Jim Finnel
Fallen Cannabis Warrior & Ex News Moderator
At some point next year, medical marijuana will finally be available to qualifying patients in the District. The problem? It might be too expensive for anyone to grow it or sell it, much less for anyone to actually afford to buy it.
A comprehensive set of rules and regulations published by Mayor Adrian Fenty's administration on August 6 outline a tightly restricted system where growing, selling and buying marijuana for medicinal use is subject to a number of bureaucratic loopholes. Amongst those are rules, regulations and fees for anyone looking to operate one of the city's five dispensaries (where patients will get the marijuana) and 10 cultivation centers (where the marijuana will be grown).
Just filing an application to run a dispensary or cultivation will set any prospective entrepreneurs back $5,000, while the annual licensing fee for a cultivation will cost a cool $5,000 and a dispensary a stiff $10,000. And that's not even including registration costs for managers, employees, officers, and so on. Needless to say, start-up and operating costs won't be low.
The D.C. Patients' Cooperative, a local non-profit that has advocated on behalf of the system and is planning on opening an Adams Morgan-based dispensary, recently outlined its grievances with the fees in comments submitted to the proposed rules. (The rules were open to 45 days of public comment, and will be voted on taken up by the D.C. Council by October 19 at some point this Fall.) According to the group, the fees aren't only excessive, but might make opening or running a dispensary or cultivation center prohibitively expensive.
In reference to the annual fee for operating a dispensary, the group pointed out that health care providers and pharmacies only pay $130 and $280 a year, respectively, to distribute controlled substances. "It is difficult to understand the rationale or justification for charging an annual fee for registration of a dispensary that is 30-50 times the amount charged for fees for other licenses needed to distribute controlled substances for medical purposes," it stated in its comments to the rules.
Additionally, the fees charged to dispensaries -- which will be regulated by the Alcoholic Beverage Regulation Administration -- are higher than those charged to run a bar in the District. "Even a Class A retailer -- a liquor store selling hard spirits for off-premises consumption -- pays an annual licensing fee of $2,600. A bar serving less than 100 persons pays an annual licensing fee of only $1,300 and a bar serving more than 200 persons pays an annual licensing fee of $3,210. If anything, following the ABRA model, the fees for dispensaries should be lower than those for bars, since a dispensary can only serve a limited universe of qualifying patients, while a bar can serve an unlimited number of persons as long as its licensed capacity is not exceeded at any one time."
Fees for a cultivation center may well be even more prohibitive, the group argues, and if there's no one that can afford to grow the stuff, well, then the whole program doesn't even get off the ground. The $5,000 annual fee coupled with a rule limiting the amount of plants that can be grown at any one time -- 95 -- may mean that if anyone actually gets into the business, the cost to the consumer may be significant. "If the annual licensing fee is $5,000, the cost of the annual fee alone would amount to $17.54 per plant, not including any other costs. This cost, plus the application fee, will be passed on and marked up by the dispensary, resulting in very significant costs to the qualifying patient," wrote the group, which prefers an annual fee of $1,500, or $5 per plant.
In comments of its own, the Marijuana Policy Project sounded similar concerns, writing that "businesses will not have a high sales volume that will enable them to generate enough revenue to justify the initial investment." The group proposed application fees of $1,000 to $2,000 and annual registration fees of no more than $5,000.
In August, the City Paper crunched the numbers and found that opening and running a dispensary alone may cost up to $500,000 a year. Of course, if the system weren't so restrictive, that amount of marijuana probably wouldn't be hard to sell. But it is. And that might make jumping in to open a dispensary or cultivation center something of a difficult proposition, or, worse yet, make the marijuana so expensive that a qualifying patient could well do better just buying from their local dealer.
NewsHawk: User: 420 MAGAZINE
Source: dcist.com
Author: Martin Austermuhle
Copyright: 2010 Gothamist LLC.
Contact: DCist: Washington DC News, Food, Arts & Events
Website: Medical Marijuana Fees May Price Everyone Out - DCist
A comprehensive set of rules and regulations published by Mayor Adrian Fenty's administration on August 6 outline a tightly restricted system where growing, selling and buying marijuana for medicinal use is subject to a number of bureaucratic loopholes. Amongst those are rules, regulations and fees for anyone looking to operate one of the city's five dispensaries (where patients will get the marijuana) and 10 cultivation centers (where the marijuana will be grown).
Just filing an application to run a dispensary or cultivation will set any prospective entrepreneurs back $5,000, while the annual licensing fee for a cultivation will cost a cool $5,000 and a dispensary a stiff $10,000. And that's not even including registration costs for managers, employees, officers, and so on. Needless to say, start-up and operating costs won't be low.
The D.C. Patients' Cooperative, a local non-profit that has advocated on behalf of the system and is planning on opening an Adams Morgan-based dispensary, recently outlined its grievances with the fees in comments submitted to the proposed rules. (The rules were open to 45 days of public comment, and will be voted on taken up by the D.C. Council by October 19 at some point this Fall.) According to the group, the fees aren't only excessive, but might make opening or running a dispensary or cultivation center prohibitively expensive.
In reference to the annual fee for operating a dispensary, the group pointed out that health care providers and pharmacies only pay $130 and $280 a year, respectively, to distribute controlled substances. "It is difficult to understand the rationale or justification for charging an annual fee for registration of a dispensary that is 30-50 times the amount charged for fees for other licenses needed to distribute controlled substances for medical purposes," it stated in its comments to the rules.
Additionally, the fees charged to dispensaries -- which will be regulated by the Alcoholic Beverage Regulation Administration -- are higher than those charged to run a bar in the District. "Even a Class A retailer -- a liquor store selling hard spirits for off-premises consumption -- pays an annual licensing fee of $2,600. A bar serving less than 100 persons pays an annual licensing fee of only $1,300 and a bar serving more than 200 persons pays an annual licensing fee of $3,210. If anything, following the ABRA model, the fees for dispensaries should be lower than those for bars, since a dispensary can only serve a limited universe of qualifying patients, while a bar can serve an unlimited number of persons as long as its licensed capacity is not exceeded at any one time."
Fees for a cultivation center may well be even more prohibitive, the group argues, and if there's no one that can afford to grow the stuff, well, then the whole program doesn't even get off the ground. The $5,000 annual fee coupled with a rule limiting the amount of plants that can be grown at any one time -- 95 -- may mean that if anyone actually gets into the business, the cost to the consumer may be significant. "If the annual licensing fee is $5,000, the cost of the annual fee alone would amount to $17.54 per plant, not including any other costs. This cost, plus the application fee, will be passed on and marked up by the dispensary, resulting in very significant costs to the qualifying patient," wrote the group, which prefers an annual fee of $1,500, or $5 per plant.
In comments of its own, the Marijuana Policy Project sounded similar concerns, writing that "businesses will not have a high sales volume that will enable them to generate enough revenue to justify the initial investment." The group proposed application fees of $1,000 to $2,000 and annual registration fees of no more than $5,000.
In August, the City Paper crunched the numbers and found that opening and running a dispensary alone may cost up to $500,000 a year. Of course, if the system weren't so restrictive, that amount of marijuana probably wouldn't be hard to sell. But it is. And that might make jumping in to open a dispensary or cultivation center something of a difficult proposition, or, worse yet, make the marijuana so expensive that a qualifying patient could well do better just buying from their local dealer.
NewsHawk: User: 420 MAGAZINE
Source: dcist.com
Author: Martin Austermuhle
Copyright: 2010 Gothamist LLC.
Contact: DCist: Washington DC News, Food, Arts & Events
Website: Medical Marijuana Fees May Price Everyone Out - DCist
