Proposed Connecticut Medical Marijuana Rules: Up to $100,000 in Initial Fees, Extensive Regs

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Opening a medical marijuana dispensary or cultivation operation in Connecticut will require lots of time, money, resources … and patience.

The state has released proposed rules governing the emerging medical cannabis industry, and they are some of the toughest and most extensive in the nation – by a wide margin. We’re talking an in-depth application and permitting process, up to $100,000 in application and registration fees and a host of operating policies and procedures.

The state’s Department of Consumer Protection – which drafted the rules – now has the entire 74-page document up on its website.

But if you don’t have time to read the lengthy proposal, here are some business-related highlights:

– Patients who have any of the previously outlined qualifying medical conditions must obtain written recommendations/certifications from state-licensed physicians to register for an MMJ card. The proposed rules stipulate that doctors must have a “bona fide” relationship with the patient – meaning they have examined the individual, determined the patient has a debilitating medical condition and explored various treatment options. The physician must also be able to provide follow-up care.

These rules are important for businesses, as they help entrepreneurs determine the potential market. Judging from the relatively limited list of qualifying medical conditions (compared to much more liberal programs in states like California and Colorado) and the requirements for getting a card, the patient base could be fairly limited.

– The state will issue “at least one dispensary facility permit” initially and could increase that number if needed based on demand. The permit-holder could employ up to five workers licensed to dispense marijuana. The language implies that Connecticut will take a very measured approach to permits, possibly allowing just one or a few dispensaries initially.

– The state will eventually post a notice outlining the dispensary permit application and selection process, which will also include the exact number of centers allowed to operate. Selection criteria will include everything from the “character and fitness” of the applicant to the proposed location of the dispensary.

– Applicants must be licensed pharmacists in the state and will be required to submit a detailed business outline that includes a financial statement, a description of the products/services offered, a strategy for preventing the diversion or theft of marijuana, a marketing plan and a thorough blueprint of the proposed facility. The blueprint must contain everything from the total square footage to the size of the counter used for selling marijuana.

– Dispensaries cannot set up shop within 1,000 feet of a school, playground, park, childcare facility, church, temple or other place of worship.

– All dispensary and cultivation site employees must be at least 18 years old and are required to register with the state’s MMJ program.

– Dispensaries and cultivation sites will have to report planned remodels and upgrades as well changes in ownership, name and location.

– The state will issue at least three producer licenses for the commercial cultivation of marijuana. In addition to the factors taken into account for dispensary permits, officials will consider the applicant’s financial position, ability to produce pharmaceutical-grade marijuana and overall expertise in agriculture.

– Cultivation site applicants will also have to put $2 million into an escrow account that the state can access if the operation falters and does not meet certain requirements.

– Applicants for cultivation permits will be required to submit a detailed business outline and blueprint similar to the ones required for dispensaries.

– Sample fees:

  •  Patient card – $100 annually
  •  Dispensary application fee – $1,000
  •  Dispensary permit/license fee – $5,000 annually
  •  Dispensary location change fee – $2,500 (includes application fee)
  •  Employee license fee to dispense marijuana – $100 annually
  •  Producer/cultivation application fee – $25,000
  •  Producer permit/license fee – $75,000
  •  Producer location change fee – $5,000 (includes application fee)

– Other regulations include everything from signage and security to testing, packaging and labeling.

The draft rules have been presented to the governor. Officials will now review and debate the proposal and make changes and tweaks where necessary. They have until July to draft a final set of recommended rules.

The state’s Department of Consumer Protection said marijuana could be available to patients by the end of the year. But that’s an aggressive, extremely optimistic timeline. It’s likely cultivation sites and dispensaries won’t actually open until well into 2014.