Opening a cannabis dispensary in Illinois is far from a simple business venture, according to Thomas, the owner of a new dispensary who recently broke down the true costs and challenges in a detailed video. Contrary to the popular belief that dispensary owners are “printing money,” Thomas reveals that launching such a business can cost close to $1 million, with much of the expense driven by strict state regulations and limited access to traditional financing.

A Pricey Entry Fee

The process begins with a major upfront investment: $300,000 for a building, which must often be purchased in cash due to banks’ reluctance to finance cannabis-related businesses. “Big banks won’t touch the industry,” Thomas explains, noting that this is just the start of the financial hurdles.

Before even opening the doors, aspiring dispensary owners must navigate a labyrinth of city and state approvals, hiring lawyers and architects to ensure compliance. Thomas estimates these initial legal and planning costs at $25,000, with another $20,000 for architectural plans.

Construction and Security: Building a Fortress

Transforming the building into a compliant dispensary is a costly endeavor. The total construction bill, including equipment and professional fees, reached $560,000 for Thomas’s project. The largest portion—$510,000—went to a general contractor for a complete renovation, including a commercial-grade reinforced vault for storing products and cash, as required by law.

Security is another major expense. Illinois mandates commercial-grade security systems, including 21 HD cameras, alarm systems with panic buttons, and key card access controls. The down payments alone for these systems exceeded $30,000.

Additional Startup Costs

Beyond construction, Thomas spent approximately $120,000 on technology, furnishings, branding, signage, and initial inventory. Payroll and training for staff before opening added another $40,000 to the bill.

In total, the grand opening cost for the dispensary approached $980,000—before a single sale was made.

The Financing Challenge for the Cost to Open a Dispensary in Illinois

Securing funding is a significant obstacle, as cannabis remains illegal at the federal level, barring access to most traditional loans. Thomas described a “terrifying puzzle” of piecing together funds, including cashing out his retirement account, obtaining a $100,000 city loan, and securing a rare $250,000 unsecured bank loan. The remainder was covered by high-interest credit lines, some with rates as high as 24%.

A High Bar for Entry

Thomas notes that while costs vary by state, Illinois is among the most expensive due to its stringent regulations. Nationally, the average cost to open a dispensary is around $750,000, but in Illinois, it can easily approach or exceed $1 million.

“The system is basically designed so that only rich people can win,” Thomas says, highlighting the financial and regulatory barriers that keep many would-be entrepreneurs out of the industry.

Looking Ahead

Despite the daunting costs, Thomas remains optimistic about the future of his dispensary and encourages others to understand the realities before entering the market. “Starting a dispensary in 2025 is not a joke. It’s one of the most expensive and difficult challenges you can attempt. The rewards may be huge, but if you run out of money, you will fail.”

He concludes by inviting viewers to share their thoughts on the most surprising costs and to follow his journey as the dispensary prepares to open its doors.

Video Transcript

Today everyone thinks that opening a dispensary is just like you have a license to print money, but what if I told you a printing press costs almost a million dollars and you have to pay for most of it in pure hash? So many people see the green rush and think it’s just opening a simple store. Here’s the secret.

You’re not getting into the retail business. You’re getting into the rule following business. This isn’t a guess In this video, we’re literally showing you the real expenses from our dispensary startup in one of the craziest and most expensive states in America, Illinois. We’re going to break down every single dollar from the $300,000 building that I’m standing in into the crazy security systems.

The government forces you to buy. You’re about to see exactly where all the money goes and why the final bill is so mind-blowingly high. And so today we are breaking down how to spend nearly $1 million to open a single store. First, I’ll show you the money that you literally have to burn or invest before you even get approved to open for business.

Then we’ll dive into the half a million dollar construction bill required to turn this into. A literal fortress. And finally, I’ll show you the terrifying financial game you’ll have to play just to unlock your doors and how it all adds up to a pretty insane grand total. Before you can even pick up a hammer, you have to say goodbye to a pile of cash that you may never see again.

