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Industry Buzz October 2017, Marijuana cultivator licenses – High cost for market entry

Marijuana cultivator licenses

High cost for market entry

 While regulations and licensing requirements vary from state to state, one message is very clear: buying into the business circumvents most of the low to middle class. As more states adopt the legalization of medicinal marijuana, the amount of money being shelled out prior to the exorbitant costs related to facilities/property, materials and labor, are stacked in favor of the ‘haves’, not the ‘have-nots’. Examples of recent license/application fee costs for the cultivation of cannabis include:

  • Ohio – Eighteen licenses were granted for up to 15,000 square feet of cultivation. Application fees ran $20,000 while licensing fees cost $180,000.
  • New York – Application fees ran $10,000 while registration fees were a whopping $200,000.
  • Pennsylvania – Required $10,000 for application fees and $200,000 for a license deposit

What do the licensing fees cover?

Most states allocate the funds to support costs associated with running/regulating the medical marijuana program (staff members, rule writing, regulating) with the lion’s share being used for related salaries. And what about those non-refundable application fees received from the individuals that did not win a license? . . . . sort of draws some parallels to state lotteries funding education.

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