Marijuana commission proposes $125,000 grower fees

Licenses for growing, distributing medical marijuana could be costly

September 23, 2014|By Erin Cox | The Baltimore Sun

Running a medical marijuana operation could cost each grower more than $125,000 a year in fees, a sum so steep some officials believe it may shut out small businesses.

Maryland's medical marijuana commission is tentatively proposing that fee for each of the 15 potential growers envisioned for the state's new program. The panel also is recommending a $40,000-a-year charge for dispensaries, according to a draft plan expected to be released for public comment Wednesday.

Those license fees — atop as much as $6,000 in application fees — would finance the state's nascent medical marijuana program.

"The volume of these fees, for probably many of us, takes our breath away," commissioner Eric E. Sterling said at meeting in Annapolis Tuesday.

"It is simply a reflection that the General Assembly has put the operation of this on the growers and the dispensaries, and ultimately upon the patients," he said. "There is no taxpayer money, according to the General Assembly, that is going to finance this."

The commission plans to meet again Oct. 16, when it may take its final vote on the proposed regulations. That plan will be forwarded to state health secretary Dr. Joshua M. Sharfstein for review and then go to a panel of state lawmakers for final approval.

Staff for the state's medical marijuana commission said they estimate about 45,000 patients a year will apply to use medical marijuana. With a complicated computerized system to verify patient eligibility, intensive public education campaigns and a team of inspectors, officials expect the program to cost about $3.5 million a year.

"We are going to need bodies in the street. We're going to need people in the back offices," said Sharon Bloom, acting executive director of the commission.

But even as commissioners voted Tuesday to float the fees among other draft proposals, several expressed concern.

"They're high," commissioner Deborah R. Miran said. "Maybe in some cases, for smaller growers, smaller operations, they could be prohibitively high."

Attorney John A. Pica represents a coalition that wants to open a growing and dispensing operation in Baltimore. He said the fees unveiled Tuesday appeared unnecessarily high, particularly given that the commission anticipates issuing 15 growing licenses but expects less than 1 percent of the population to seek medical marijuana.

"The number of licenses they're issuing seems to be incongruent with their perceived demand," Pica said. And with high overhead costs and low demand, Pica said, growers might be forced to increase medical marijuana prices to make ends meet, which would drive patients to the black market.

"You have to be careful that the price isn't too high, or you invite the same scenario you had in Prohibition," he said.

The cost to operate a growing or dispensing business in Maryland is one of the last major outstanding issues the medical marijuana commission must decide. Each of the commission's fall meetings have been attended primarily by dozens of potential growers or dispensaries seeking information about the process.

Advocates for medical marijuana plan to host a "Maryland Canna-Business Seminar" in Bethesda next month for entrepreneurs to learn about how to launch a cannabis business.

"You've waited long enough. Maryland's medical marijuana program is finally here!" read fliers distributed by the Marijuana Policy Project at Tuesday's meeting.

State lawmakers spent years debating how to legalize medical marijuana in Maryland, and in 2013 passed a law that relied on academic centers and never got off the ground. This year, the legislature rewrote the law to make the program easier to administer and put the medical marijuana commission in charge of writing the rules to implement it.

ecox@baltsun.com

twitter.com/ErinatTheSun

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