Future medical cannabis users and sellers now have a better idea about how much they might pay to join Utah’s medical marijuana program. After more changes to the cannabis program were announced during last week’s special session, the Department of Health unveiled the range of fees it aims to charge for registration, background checks, and yearly licensing.
Based on the estimated number of users and pharmacies applying for the program, the fees are expected to generate nearly $2.5 million for fiscal year 2020, which would likely grow slightly each year as more patients join the system. At a public hearing Tuesday, Rich Oborn, director of the Center for Medical Cannabis at the Utah Department of Health, says the fees will not exceed the costs of managing the program, as they legally aren’t allowed to generate a profit.
Future patients can expect to pay around $35 for their first year in the program, which includes an initial $15 medical card, a mandatory 30-day registration renewal, and an additional $15 renewal six months later.
Pharmacies will have to pay significantly more. For the chance to become one of the 14 authorized dispensaries, pharmacy hopefuls will have to pay a $2,500 application fee and, if selected, yearly license fees ranging from $52,500 to $69,500. The cost depends on whether they are located in rural or urban counties and whether or not they will provide home deliveries. Pharmacies in urban counties offering home delivery will pay the most.
Chelsea Tavares is with one of those hopeful pharmacies, the Utah Valley-based CannaBetter. She said she was pleasantly surprised by the latest proposals, as earlier versions had suggested as much as $200,000 annually. She said she’s more worried about the burden on patients. She has seen them struggle with each new bureaucratic hurdle they’re forced to jump through.
“When you choose to start a business, you’re choosing to accept all of the difficulties that go along with that,” she said. “But we want the patients to be able to have this process be simple and inexpensive. [And even] one more task can be daunting sometimes to a patient.”
Seth Bailey of the Washington-based Origins Cannabis was also at the public hearing. His company is looking to expand into Utah, and while he said he thinks the demand for medical cannabis is strong here, he wonders whether the system’s constraints — such as the limits on the total number of patients and pharmacies — will allow the 14 chosen pharmacies to make enough to offset the yearly fees.
He says it’s a risk, but that’s always a factor.
“I don’t think any market has figured this out by any means,” he said. “It just makes us pause to do our own calculus on this and see if we want to invest.”
The public comment period closes Tuesday, Oct. 1. The final numbers will be announced mid-October.