Cannabis pharmacies could owe Utah officials between $50,000 and $69,500 each year for their operating licenses, and each medical marijuana purchase at these businesses could pump another $3 into state coffers.
These potential fees and many more are part of the Utah Department of Health’s plan for offsetting the costs of regulating medical cannabis in the state. The agency on Tuesday held a public hearing about the proposed fees — which are projected to bring in a collective $1.4 million in revenue the first year and about $2.2 million the second.
Rich Oborn, who heads the health department’s Center for Medical Cannabis, said the agency set the fees with an eye toward breaking even on the marijuana program.
“So we’re not making a profit,” he said during the meeting.
Still, a representative from a Washington-based company interested in opening a pharmacy in Utah called the proposed fees a “big pill to swallow." Seth Bailey of Origins Cannabis was one of the few people to comment or ask questions Tuesday about the 34 proposed medical cannabis fees, which the state’s health department will refine based on feedback.
In an interview, Bailey added that the proposed pharmacy licensing fee, while substantial, probably won’t keep people out of the business altogether.
“If there’s enough revenue to cover all of the expenses, including this annual due that’s an obligation to the pharmacy, then it probably works,” he said.
And Laura Cabanilla, co-owner of CannaBetter, said she feared the agency would impose even higher business fees.
“I think that they spread it out" instead of saddling pharmacies with the full burden of the program costs, said Cabanilla, a former Provo City Council member whose company is looking at opening a pharmacy in Utah County.
The department of health has proposed pharmacy license fees that vary based in part on location; businesses in the more urban Salt Lake, Utah, Davis and Weber counties would have to pay higher rates. Licenses for pharmacies that offer home delivery would also cost slightly more than walk-in-only retailers.
During a special session earlier this month, Utah lawmakers increased the number of available private pharmacy licenses from seven to 14 and created the option for private couriers to deliver cannabis shipments to patients’ homes.
Under the health department’s suggested fee schedule, these private couriers would pay $2,500 for initial licensing and $1,000 for yearly renewals.
Physicians and other medical providers who want to recommend cannabis treatments will also have to register with the state, with a proposed cost of $300 to sign up initially and $50 for each two-year renewal.
Patient cards could cost $15 apiece at first, then $5 for the 30-day renewal and $15 for each six-month renewal thereafter. Patient caregivers and guardians would pay $66.25 for initial registration in the program, according to the health department’s plan.
Desiree Hennessy, director of the Utah Patients Coalition, said the potential patient card costs don’t seem overly burdensome, although the department’s proposed fee of $3 per cannabis transaction is a bit higher than she’d like.
“We don’t have very many rich patients,” she explained in a phone interview.
While these regulatory costs seem within reach for most patients, Hennessy said she remains concerned about the pricing of the cannabis treatments themselves. State provisions requiring a licensed pharmacist to staff a pharmacy at all times and stipulating that raw cannabis flower must be sold in a blister pack have the potential to push product costs upward, she said.
“Those are the kinks that we need to be working out so we can get the cheapest or most affordable product on the shelves,” Hennessy said, adding that her coalition hopes to address some of these concerns when the Utah Legislature meets in January.
Other fees proposed by the state health department relate to registration of cannabis pharmacy employees, registration of courier company employees and background checks for cannabis business owners.
The agency will continue to accept public comments about the proposed fees through Oct. 1, after which it will finalize them.