Getting into the medical marijuana business in Connecticut isn’t cheap, particularly if you want to produce marijuana. We share some of the costs to grow, test, sell, and purchase marijuana in our new report, Tracking the Connecticut Licensed Marijuana Economy: 2015 Edition, and you’d be surprised by some of the investments businesses are required to make to get into this rapidly growing industry.

For example, did you know that in order to get a license to legally produce marijuana for medicinal purposes in Connecticut, a business must have $2 million in proof of capitalization? The application fee and license registration fee alone cost a marijuana producer in Connecticut $100,000, and each year, the license has to be renewed for another $75,000!

That’s a lot of money, but marijuana producers can’t get financial help from banks and traditional lenders to cover the startup costs. And it’s not just loans that banks won’t offer. Connecticut banks also won’t open checking accounts for growers which they need to operate and pay their employees.

Bottom-line, the Connecticut marijuana economy is growing, but the industry is still in its early stages. While costs to consumers have been dropping in recent months as demand and supply have begun to balance out, the industry is still highly regulated, difficult to navigate, and expensive to operate in.

Let’s take a look at the fees businesses and individuals have to pay to be a part of the Connecticut marijuana economy.

Connecticut Marijuana License Fees for Businesses

Producer: Produces marijuana for Dispensaries.

  • $25,000 application fee (non-refundable)
  • $75,000 initial registration fee (non-refundable)
  • $75,000 annual registration renewal fee (non-refundable)

Dispensary Facility: Dispenses marijuana to Patients.

  • $1,000 application fee (non-refundable)
  • $5,000 registration fee (non-refundable)
  • $5,000 annual registration renewal fee (non-refundable)

Brand: A marijuana product produced by a Producer.

  • $25 application fee
  • No annual registration renewal fee

Connecticut Marijuana License Fees for Individuals

Producer Backer: A person who has a financial interest in a Producer.

  • $100 application fee
  • $100 annual registration renewal fee

Production Facility Employee: A person who is employed by a producer or has access to the production facility (such as an independent contractor).

  • $100 application fee
  • $100 annual registration renewal fee

Dispensary Facility Backer: A person who has a financial interest in a Dispensary Facility.

  • $100 application fee
  • $100 annual registration renewal fee

Dispensary Facility Employee: A person who is employed by a dispensary facility or has access to a dispensary facility (such as an independent contractor).

  • $50 application fee
  • $50 annual registration renewal fee

Dispensary Technician: A person who dispenses marijuana to at a Dispensary Facility to Patients.

  • $50 application fee
  • $50 annual registration renewal fee

Dispensary: A person who is qualified to acquire, possess, distribute, and dispense marijuana at a Dispensary Facility to Patients (must have an active pharmacist license in good standing).

  • $100 application fee
  • $100 annual registration renewal fee

Physician: A person who prescribes medical marijuana to Patients.

  • No application fee
  • No annual registration renewal fee

Patient: A person who purchases medical marijuana from Dispensary Facilities.

  • $100 registration fee
  • No annual registration renewal fee

Primary Caregiver: A person who purchases medical marijuana for a patient from a Dispensary Facility.

  • $25 registration fee
  • No annual registration renewal fee

Connecticut Medical Marijuana Licenses by the Numbers

That’s a lot of fees, and some of them are very high! Now, let’s take a closer look at how all of these fees compare.

 

Year 1 License Fees

In the first year, when a business or individual applies for (or registers for in the case of patients) a marijuana license in Connecticut, they’ll incur fees anywhere from $25 to $100,000 as shown in the chart below.

(Click the chart to enlarge the chart)

connecticut marijuana license fees chart year 1

 

Years 2+ License Fees

After the first year that a business or individual participates in the Connecticut licensed marijuana economy, the fee to participate might drop or stay the same, ranging anywhere from $0 to $75,000 as shown in the chart below.

(Click the chart to enlarge the chart)

connecticut marijuana license fees chart year 2 and beyond

Comparing License Fees

Clearly, the price to enter the Connecticut marijuana economy is much lower for doctors (the gatekeepers) and patients (the source of demand for the products and the entire industry). On the other hand, the price to supply that demand for producers and dispensary facilities is significantly higher.

The barrier to entry for producers and dispensary facilities is big, but in Connecticut, the medical marijuana program is self-funding. Someone has to pay for it, and under today’s licensing models, a small number of businesses pay high fees while a larger number of individuals pay lower fees. As a result, taxpayers pay nothing to run the program.

It will be interesting to watch how this intersection of government, regulation, and business evolves in the future. What do you think?