But hey, I got this huge building out of it. Check out this wall. This is the price you pay just to get in the game, and you can’t get a refund or file for bankruptcy. While it’s Schedule one for our dispensary in this video, the first step cost us a staggering 300 grand. Now it is a huge, charming old building.

This is almost always the biggest check. You write first in a lot of states, you must own a building for your license or find someone who does, because having a dispensary is a default in 98% of mortgages. For this project, the building was bought for cash. Why cash? Because it is almost impossible to get a normal bank loan for.

Anything related to cannabis. Big banks won’t touch the industry, and we’ll see why. That’s a huge problem later when we turn this monstrosity into a compliant dispensary. But just owning this building gets you pretty much nothing. Next, you have to survive the city and state approvals. This means you need a team of lawyers and architects.

Our projects would’ve spent 25 grand on just. Paperwork permits and lawyers to figure out all the crazy rules, but that’s why they got me. Let’s be super clear. That is a $300,000 bill before a single customer walks in and before a single product is ordered. If your SUSE permit gets denied, then that money is just gone, which is why we did not close on this building until after we got that permit, but then we had to pay extra for it.

And this is the first insane challenge that kicks out. Almost everyone. So you have your building now and your architect fees for the final plans at another 20 large or so, and that gets you MEP, mechanical, electrical, and plumbing like blueprints that contractors can use to bid on building your dispo.

Now the real fund begins the construction. We’re getting to that and that’s where the spending gets completely out of control for our dispensary. The total construction bill, including all the equipment and professional fees, appears to be about another. $560,000. The biggest piece of that is about 510,000.

That’s gonna go to the general contractor for a complete renovation. This isn’t just for cool floors or fancy paint. This pays for the core systems, and most importantly, the stuff the state forces you to have. That includes building a commercial grade reinforced vault for storing all the products and cash.

That’s not a recommendation. It is a fortress required by law. A $25,000 door you have to walk through to get your vault, which we still have to build. So it also required us to get a structural engineer to fortify the structure’s basement, to keep the vault well on this fork. Now, for the part that makes people go broke, security, in a state like Illinois, they’re obsessed with security.

You just can’t buy some cameras from a store. You need a commercial grade security system that follows dozens of specific rules. The down payment for the camera system alone, 21 HD cameras, and the giant data storage is 18,000. The alarm system with panic buttons, another 4,000, and the key card access control system that tracks every employees in and out from the facility.

Another 8,000 just for the down payment. Let’s do the math on that. All these down payments for security costs over $30,000, and then all the rest gets you to that $560,000 total. This is exactly why building a dispensary in a state like Illinois costs so much more than anywhere else. You bought the building and you think that you’re done spending money, right, wrong.

Now you have to pay for everything that turns this empty fortress into a real store. That’s about another 120,000 that we have to spend and shout out to DCEO in Illinois for helping us poor social equity teams. Dispensaries can get up to $245,000 in low interest loans, but you can’t use it to do your build out.

So we still have to pay the $800,000 approximately to get this building and to do all the build out. But the equipment, perhaps like our security, maybe the vault door, that might be equipment, and also our security system now to help me get the rest of that money. If you have a dispute in business. Or want to do a deal, head on over to cannabis industry lawyer.com.

We have a network of lawyers in most legal states and can help people expand, defend, attack, and collect. That’s cannabis industry lawyer.com if you want our help with your company. Now, back to the regularly scheduled programming. First expense after your build out is your tech. That special point of sale cash register that the government makes you use, and a website that’ll be 10 grand and you have to furnish all this place, all your dispensary cases, the office stuff that’s probably 10 grand in equipment.

And of course your dispensary needs a brand, big professional signs. Those are a must. So expect spending like another 10 grand on branding and signage, like we have this big picture window, we should probably have a logo on it or something. And of course, you can’t open your store with nothing to sell your first inventory purchase.

