How Much Do Dispensaries Make? Revenue and Margins in 2026

How much do dispensaries make?

Most US dispensaries gross roughly $1.5 million to $3 million a year, with strong urban stores clearing $5 million and struggling ones under $500,000. Gross margin usually lands between 40% and 60%. Net margin is the problem: after Section 280E, published benchmarks put it at 5% to 12%, and often at zero.

Last updated July 2026. Every figure below is third-party reported, attributed in the prose, and given as a range. We are a directory, not your accountant. Nothing here is financial or tax advice.

Are dispensaries profitable?

Most are not, at least not after tax. Whitney Economics has repeatedly found that only about a quarter of US cannabis operators are profitable on an after-tax basis, against roughly 65% of all US small businesses. That gap has almost nothing to do with demand and almost everything to do with a single line in the federal tax code.

Note the disagreement in the source itself, because it matters. Whitney's widely cited 24.4% figure comes from an earlier business conditions survey, while its 2024 survey put overall profitability at 27.3%. Both are self-reported operator surveys, not audited filings. The honest read is "roughly one in four," not a precise number.

The market backdrop got harder, not easier. Whitney Economics reported that US regulated cannabis revenue fell in 2025 for the first time in the legal market's history, to about $29.1 billion, and it forecasts $30.5 billion for 2026, a 4.9% recovery. That forecast is itself a markdown: Whitney had previously projected 13.4% growth for 2026 before cutting it, citing price compression as a major variable.

What is the average dispensary revenue?

Do the arithmetic yourself before trusting anyone's headline. Whitney Economics puts 2025 US legal cannabis revenue at about $29.1 billion. Industry counts, including those cited by MJBizDaily, put the country at roughly 15,000 licensed dispensaries. That works out to an average near $1.9 million per store, below the $2 million to $3 million figure most industry blogs quote.

Both can be true. Averages hide a brutal distribution. Cannabis Industry Lawyer, in a February 2026 breakdown, describes $2 million to $3 million as a reasonable baseline for a single adult-use store in a functioning market, high-performing urban locations at $5 million to $8 million or more, and saturated-market stores under $500,000. Older MJBiz Factbook survey data pointed the same direction, with a majority of surveyed owners reporting revenue at or below $500,000 while a quarter cleared $1 million.

So the median store makes considerably less than the average store. If a broker hands you "$2.5 million typical" with no distribution attached, they are quoting the tail, not the middle.

What is the average profit margin for a dispensary?

Gross margin runs about 45% to 55% for a well-run shop, per Northstar Financial Advisory's January 2025 benchmark analysis. EBITDA typically lands at 8% to 22%. After-tax net margin, once 280E is applied, compresses to 5% to 12%, and Northstar notes many operators sit at breakeven or negative. The distance between gross and net is where dispensaries die.

Here is what that looks like on a single store, built from Northstar's published percentages. The numbers are illustrative, not a real company, and state tax treatment varies widely.

Line item	Amount	% of revenue	Note
Revenue	$2,500,000	100%	Mid-range single store
Product COGS	($1,250,000)	50%	Deductible even under 280E
Gross profit	$1,250,000	50%	Within Northstar's 45% to 55% band
Operating expenses	($1,050,000)	42%	Labor, rent, compliance, marketing, banking
EBITDA	$200,000	8%	Looks like a real business here
Federal tax if 280E applies	($262,500)	10.5%	21% of gross profit, not of EBITDA
Net if 280E applies	($62,500)	-2.5%	Profitable store, negative owner
Federal tax if 280E does not apply	($42,000)	1.7%	21% of actual pre-tax profit
Net if 280E does not apply	$158,000	6.3%	Same store, same sales, different tax code

Illustrative model built on margin and operating-expense ranges published by Northstar Financial Advisory (January 2025). Federal rate shown at the 21% C-corp rate; state conformity to 280E varies. Not tax advice.

Read that table twice. The store did nothing wrong. It hit a 50% gross margin and an 8% EBITDA margin, which are respectable retail numbers. The tax code turned a $200,000 profit into a $62,500 loss. That is the whole story of dispensary economics, and it is why "are dispensaries profitable" gets a different answer depending on which line of the P&L the person answering is looking at.

Northstar's expense ranges are worth committing to memory, because they are where the controllable money is: labor at 18% to 28% of revenue, occupancy at 8% to 15%, compliance at 3% to 6%, and marketing at 3% to 8%. Most owners can recite their sales number and cannot recite these. If your books live in a POS export and a shoebox, the first move is to turn your bookkeeping export into a real P&L you can actually read, because you cannot manage a 42% operating expense line you have never seen laid out properly.

Why are dispensaries taxed so high?

Because of IRC Section 280E, which bars any business "trafficking" in Schedule I or Schedule II controlled substances from deducting ordinary business expenses. A dispensary can subtract the cost of the product it buys, and essentially nothing else. Rent, payroll, security, marketing, and utilities are all non-deductible for federal purposes.

The result is a tax on gross profit rather than on profit. Northstar reports that effective tax rates under 280E routinely land between 60% and 80% of pre-tax income, against 25% to 35% for a comparable conventional retailer. A dispensary and a liquor store with identical P&Ls do not take home identical money, and it is not close.

What changed in 2026, and does 280E still apply?

