Medical marijuana regulations recently proposed in Illinois could be a major buzzkill for the state’s entrepreneurs and other small business owners.
Under the proposal from the Illinois Department of Agriculture, legal pot businesses would need approximately half a million dollars in startup costs. The program would require pot dispensaries to pay a $5,000 nonrefundable application fee, show proof of $400,000 in assets, pay a $30,000 permit fee and fork over a $25,000 yearly permit renewal fee.
Cultivation centers would be required to pony up a $25,000 nonrefundable application fee, prove they have $250,000 in liquid assets, pay a $200,000 fee once the permit is approved and pay a $100,000 renewal fee.
Additionally, local governments would be able to charge their own dispensary and cultivation center fees.
"Probably 50 percent of the wannabes are now out," Joseph Friedman, a suburban Chicago pharmacist hoping to opening a dispensary, told the Chicago Tribune. "This is going to bring out just the serious players who are well-capitalized and well-credentialed."
Regulators have been slowly hammering out the various rules for potential users, growers and dispensary vendors since the state’s medical weed law — the strictest in the nation — went into effect earlier this year. Medical marijuana advocates worry the new proposals for dispensaries and cultivation centers could price out suffering patients and ultimately threaten the success of the nascent pilot program.
"This program was designed, proposed and passed to help sick people," Dan Linn, the executive director of the Illinois chapter of the National Organization to Reform Marijuana Laws (NORML), told The Huffington Post. "But now it seems the state has wrapped itself up in the bureaucracy and this is all going to be on the backs of sick people."
Linn said the some of the high regulation fees will help keep the pilot program cost-neutral for the state and also weed out "the perceived trouble makers" hoping to get rich quick in the medical marijuana gold rush.
The downside, Linn said, is what he calls the "trickle-down" cost to medical marijuana patients. "A lot them are sick and on disability and can’t afford the [high price of] legal medical marijuana. You’ll see patients who sign up for a card and never use it."
Linn notes that if the fees are passed on to customers and medical weed becomes significantly more expensive than that on the street, dispensaries and clinics won’t have enough business. "Ultimately," he said, "that could make or break this program."
Real estate is shaping up to be another challenge for potential medical marijuana businesses, with local governments in the Chicagoland area tinkering with zoning laws that could restrict pot businesses’ already limited options.
Other proposed regulations would require medical marijuana patients to be fingerprinted, undergo a background check and pay $150 yearly fee for a special photo ID card, the Associated Press reports.
Regulators will take public input on the proposals until Feb. 27.