Jacob Redmond
Well-Known Member
The medical cannabis industry generates an estimated $1.7 billion in sales a year, according to a report by ArcView Market Research. Based on the way Minnesota's new law is written, the state won't be seeing large amounts of revenue that other states collect from medical marijuana.
Minnesota is not collecting sales, tobacco, wholesale drug distributor and legend drug use taxes on the sale of medical cannabis.
5 EYEWITNESS NEWS discovered that in the month of April, Colorado pocketed $1.7 million in taxes, licenses and fees from medical cannabis, according to state records. In the same month, the state of Washington received $1.2 million in taxes from the sale of medical marijuana.
Minnesota medical cannabis patients pay a $200 annual fee to the state, while those on Social Security Disability and other public assistance programs are eligible for a reduced fee of $50. The state expects 5,000 patients to sign-up for the program, with a $200 annual fee per patient, which could equal up to $1,000,000 fees going to the state per year.
"I think what we've seen in Minnesota is different than what we've seen in other states," Taylor West, deputy director of the National Cannabis Industry Association, said.
West doesn't believe states should use medical marijuana as a revenue generator but rather as a way to help sick patients obtain treatment.
"What Minnesota is doing is an extremely small step in the right direction," West said. "It's a positive step to start providing serious relief for some critically ill patients."
The Minnesota Department of Health said its goal with medical cannabis is to meet the legislative requirements so that seriously ill Minnesotans can use medical cannabis to treat certain conditions.
State Sen. Scott Dibble, DFL-Minneapolis, told 5 EYEWITNESS NEWS that taxing medical cannabis like other states wasn't on their radar when he and other legislators drafted the bill.
"It's not entirely self-supporting," Dibble said. "The rest of the program is supported from the general fund; everyone else's taxes are going to support the program."
The state of Minnesota authorized $2.8 million to get the medical cannabis program up and running.
5 EYEWITNESS NEWS filed a public records request with the Minnesota Department of Health back in June for all the state contracts involving companies and parties involved in medical cannabis, but as July 9 that request had not been completed.
The Minnesota Department of Health selected two companies, LeafLine Labs and Minnesota Medical Solutions (MinnMed) to produce medical cannabis. In all, 12 companies each paid the state $20,000 to be considered to become an authorized manufacturer.
Medical cannabis prescriptions run patients between $250 and $600 per month, with the dispensary keeping the cash-only payment.
Banks Cautious to Lend
The green industry is often driven by cash because banks are being cautious to lend to marijuana related companies since the product is still illegal under federal law.
"The opportunity to change, really change, the world is a pretty rare thing," MinnMed CEO Dr. Kyle Kingsley said.
He dropped his medical practice to enter into the new green industry in Minnesota. His company has also since applied to enter the state medical marijuana business in New York.
MinnMed raised $16.6 million in capital before it opened its first Minnesota medical marijuana dispensary.
"You know there's a reason that banks aren't keen on working with the industry," Kingsley said.
5 EYEWITNESS NEWS reporter Eric Chaloux sat down for an interview with Kingsley; he asked if MinnMed had trouble finding funding from banks.
"Not a problem for us, we've been involved with several banks nationally and here in Minnesota," Kingsley said.
The Minnesota Bankers Association said about a handful of banks inquired about offering accounts to marijuana related industry now that it's legal under state law.
"I've been telling them there's very, very significant risks in banking marijuana related business and they have to be fully aware of that before they make that risk-management decision to do that," said Tess Rice, General Counsel for the Minnesota Bankers Association.
Starting Slowly
The latest data provided by the Minnesota Department of Health showed at the start of this week that 98 patients have been approved in the registry to pick up medical cannabis. Again, the state expects 5,000 patients to sign up for the program.
"We want a gradual ramp-up over six to eight months — that's perfect," Kinglsey said. "So this is the perfect scenario."
"The jury is still out. I'm quite surprised that less than 100 qualified," said state Rep. Jeff Howe , R-Rockville.
"As we progress down this road, whether these companies stay in business without expanding the program is a good question."
Howe voted "no" along with 39 other House colleagues on SF 2470, the medical cannabis bill.
"It was a tough vote for me," Howe said. "The concern I had was we didn't hear from anyone in the medical community. It was based on emotion."
When lawmakers return to St. Paul for the next short session, Dibble expects the law to come up to make possible changes as to the type of patients that could be eligible for medical cannabis.
"I give it mixed results," Dibble said. "I'm very sympathetic to folks who can't get on the program, I'm stressed about that."
News Moderator: Jacob Redmond 420 MAGAZINE ®
Full Article: Medical Marijuana Sales Won't be a Cash Cow for Minnesota | KSTP TV - Minneapolis and St. Paul
Author: Eric Chaloux
Contact: mailto:tips@kstp.com
Photo Credit: Leafline Labs
Website: KSTP TV - Minneapolis and St. Paul - News, Weather and Sports
Minnesota is not collecting sales, tobacco, wholesale drug distributor and legend drug use taxes on the sale of medical cannabis.
