The capitol building of Minnesota in St. Paul.

Jim Bowen

Minnesota MMJ Program Needs Extra State Cash

Minnesota’s Office of Medical Cannabis has requested more than $500,000 in additional funding over the next two years to cover the costs of its patient database and licensed manufacturer inspections, according to an Associated Press report. The state already covers $1.4 million of the program’s operating costs and hiked the annual registration fee for operators from $94,000 to $146,000 last year trying to rein in costs.

In his budget proposal, Gov. Mark Dayton says the funding is necessary to prevent “[increasing] the cost of medical cannabis to program participants.”

Officials say that the funds will be used to cover higher-than-expected costs for maintenance of the patient registry, and more than 120 state inspections on manufacturers each year. In 2015, the first year of medical cannabis sales, the manufacturers combined to lose more than $5 million.

State Rep. Pat Garofalo, a Republican who plays a key role overseeing the program, plans to introduce legislation that would allow the manufacturers to write off business expenses on their Minnesota tax returns – currently not allowed due to cannabis’ federal drug schedule status.

Andrew Bachman, chief executive of LeafLine Labs, said he wasn’t sure if tax relief would help the company to immediately break-even but expected he would again lose money this year. Kyle Kingsley, CEO of Vireo Health which owns and operates Minnesota Medical Solutions, suggested changes at the federal level would provide a financial boost.

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