Are you looking to learn how to open a dispensary in Texas? This guide covers the latest opportunities, legal considerations, and steps to launch a cannabis business in the Lone Star State.
Texas Cannabis Laws Overview
Currently, recreational marijuana use remains illegal in Texas, including possession, sale, cultivation, and distribution. However, the state has a limited medical marijuana program.
Through the Texas Compassionate Use Program (CUP), low-THC cannabis (up to 1% THC) is legal for patients with certain qualifying conditions, such as epilepsy, chronic pain, or traumatic brain injury.
Dispensing organizations operate under a vertically integrated model, meaning cultivation, processing, and sales occur under one licensed entity.
While Texas remains more restrictive than many other states, the CUP provides a legal path for cannabis businesses.
Legislative Updates & Cannabis Reform Efforts
Texas lawmakers continue to explore cannabis reform:
- House Bill 218 (2023): Proposed to decriminalize small amounts of marijuana but stalled in the Senate.
- House Bill 3652 (2023): Would have legalized adult-use cannabis, allowing possession of up to 2.5 ounces and home cultivation, but remained in committee.
- House Bill 1208 (2024): Introduced to legalize and regulate adult-use cannabis; currently pending in committee.
- House Bill 46 (2025): Signed into law, expanding medical marijuana access to chronic pain and traumatic brain injury and increasing licensed dispensaries from 3 to 15.
- House Bill 195 (2025): Proposed recreational legalization for adults 21+, including possession and regulated retail sales (pending).
Public support for cannabis legalization is growing. Recent surveys show over 60% of Texans favor recreational legalization, and an even higher percentage support decriminalization. This trend indicates a promising future for cannabis business opportunities in Texas.
Medical Marijuana Opportunities in Texas
The Texas Compassionate Use Program currently allows:
- Registered patients to access low-THC cannabis.
- Permanent Texas residents only to enroll in the Compassionate Use Registry.
- Licensed dispensaries to grow, process, and sell products under strict regulations.
As of April 2024, there are 82,475 registered medical marijuana patients in Texas, creating a significant market for licensed dispensaries.
Licensing & Application Process
The Texas Department of Public Safety (DPS) manages CUP licensing. The recent application cycle opened on August 8, 2025, and closed September 15, 2025.
Dispensing organization licenses are issued in two phases:
- Phase I – Updated applicants from previous cycles; nine licenses to be awarded by December 1, 2025.
- Phase II – Open to new applicants; three licenses to be awarded by April 1, 2026.
Requirements include:
- Proof of ownership and status verification
- Application and licensing fees
- Disclosure of criminal history
- General liability insurance
- Evidence of qualifications and completed registration
Cost of Opening a Dispensary in Texas
Starting a dispensary in Texas involves:
- License application fee: $7,356
- Dispensing organization license fee (2 years): $488,520
- Registration fee: $530
- License renewal every two years: $318,511
These costs reflect the state’s regulatory framework and the limited number of dispensary licenses available.
Local Restrictions & Decriminalization Efforts
While recreational use remains illegal statewide, some Texas counties have decriminalized small amounts of marijuana.
Local jurisdictions, including Austin, Dallas County, Harris County, Travis County, and others, issue citations or educational programs instead of criminal charges for minor possession.
The Business Opportunity
Texas has more than 1.5 million adult cannabis users. Legalizing recreational cannabis could generate:
- $2.7 billion in annual sales
- $1.1 billion in additional state revenue every two years (if taxed like Colorado)
- $10 million annually from licensing fees
- $311 million annual savings by reducing minor possession prosecutions
The Texas market represents a major opportunity for medical and potential future recreational dispensaries.
Key Steps: How to Open a Dispensary in Texas
- Understand Texas cannabis law – Only medical marijuana is currently legal.
- Meet CUP eligibility requirements – Only permanent residents can participate.
- Prepare your application – Include ownership proof, background checks, insurance, and fees.
- Secure financing – Licensing and setup costs can exceed $500,000.
- Select a location – Ensure compliance with local zoning and state regulations.
- Apply for a license during open windows – Check DPS for current dates.
- Stay updated on legislation – Future recreational legalization could expand your business potential.
By following these steps, you can strategically position yourself to open a dispensary in Texas, whether for the medical market now or the anticipated adult-use market in the future.