Just the hope of winning a Utah license to grow medical cannabis could cost contenders $10,000.
And that will be a fraction of the total bill for landing a license, which could carry a price tag of $100,000 a year.
Those figures, which appeared in draft rules for Utah’s new medical marijuana program, are just estimates and could change before the regulations are finalized. But they’re in the ballpark, said Melissa Ure, senior policy analyst with the Utah Department of Agriculture and Food.
“The legislation does require this program to fund itself,” Ure said in a Monday phone interview.
The license fees will offset the expense of adding personnel and buying equipment to inspect growing facilities, according to the draft rules released last week. The state’s agricultural department expects to spend more than $560,000 each year to oversee cannabis cultivation and manage a digital platform that will track each plant to the point of sale. And these costs will likely rise over time as the program grows, the state’s fiscal analysis states.
With 10 grower licenses initially up for grabs, revenues to the agriculture department could top $1.1 million the first year and stay at about $1 million over the following years as cultivators pay the renewal fee.
The proposed cost to become a grower is steep, said Tom Paskett, executive director of the Utah Cannabis Association, the state’s medical marijuana trade group. But it won’t deter individuals who are really serious about getting into the business, he added.
“If you don’t have those kinds of funds,” he said, “you probably don’t have the capacity to run this element of the business in a way that’s best going to serve the patient community.”
The draft rules also set detailed guidelines for everything from security to pesticide use. Not only are cannabis producers required to have video surveillance, but the proposed rules also stipulate what the camera resolution must be.
They also lay out what growers must do with cannabis waste to make sure it’s not diverted into the black market; the cultivators must grind down leaves and trimmings and mix them with yard waste, soil, cardboard, paper or other types of trash to render the cannabis unusable, according to the draft rules.
Ure said the state developed the proposed rules in consultation with industry representatives and officials from states that run cannabis programs. Agriculture officials will be accepting public comment on the draft over the coming month and are holding a hearing on the proposed rules June 5.
If the state makes substantial changes based on the input, Ure said, officials will republish the rules before they’re finalized.
Paskett said his group will review the proposed rules and probably submit comments.
“There aren’t really any major surprises in there,” he said. “It’s kind of what you’d expect, given Utah’s political leanings. ... I’ve heard folks compare some of our regulations to Arizona in their restrictiveness, so this is right about where you’d expect Utah to land.”