Maybe $50,000. And fortunately, they often come with an invoice payable 30 days net, which is exactly the number of days you need for a statement of accounts claim. And finally, one of the expenses that most everyone forgets but has the most legal protections so that you have to do it paying your employees.

You need to hire and train your team before you open and make a single dollar for this project. Our month of payroll and training cost is estimated be about 40. Ish thousand dollars because you have to get your staff badged and trained via an approved responsible vendor program. So when you add up all the money we spent for burn, it’s 300 large for this beautiful building, another $560,000 for all the build out and equipment and maybe another $120,000 in other opening costs.

And that gets our dispensaries grand total to open to a mind blowing 980 large. And as you see, we have not built up. So tune in in another three or four months. To see if that was low or high. Now let’s get to the craziest part where many people fail getting the money because cannabis is still illegal to the federal government.

You can’t just get a normal business loan. You’re banned from the entire financial system, so you have to find another more expensive way to get cash. Take for example, how we’re gonna get our $980,000 for this project. It’s an absolutely terrifying puzzle. Which included dumping my IRA and creating what they call a Rob’s C corporation.

We did also get a little help. The city gave us a hundred thousand dollars loan. The catch this lovely historic building. We are in a TIFF district and we are expected to sell enough product to pay them back. And boy do we want to and are grateful for their financing. Next, we found one of the only banks that would give us a quarter million dollar unsecured loan.

This is hard to get and very expensive. The monthly payment is over six grand and that still leaves a massive hole of over $230,000 to fill it. We got multiple lines of high interest credit, like for example, a $25,000 line of credit at 11%, another $90,000 line of credit at 14% and an emergency one. For about 114,000 at an insane 24% interest rate.

That’s basically credit card debt, and it’ll destroy your business if you use it for too long. And so that final piece of approximately $215,000, and it’s one of the most stressful challenges you can possibly imagine. As an owner, you’ll be sleeping like a baby on sugar and caffeine in no time. So you’re probably asking is spending nearly a million dollars to open a store normal for a state with insane regulations like Illinois?

Yes, the costs around the country can be as low as a 250,000 or less, or they can be over $2 million. The national average to open a dispensary is around three quarter million dollars. So our Illinois project is on the high end of normal, mostly because of the state’s crazy rules. And because we bought this real estate, the cash we spend on the building will actually turn out to be a pretty good deal.

But then the build out of over a half a million dollars and the fault and all the other stuff, and this charming 115 year old building. So our build out costs were a little bit more because of that. Now, in a state with easier rules, that number could be. Literally half of it back in 22, I helped a client get open in New Mexico for like 120 large.

The bottom line is that your exact numbers will be different, but this project is a super realistic example of opening a store in a competitive market in 2025. You have to be ready to spend somewhere between 400 large and 1.5 million. It’s completely nuts. Let’s recap all this craziness. We started with a shocking number of about $980,000, and now you see how we got there.

We spent $300,000 just to get the building. After we got zoned, we spent like another $560,000. For getting it all built out correctly and getting it licensed, and another 120 ish thousand dollars after we are compliant to open the doors and actually start doing the business. Most importantly, you’ve seen the insane challenges of funding a business that is blacklisted by the entire banking system.

It forces people in a terrifying game with high interest loans. Where a mistake means that you’re basically gonna have to liquidate everything. Starting a dispensary in 2025 is not a joke. It’s one of the most expensive and difficult challenges you can attempt. The rewards may be huge, but if you run outta money, you will fail.

It’s that simple. It’s having enough money and following all the rules. The system is basically designed on purpose or not, so that only rich people can win. However, what do you think? What do you think the most insane cost that I showed you was? Let me know in the comments. Our mission here is to show you the real side of the cannabis industry, and we’re trying to hit a hundred thousand subscribers to blow this thing up.

If you believe in our mission and thought this breakdown was valuable or helpful, please hit that subscribe button and turn on notifications. It’s free and it helps us doing this. Thanks for watching. And stick around for the next video starting now.