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Little pushback on Utah’s proposed medical marijuana fee schedule

Pharmacies could pay up to $69,500 for a license to sell cannabis

FILE - This Jan. 1, 2018 file photo shows marijuana plants for sale at Harborside marijuana dispensary in Oakland, Calif.
FILE - This Jan. 1, 2018 file photo shows marijuana plants for sale at Harborside marijuana dispensary in Oakland, Calif.
Mathew Sumner, Associated Press

SALT LAKE CITY — The Utah Department of Health faced little pushback Tuesday during a public hearing on its proposed fee schedule for the state’s medical marijuana program.

The fees are intended to bring in the revenue necessary to sustain the program and cover administrative costs, with more than $1.8 million estimated in fiscal year 2020 and $2.2 million in 2021. The program is meant to be revenue-neutral, officials said.

One of the about dozen people attending Tuesday’s meeting at the Utah Department of Health offices was with a Washington-based pharmacy interested in the Utah market.

Seth Bailey, with Seattle-based company Origins, said he didn’t know “if the demand is going to be allowed to generate the type of revenue that a pharmacy needs to generate to cover that fee. It’s a big fee, you know, $60,000-ish. So quite a bit of revenue needs to be generated.”

Pharmacy license fees range from $50,000 to $69,500 depending on if it is urban, rural or home delivery.

“I think it’s a way to handle paying for the program. There’s pros and cons to it,” Bailey said after the meeting. “From a pharmacy standpoint, which is what we’re looking to go into, it’s got to be part of our calculations and got to make sure that the investment’s going to be worth it.”

In Washington, medical cannabis has a built-in tax and the liquor board runs the program, he said.

“Still interested in Utah as a market, for sure. This is just another piece of the puzzle,” Bailey said. “Things are unfolding almost weekly for Utah’s market, so who knows what’ll happen next week?”

During the meeting, Bailey asked if pharmacies could potentially receive a tax break from the fees they will need to pay as a way to offset the costs of opening.

Richard Oborn, director for the Center of Medical Cannabis, said that is something that only the Legislature could add to the law and told Bailey he should talk to lawmakers.

The proposed fees include, but are not limited to: pharmacy application and licensing fees, pharmacy transaction fees, patient card fees, qualified medical provider registration fees, and courier application and licensing fees. Patient fees start with an initial $15 for a cannabis card plus a renewal fee that starts at 30 days for $5 and then can be purchased for $15 for six months.

Six-month renewal will be required for everyone except for terminally ill patients, Oborn said.

No one at the meeting commented on those fees. Representatives from advocate groups Utah Patients Coalition and the Libertas Institute last week said they expected the fees and do not object to them.

When asked if a patient would need to see a doctor in person each time they renewed their card, Oborn said they would not unless their doctor requested it.

He said the department may choose to increase, decrease or approve the proposed fees after hearing public comments that can be made through Oct. 1.

Comments may also be submitted by mail, to: Attn. Shari Watkins, P.O. Box 144003, Salt Lake City, UT 84114-4003; or email, to tjmetoyer-smith@utah.gov.