Ohio sellers face high costs of business
Potential medical marijuana dispensary owners in Ohio will have to shell out some green to sell some green if the latest round of suggested dispensary fees become law.
Prospective business owners may have to pay more than $75,000 in state fees, and that’s before factoring in costs of a storefront, product or employee salaries.
The dispensary fee structure proposed by the Medical Marijuana Control Program, the state agency charged with regulating the nascent industry, must undergo a public hearing Tuesday and a review from the Joint Committee on Agency Rule Review before taking effect.
The money collected from the fees will go into a fund shared by the Control Program and the Department of Commerce to pay for the former, according to Cameron McNamee, spokeswoman with the Ohio Board of Pharmacy.
Although the fees seem a high barrier to entry for potential business owners, advocates say they’re in line with other heavily regulated states in the Midwest and along the East Coast.
Chris Lindsey, senior legislative counsel with the Marijuana Policy Project, said the “dollar amounts are not wholly unreasonable.” The bigger barrier, he said, is the regulatory environment combined with the competitive licensing structure.
“Our concern is that Ohio is trying to estimate how big the market is going to be and set limits based on that estimate,” Lindsey said.
The highest cost faced by potential business owners is the $70,000 nonrefundable operating fee, which would have to be renewed every two years. McNamee said that upon approval, dispensary owners would be given a provisional license and have six months to get the certificate. The period is intended to ensure they meet regulatory standards.
Before paying the $70,000, business owners must pay more than $5,000 for the licensing fee. They’ll pay an additional $500 fee for each associated key employee, $250 for each key employee, and $100 for each support employee.
If a dispensary owner wants to advertise their business, they’ll have to pay $100 per advertisement before it’s approved.
“It’s a fee structure that we feel can support the regulatory efforts to ensure a safe product for the citizens of Ohio,” McNamee said.
A benefit of Ohio’s system, noted by both Lindsey and McNamee, is the flexibility it provides to adapt to the market as it develops. Only 60 dispensaries will be approved from what is expected to be a flood of applications, according to McNamee. The Control Program, however, has the authority to expand that number based on market demand.
Another potentially issue is the requirement that 15 percent of dispensaries be minority-owned. Lindsey said it’s good that lawmakers are considering diversity within the industry, especially considering the disproportionate numbers of black men jailed for nonviolent marijuana offenses. However, he said anytime government makes decisions based on race it opens the possibility of litigation.
He expects legal challenges to the 15 percent provision, especially given the amount of money sure to be invested in the application process.