Earlier this month the Illinois Department of Agriculture announced proposed regulations for the state’s medical marijuana pilot program. Not only does the 71-page proposal assure that the state’s medical pot law will be the strictest in the US, the start-up fees totaling nearly $500,000 are causing controversy over potentially pricing out would-be cannabis entrepreneurs and small businesses.
If the regulations are approved, potential dispensary operators must pay a $5,000 nonrefundable application fee as well as a $30,000 permit fee (which must be renewed annually at a cost of $25,000). Additionally, hopeful pot business owners must demonstrate proof of $400,000 in assets.
For cultivation centers, the costs are even steeper: a $25,000 nonrefundable application fee and a $200,000 initial permit fee to be renewed at $100,000 yearly. Cultivators must prove they have a quarter of a million dollars in liquid assets.
If those fees aren’t prohibitive enough, local governments are allowed to add additional pot business fees as they see fit.
While the high overhead costs will almost certainly price many potential pot business people out of the game, activists are also concerned that many patients will be unable to afford medicinal pot.
Dan Linn, executive director of Illinois NORML, noted that the exorbitant fees are being proposed to keep the program cost-neutral for the state and to exclude “perceived trouble-makers” only seeking to cash in on the medical pot phenomenon. However, according to Linn, if too few patients can actually afford to purchase marijuana from the dispensaries, it could put pot providers and cultivators out of business and sink the four-year pilot program.
Illinois medical marijuana patients themselves face very strict regulations as they must be fingerprinted, undergo a background check and dole out $150 annually for a cannabis photo ID card.
The Illinois law allows for 22 cultivation centers and 60 dispensaries to be distributed throughout the state, with a maximum of 13 providers in the city of Chicago.
Though the state’s medical pot law went into effect on January 1, 2014, due to the ongoing regulatory process, officials anticipate awarding dispensary licenses this fall, with medicine first being available for patients sometime in 2015.