Thanks to a new bill advancing in the Iowa Senate, Iowans may soon be paying only $10 every year in medical cannabis license fees instead of the $100 a year they currently pay. The bill will also allow the licensing of more medical cannabis dispensaries beyond the five currently allowed by law as well as the creation of mobile dispensaries to cater to the state’s medical marijuana patients. Additionally, Senate Bill 1177 will allow medical cannabis dispensaries to recommend physicians who can prescribe medical cannabis to patients, something current law prohibits.
However, a subcommittee of the Senate noted that lawmakers will have to make changes to the fees and other sections of this bill to ensure the medical cannabis program receives enough revenue to cover state administration as well as testing. The Department of Public Health together with the University of Iowa, which runs the State Hygienic Laboratory, have said via representatives that without any changes, cutting medical cannabis card fees from $100 a year down to $10 every two years will leave them with insufficient revenue to run the program.
On top of drastically reducing medical cannabis card fees, the bill will also cut the fees incurred by medical cannabis manufacturers down to $2,000 annually. It will instead create income tax deductions for business-related expenses linked to manufacturing medical cannabis. According to Dane Schumann, from the medical cannabis manufacturer and dispenser MedPharm Iowa, state manufacturers have so far paid in excess of half a million dollars’ worth of fees to Iowa’s Department of Public Health ever since the program was launched, with dispensaries paying a similar sum.
Generally, manufacturers as well as dispensaries pay hefty fees to the state health department, Schumann says, even though state operators such as MedPharm need to keep overhead costs manageable to make sure that the program keeps running. Last year, medical cannabis sales totaled around $5 million, which is an increase from the $2.2 million recorded the year before. At current sales levels, a 6% tax would produce $210,000 annually.
Senator Joe Bolkcom, who supports the bill, notes that lawmakers initially intended for the program to be self-sustaining when they created it. At the moment, the state Department of Health receives between $600,000 and $700,000 each year to run the medical cannabis program, and lawmakers wouldn’t wish to eat into other segments of its operations to meet the cost of the program, he says. So while the $100 a year fee for medical cannabis cards was too high, he believes the proposed $10 paid after every two years is too low to afford the program’s running costs.
Meanwhile, many companies have realized that a significant number of consumers are interested in cannabis products containing THC, the psychoactive compound responsible for the “high” users experience. For example, Grapefruit USA Inc. (OTCQB: GPFT) is planning to nationally distribute its patented Hourglass Topical Cream made from hemp.
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