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Utah officials are gearing up to sell medical marijuana — and they need $4 million to do it

By Katie McKellar, KSL | Posted - Feb. 5, 2019 at 4:38 p.m.

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SALT LAKE CITY — Now that Utah has legalized medical marijuana, the Utah Department of Health is taking the next steps to prepare itself to start distributing.

And that means the health department needs money — to the tune of $4 million.

Dr. Joseph Miner, executive director of the Utah Department of Health, made the official request to the Utah Legislature's Social Services Appropriations Subcommittee on Tuesday, explaining to lawmakers how the department intends to roll out the state's first medical cannabis distribution network by the time the law requires it to be up and running: March 1, 2020.

Joining Miner was Richard Oborn, director for the Center of Medical Cannabis, who gave lawmakers an overview of the funding request and answered questions about the plan.

Utah voters approved a medical cannabis program via ballot Proposition 2 during last year's election, effective Dec. 1. But the Utah Legislature replaced it with HB3001 in a special session, days after the new law took effect, to implement a "compromise" law.

The new law included significant changes on how medical marijuana could be legally recommended, sold and consumed. It removed a hotly contested provision allowing patients living a certain distance from a dispensary to grow up to six marijuana plants.

The new law also reduced the number of private medical marijuana outlets allowed. While Proposition 2 allowed up to 40 dispensaries, the new law only allows seven cannabis "pharmacies." The distribution is controlled by the state, with cannabis deliveries sent to local health departments for patient pickup.

By consulting with "trained medical professionals, qualified patients will receive a recommendation for quality-controlled cannabis products from a licensed pharmacist in a medicinal dosage form," Oborn said.

He noted the medical marijuana cannot be smoked and will only come in easily measurable forms such as capsules, tablets, gelatin cubes, oil, skin patches, or, in limited circumstances, a resin or wax.

"This will be done in a way that prevents diversion of product into a black market," Oborn said.

That $4 million request includes an estimated need of more than $3.5 million for an "electronic verification system," what Oborn called the "backbone" for the state's medical cannabis program and the infrastructure needed to track patient information and to verify their eligibility.

The request also includes $263,000 in personnel costs, $100,000 for "public health education," $30,000 to build the website, and $20,000 for support for the new electronic verification system.

The verification system must be established before March 2020, Oborn said. It will allow patients, in a qualified medical provider's office, to apply for a medical cannabis patient card. It will also allow qualified medical providers to access dispensing and card status information, electronically recommend treatment with dosing parameters, and to electronically renew a recommendation.

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The system will also connect with an "inventory tracking system," Oborn said, used by medical cannabis pharmacies and the state central fill pharmacy in real time to archive purchases of any cannabis product.

The central pharmacy must be operational by July 1, 2020, according to Oborn's presentation, with multiple locations if necessary. It will be a "closed-door" pharmacy that ships patient orders to one of the local health departments where patients can pick up orders.

The verification system will also provide access to the central cannabis pharmacy, fill agents and local health department agents, as well as provides access to state and local law enforcement under certain conditions, according to Oborn's presentation.

Oborn told lawmakers that based on the health department's projections, it will take some time for the state's medical cannabis program to become self-sustaining.

Not enough revenue will come in to cover costs in 2019, obviously, Oborn said. Revenues are projected to reach $5.4 million in 2020, and grow to about $16.2 million in 2021, he said.

"If our projections ring true, we'll be able to make up our expenses," Oborn said, noting the projections are based on experiences in other states.

"So you'd like a loan of $4 million this year," Sen. Allen Christensen, R-North Ogden, said.

In the meantime, the Utah Department of Health plans to take more steps between now and June to implement the new law.

That includes hiring four full-time staff, drafting administrative rules, posting requests for proposals for the contract to build the electronic verification system and for companies to be one of the seven medical cannabis pharmacies, planning operations for the state central fill pharmacy and the local health department distribution network, and building the website.

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