription. Dispensaries typically keep a copy of the prescription and can track orders for future references.
Conversely, in a public cannabis store, budtenders don’t always have time to allocate to each individual customer. And since there is a wider selection of marijuana-based products for recreational use, a cannabis store usually has a larger menu than a dispensary.
Recreational cannabis stores place a bigger emphasis on the branding, packaging and the overall aesthetic of a product.
Luckily, most offer online menus that can be studied at home.
However, this doesn’t mean a dispensary won't offer a selection of flowers, concentrates, edibles, vape pens and other products.
While both marijuana dispensaries and cannabis stores sell marijuana and derivative products, their prices tend to diverge, with lower prices generally found at marijuana dispensaries.
Why? The primary reason is that medical marijuana is taxed at lower rates in most states. For example, the excise tax on marijuana is 15 percent in California, but medical marijuana is exempt. In Colorado, the total tax on marijuana is 27 percent, which includes a sales tax of 2.9 percent. Medical users pay only the sales tax, so their weed is around 24-percent cheaper.
Medical marijuana users have to obtain a special medical marijuana card, which requires a doctor's recommendation — meaning that the cost of the doctor’s consulting fee and the application fee for the medical card will partly offset the lower price of marijuana.
On the other hand, recreational stores are required to pay full taxes that are passed onto the customer. Many recreational stores have more employees compared to dispensaries, resulting in higher overhead.
They also face tougher regulations, at least in some states.
“All recreational weed has to be tested before it goes on the shelves in California, but there are only 28 licensed cannabis testing labs, which caused a massive backlog that some dispensaries are still struggling with. Not to mention the cost of child safe packaging and business permits,” Merry Jane managing editor Mira Gonzalez told Benzinga.
What to Keep In Mind When Visiting A Dispensary Or Cannabis Store
To buy weed from a dispensary, patients generally need to be at least 18 years old, while recreational use is usually reserved for customers over 21.
The limitations on maximum purchase amounts also vary. In California, medical users can purchase up to 8 ounces, but recreational users can only buy up to 1 ounce.
“For a medical dispensary, the experience is a lot looser in that you can buy more weed at one time, stronger edibles and more concentrates. Recreational dispensaries carry only prepackaged product and can't legally carry anything above a certain THC content,” Gonzalez said.
Always bring an ID and cash when visiting a dispensary. Since marijuana is federally illegal in the U.S., cannabis companies are frozen out of the traditional banking system.
Most dispensaries and stores will have ATMs, but they will charge higher withdrawal fees. And don't be alarmed at the presence of armed guards: running a business based on drugs and cash means precautions are necessary.
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