Partially, and it depends on your license. On April 23, 2026, the Department of Justice issued an order moving FDA-approved marijuana drug products and marijuana held under a qualifying state medical license to Schedule III. Because 280E reaches only Schedule I and Schedule II, that order makes 280E inapplicable to state-licensed medical operators, per analyses from Foley & Lardner and Holland & Knight.

Adult-use operators got nothing. Both firms are explicit that cannabis outside the FDA-approved and state-licensed medical systems stays in Schedule I, and that 280E continues to apply to businesses running solely on a recreational license. An expedited administrative hearing on broader rescheduling opened June 29, 2026 and was set to conclude no later than July 15, 2026, though a hearing concluding is not the same as a final rule, and none had extended Schedule III to adult-use as of this writing. Until that process resolves, a medical store and the adult-use store next door are operating under two different tax regimes on the same block. If you hold both license types, this is a conversation to have with a cannabis CPA this quarter, not next year.

How much does a dispensary owner make a year?

For a well-run single store grossing around $3 million, Cannabis Industry Lawyer's February 2026 analysis puts owner compensation at roughly $150,000 to $300,000 a year in combined salary and distributions. That assumes the store is genuinely profitable after 280E, which, as the survey data says, roughly three in four operators are not.

Two things skew this. Owner salary is an operating expense, so under 280E it is paid with post-tax dollars in a way it would not be in normal retail. And plenty of owners in mature markets pay themselves a modest salary while the entity loses money, which is a wage, not a return on capital. Ask any seller for the distribution history, not the salary.

What is dispensary revenue per square foot?

The number everyone quotes is roughly $974 per square foot per year, from an MJBiz Factbook benchmark, higher than a Whole Foods and roughly triple the $325 or so that average US retail generates. Treat it with real caution: that figure traces back to Factbook data popularized in the late 2010s and has not been publicly refreshed since.

Given that national revenue fell in 2025 while store counts grew, current revenue per square foot is very likely below the number in circulation. The metric is still worth tracking, just track your own. Take trailing twelve-month revenue, divide by sales floor square footage (not total leased space), and watch the trend quarter over quarter. Direction beats a stale benchmark.

Mature vs emerging markets: the same store, different money

Where you operate sets your margin ceiling before you make a single decision. Northstar's benchmarks split cleanly between limited-license states, where retail pricing power survives, and mature open-license states, where it does not.

Metric	Limited-license / emerging (IL, NJ, CT, FL)	Mature open-license (CO, OR, MI)
Gross margin	52% to 60%	40% to 48%
EBITDA margin	15% to 25%	5% to 15%
After-tax net margin (under 280E)	12% to 18% with competent tax planning	3% to 8%, frequently negative
Why	Few licenses support retail pricing power	Wholesale costs fell, but retail prices fell with them
Main risk	The state issues more licenses and you become column two	Competing on price against a shop that will go to zero margin

Margin ranges published by Northstar Financial Advisory (January 2025). State groupings are theirs. Individual results vary by local tax, rent, and competition.

The trap in column two is the one operators keep walking into. Cheaper wholesale looks like a margin gift and is not. LeafLink's 2026 Wholesale Cannabis Pricing Guide, drawn from more than 400,000 SKUs across 18 US markets in 2025, reported flower down 5.4% year over year, concentrates down 7.5%, pre-rolls down 10.3%, and cartridges down 12.0%, with edibles roughly flat at up 1.7%. Your cost dropped. So did the shelf price, because the shop down the street got the same discount and passed it on.

What actually moves the revenue line

Strip it back and store revenue is three things you can name: how many people walk in, what they spend, and how often they come back. Two of those are marketing problems.

Basket size is under pressure and is not where the win is. Flowhub's retail data puts walk-in average order value at $50.56 against $68.01 online, with digital carts averaging 3.9 items versus 2.7 for walk-ins, and reports that average cart size slid from 2.9 to 2.7 items over two years. Dutchie reports a similar pattern, with shoppers spending about 17% more per order online than in store. Pushing online ordering is worth real money. It is also a percentage improvement on a shrinking number.

Traffic and repeat visits carry the load. Run it against the illustrative P&L above: at a 50% gross margin, each additional customer visit at a $50 basket contributes $25. In a mature market where net margin is 3% to 8% before 280E finishes with you, a few hundred extra visits a month is the difference between a distribution and a capital call. That is why the marketing line, at 3% to 8% of revenue per Northstar, is the one place where spending less is often the expensive choice.

The mechanics are unglamorous and well documented. Get found by people already searching to buy in your ZIP code, get the menu in front of them before they pick a competitor, and give them a reason to come back a second and third time. Most of that work sits in dispensary marketing fundamentals: a verified Google Business Profile, review velocity, a live menu, and directory presence where high-intent shoppers browse. If you want a verified, licensed listing with your menu and daily deals in front of local shoppers, you can list your dispensary with us, and our listing plans start at $99 a month with the price printed on the page.

The short version

A typical US dispensary grosses somewhere between $1.5 million and $3 million, holds 40% to 60% gross margin, and keeps 5% to 12% after tax if it keeps anything at all. Roughly one in four operators is profitable after tax. The single biggest variable is 280E, which as of the April 2026 DOJ order no longer applies to state-licensed medical operators but still applies to adult-use. You cannot vote your way out of the tax code this quarter. You can move the traffic and repeat-visit lines, and at a 50% gross margin those are the levers with the shortest path to your net.

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