This month, an Arizona judge decided that while the state’s marijuana patient fees ($19.9 million) are more than double what the state spends to administer its marijuana program ($7.8 million), the court is not in a position to force the state to lower those fees.
In Arizona, medical marijuana patients are required to pay $150 per year to access the marijuana their doctors recommend for them. Caregivers are required to pay $200 per year, and the fee to register a minor in the state is $350. These fees are completely separate from the cost of the marijuana, itself.
For many patients who earn below average salaries, these fees are too much. One of the plaintiffs in the Arizona case lives on just $1,100 per month. Clearly, fees can create insurmountable barriers to entry to the medical marijuana economy for many patients. In fact, this is something discussed in detail in Cannabiz Media’s Marijuana Licensing Reference Guide: 2017 Edition.
Marijuana Patient Fees
Medical marijuana patients face barriers when they enter the marijuana economy and on a yearly basis to stay in the marijuana economy. As identified in Cannabiz Media’s Marijuana Licensing Guide: 2017 Edition, most states that have approved medical marijuana require that patients pay an initial fee, which can range from $1 to $200 depending on the state.
On the high end are Minnesota and Oregon with a $200 entry fee followed by Arizona at $150, Delaware at $125, and Nevada at $113. Connecticut, the District of Columbia, Illinois, and New Jersey each charge a $100 entry fee. All other states charge an entry fee of less than $100 with Washington the lowest at $1. Other states with very low entry fees are Montana ($5), Colorado ($15), and Alaska ($25).
Staying in the marijuana economy is also a problem for many patients because most states that have approved medical marijuana charge an annual patient renewal fee which ranges from $20 to $200 depending on the state.
The highest patient renewal fees are found in Minnesota ($200), Oregon ($200), and Arizona ($150) followed by Delaware ($125), the District of Columbia ($100), Illinois ($100), and New Jersey ($100). All other states with an annual patient renewal fee charge between $5 and $75 with Montana the lowest at $5 and Nevada the highest at $75.
Additional fees can also add up in some states. For example, many states charge a minor registration fee that ranges from $39 (Hawaii) to $350 (Arizona). Some states charge a patient lost identification card fee, which ranges from $10 in several states to $100 in others. For patients who want to change the information on their medical marijuana patient identification cards, some states charge $25 to do it.
Eight states offer discounts on medical marijuana fees for individuals who are part of the Supplemental Nutrition Assistance Program (SNAP) or other benefit or entitlement programs. For example, the initial patient fee and the renewal fee for eligible individuals in Arizona both drop from $150 to $75, and the minor registration fee drops from $350 to $275.
Marijuana Caregiver Fees
Caregivers are charged fees in most states that have approved medical marijuana, which create additional barriers to entry to the marijuana economy.
Most states charge a fee for caregivers to enter the marijuana economy. This fee ranges from $1 to $300 depending on the state. The highest caregiver fee is in Maine ($300) followed by Arizona ($200), and Delaware ($125). The District of Columbia, New Jersey, and Rhode Island each charge a $100 initial fee to caregivers. All other states charge less than $100 with Washington being the lowest ($1) followed by Michigan ($13) and Colorado ($15).
All states that charge an initial fee to caregivers also charge an annual fee to caregivers to stay in the marijuana economy except for Washington, which does not charge an annual renewal fee. That fee is highest in Maine ($300) and lowest in Michigan ($13). In fact, the initial fee for caregivers is equal to the renewal fee for caregivers in all states except Washington.
The Effects of Barriers to Entry for Medical Marijuana Patients
When patient fees are high, fewer patients can afford medical marijuana. As a result, demand at marijuana dispensaries will likely drop. This leads to lower sales at dispensaries. To make up for the lost revenue and profits, some dispensaries might raise prices. In fact, this trickle up effect could even negatively affect marijuana producers and growers.
In other words, it’s a vicious cycle of demand that can’t be met forcing prices up and ultimately decreasing demand in the legal market as a result. The winners in this situation appear to be the states, which are collecting a lot of money, and the black market, which can capture the sales the dispensaries will lose.
Susan Gunelius, Lead Analyst for Cannabiz Media and author of Marijuana Licensing Reference Guide: 2017 Edition, is also President & CEO of KeySplash Creative, Inc., a marketing communications company offering, copywriting, content marketing, email marketing, social media marketing, and strategic branding services. She spent the first half of her 25-year career directing marketing programs for AT&T and HSBC. Today, her clients include household brands like Citigroup, Cox Communications, Intuit, and more as well as small businesses around the world. Susan has written 11 marketing-related books, including the highly popular Content Marketing for Dummies, 30-Minute Social Media Marketing, Kick-ass Copywriting in 10 Easy Steps, The Ultimate Guide to Email Marketing, and she is a popular marketing and branding keynote speaker. She is also a Certified Career Coach and Founder and Editor in Chief of Women on Business, an award-winning blog for business women. Susan holds a B.S. in marketing and an M.B.A in management and strategy.