5 EYEWITNESS NEWS discovered that in the month of April, Colorado pocketed $1.7 million in taxes, licenses and fees from medical cannabis, according to state records. In the same month, the state of Washington received $1.2 million in taxes from the sale of medical marijuana.
Minnesota medical cannabis patients pay a $200 annual fee to the state, while those on Social Security Disability and other public assistance programs are eligible for a reduced fee of $50. The state expects 5,000 patients to sign-up for the program, with a $200 annual fee per patient, which could equal up to $1,000,000 fees going to the state per year.
"I think what we've seen in Minnesota is different than what we've seen in other states," Taylor West, deputy director of the National Cannabis Industry Association, said.
West doesn't believe states should use medical marijuana as a revenue generator but rather as a way to help sick patients obtain treatment.
"What Minnesota is doing is an extremely small step in the right direction," West said. "It's a positive step to start providing serious relief for some critically ill patients."
The Minnesota Department of Health said its goal with medical cannabis is to meet the legislative requirements so that seriously ill Minnesotans can use medical cannabis to treat certain conditions.
State Sen. Scott Dibble, DFL-Minneapolis, told 5 EYEWITNESS NEWS that taxing medical cannabis like other states wasn't on their radar when he and other legislators drafted the bill.
"It's not entirely self-supporting," Dibble said. "The rest of the program is supported from the general fund; everyone else's taxes are going to support the program."
The state of Minnesota authorized $2.8 million to get the medical cannabis program up and running.
5 EYEWITNESS NEWS filed a public records request with the Minnesota Department of Health back in June for all the state contracts involving companies and parties involved in medical cannabis, but as July 9 that request had not been completed.
The Minnesota Department of Health selected two companies, LeafLine Labs and Minnesota Medical Solutions (MinnMed) to produce medical cannabis. In all, 12 companies each paid the state $20,000 to be considered to become an authorized manufacturer.
Medical cannabis prescriptions run patients between $250 and $600 per month, with the dispensary keeping the cash-only payment.
Banks Cautious to Lend
The green industry is often driven by cash because banks are being cautious to lend to marijuana related companies since the product is still illegal under federal law.
"The opportunity to change, really change, the world is a pretty rare thing," MinnMed CEO Dr. Kyle Kingsley said.
He dropped his medical practice to enter into the new green industry in Minnesota. His company has also since applied to enter the state medical marijuana business in New York.
MinnMed raised $16.6 million in capital before it opened its first Minnesota medical marijuana dispensary.
"You know there's a reason that banks aren't keen on working with the industry," Kingsley said.
5 EYEWITNESS NEWS reporter Eric Chaloux sat down for an interview with Kingsley; he asked if MinnMed had trouble finding funding from banks.
"Not a problem for us, we've been involved with several banks nationally and here in Minnesota," Kingsley said.
The Minnesota Bankers Association said about a handful of banks inquired about offering accounts to marijuana related industry now that it's legal under state law.
"I've been telling them there's very, very significant risks in banking marijuana related business and they have to be fully aware of that before they make that risk-management decision to do that," said Tess Rice, General Counsel for the Minnesota Bankers Association.
Starting Slowly
The latest data provided by the Minnesota Department of Health showed at the start of this week that 98 patients have been approved in the registry to pick up medical cannabis. Again, the state expects 5,000 patients to sign up for the program.
"We want a gradual ramp-up over six to eight months — that's perfect," Kinglsey said. "So this is the perfect scenario."
"The jury is still out. I'm quite surprised that less than 100 qualified," said state Rep. Jeff Howe , R-Rockville.
"As we progress down this road, whether these companies stay in business without expanding the program is a good question."
Howe voted "no" along with 39 other House colleagues on SF 2470, the medical cannabis bill.
"It was a tough vote for me," Howe said. "The concern I had was we didn't hear from anyone in the medical community. It was based on emotion."
When lawmakers return to St. Paul for the next short session, Dibble expects the law to come up to make possible changes as to the type of patients that could be eligible for medical cannabis.
"I give it mixed results," Dibble said. "I'm very sympathetic to folks who can't get on the program, I'm stressed about that."
News Moderator: Jacob Redmond 420 MAGAZINE ®
Full Article: Medical Marijuana Sales Won't be a Cash Cow for Minnesota | KSTP TV - Minneapolis and St. Paul
Author: Eric Chaloux
Contact: mailto:tips@kstp.com
Photo Credit: Leafline Labs
Website: KSTP TV - Minneapolis and St. Paul - News, Weather and Sports
