Medical marijuana growers would be subject to a $200 annual fee for every patient they grow for under a proposal being considered by the Oregon Health Authority.
Medical marijuana growers in Oregon can grow cannabis for up to four patients. Under current rules, the state charges $50 for every patient a grower takes on, but recent changes that expanded the health authority’s oversight of production and processing prompted officials to propose the steeper fees to help cover the agency’s expenses.
The fee increase is estimated to boost revenue from $1.3 million to $5.2 million in the 2015-17 budget cycle.
People who grow only for themselves will not be subject to any additional expense. The cost of obtaining an Oregon medical marijuana card — $200 – also remains the same. Oregon, along with Minnesota and New Jersey, have the highest medical marijuana patient fees in the country, though New Jersey’s card is valid for two years, according to ProCon.org, a nonpartisan group that tracks controversial issues.
Oregon’s proposed fee increase was discussed at a meeting Monday of the health authority’s rules advisory committee, which is in the process of drafting regulations for the medical marijuana industry as well as parts of the recreational marijuana industry, such as serving sizes. The fees, if finalized, would go into effect March 1.
The agency also proposed a $4,000 annual fee for medical marijuana processors, people who extract cannabis or produce concentrates.
Oregon’s medical marijuana patients have long complained about cost of obtaining a card, revenue that is used to fund the state’s medical marijuana program, including dispensary regulation, as well as a wide range of public health efforts.
In the 2013-15 budget cycle, medical marijuana fees generated about $22.1 million. It costs $8.1 million to administer the medical marijuana program, which employs 38 people. The state spends another $8.8 million in revenue generated by medical marijuana fees on other public health programs, including emergency medical services, clean drinking water programs, contraceptive care, school-based health centers and other public health efforts.
The agency said the medical marijuana budget, which started with a beginning balance, carried over some of the funds into the 2015-17 budget cycle to cover public health initiatives outside of the medical marijuana program.
In setting new fees for growers, Andre Ourso, manager of the health authority’s medical marijuana section, said the agency took into consideration the potential shift of patients and dispensaries away from medical cannabis into the state’s regulated recreational program.
He said the agency conservatively estimates that 40 percent of dispensaries will transition to the recreational market. The state collects a $4,000 fee from dispensaries each year; Oregon is home to 334 registered dispensaries, according to the state.
“We may lose a significant amount of revenue from dispensaries,” said Ourso.
At the same time the agency prepares for a possible decline in medical marijuana participation, it will be responsible for at least some regulation of production for the first time since Oregonians voted for medical marijuana in 1998.
Growers producing for the dispensary market are subject to new production limits, record-keeping requirements and the potential for inspections by state regulators.
Ourso said the medical marijuana program may add more employees, depending on how many growers and dispensaries end up in the medical program and fall under the new rules.
Cedar Grey, a longtime medical marijuana grower in Williams, said worries the health authority plans to spike fees to discourage participation in the medical program. He said patients will bear the cost of any fee increase and many can’t afford to pay more.
“It looks like they are treating the program as a cash cow and trying to extract as much money from patients as they can,” Grey said.
Grey, who processes cannabis oil under the brand Siskiyou Sungrown, plans to work in the medical and recreational markets and expects to pay about $14,000 in annual licensing fees to the health authority and the Oregon Liquor Control Commission, which regulates recreational cannabis.
He said he understands the liquor control fee since the recreational program is geared toward profit-making enterprises, but he said fees to participate in the medical market are too high.
“The medical side is designed to help patients,” he said.