The Texas Department of Public Safety is weighing regulations that would impose a $1.3 million fee on new dispensaries under the state's CBD law. Pictured: Texas' state seal. (Deborah Cannon, Statesman.com file)

Texas cannabis oil businesses face staggering fee increase for licensing

Texas Department of Public Safety proposes a $1.3 million licensing fee — up from $6,000 — for businesses that seek to dispense low-THC cannabis oils

Businesses seeking to operate under Texas’ new limited medical marijuana program may end up having to pay a pretty penny — actually 130 million of them.

Texas may impose a $1.3 million licensing fee for businesses under the Texas Compassionate Use Program if proposed rules go into effect, according to a recent Texas Public Radio report. The previous fee was set at $6,000.

The state program would give intractable epilepsy patients access to low-THC cannabis oil that is high in the nonpsychoactive compound cannabidiol (CBD).

The proposed licensing fee increase followed recommendations that lowered the estimated number of licenses to three from 12 and called for the seven-day-a-week presence of Texas Department of Public Safety troopers at the three dispensaries, according to a statement posted on the Texas Department of Public Safety website:

The recently proposed increase in the licensing fees, reflected in the proposed administrative rules, is the result of several factors. Most notably, the fees reflect the recommendations of executive leadership that (1) the estimated number of licenses be reduced from twelve to three; and (2) based on security and safety concerns the presence of DPS troopers is required on the premises of the three dispensing organizations seven days a week. The latter recommendation is estimated to cost approximately $1.2 million over the biennium. Additionally, a portion of the increase is based on the department’s more general recalculation of the costs associated with administering the program and new information gained from the vendor approval process regarding the costs of the registry software development and maintenance. The total estimated cost for administration of the program is approximately $4.4 million over the biennium.

Senate Bill 339 requires that the department adopt rules imposing fees “in amounts sufficient to cover the cost of administering” the low-THC cannabis program.

The estimated fee is $1.3 million per business and $4,820 per registrant for initial licensure and $975,000 and $2,875, respectively, for renewals, according to the proposed amendment.

Advocates for the low-THC cannabis program say that such as jump could be a significant barrier to both businesses and patients seeking CBD oil, Texas Public Radio reported:

The Marijuana Policy Project’s state executive director Heather Fazio says the fee increase makes it nearly impossible for businesses to operate and likely patients to access the low-THC cannabis oil that doesn’t result in a person getting high.

“They’ve amended some of the rules, which have been rather alarming for those who are both interested in accessing this medicine and for those who are interested in opening up a cannabis business to provide the medicine for these patients,” Fazio says.

She says imposing those types of fees will likely raise the cost of the legal cannabis oil. Fazio and other marijuana advocates are also concerned with another DPS policy change concerning the state’s medical marijuana program. “Some of the other provisions requires self-incrimination with regards to where cannabis seeds are coming from,” Fazio explains.

A public comment period for the proposed amendments is running until Nov. 28, 2016.

The state is expected to start accepting applications for dispensing organization licenses by June 2017, according to the Texas Department of Public Safety’s Compassionate Use Program timeline.