Summer Vacation, Utah Medical Marijuana Update, and Politics 2020
CannaBlog By Jim Marty, CEO and Founder of
Bridge West, CPAs and Advisors to the Cannabis Industry
My family recently ‘hit the road’ and enjoyed a summer vacation, despite COVID-19. What better place to social distance than sparsely populated Utah? We drove to Moab, Utah, for a five-day, four-night, guided river trip down the Green River through Desolation Canyon. Over the last 30+ years, this is the third time I descended ‘Deso,’ as our guides call it. Since 1985, a river rafting company in Moab has been a client, and I have done a significant amount of business there over these many years.
The Desolation Canyon river trip is an authentic wilderness experience. You don’t see a car, road, telephone pole, or any sign of civilization for a hundred miles. We set-up tents each night and slept on sandy beaches with brilliant stars overhead. My family spent some real quality time together.
Speaking of Utah, the State’s medical marijuana program started earlier this year, on March 1, 2020, to be exact. To follow is a brief update:
- There are currently eight approved cultivators that can have a combined canopy of 100,000 square feet. Once the statewide total of 100,000 square feet is reached, the Utah Department of Health can consider issuing more cultivation licenses. Each license carries a $100,000 annual fee.
- The Utah Department of Agriculture has issued eight processor licenses. A Tier 1 processor license also has a $100,000 annual fee.
These fees could be slowing down the entry of new applicants for processing and cultivation.
- Providers of medical marijuana to patients are referred to pharmacies. Three are open to date, with one each in Salt Lake City, Ogden, and Provo. Eleven more are proposed and are in the process of getting their locations approved and licensed.
- Patients were able to apply for a Medical Marijuana card beginning on March 1, 2020. The Utah Department of Health has not disclosed how many cards have been issued since then. With a population of only 3.2 million spread out over a vast geographic area, it will be interesting to see how this program proceeds.
Considering the high barriers to entry noted above, I think it will be difficult for cultivators, processors, and pharmacies to be profitable in the near term.
An Update on Colorado’s 2020 Senate Election
At this point in the year, the fall elections are starting to come into focus, and one of the hardest fought races is for the Colorado U.S. Senate seat of Cory Gardner. His opponent is former Denver Mayor and Colorado Governor, John Hickenlooper. I recently had a brief interview with candidate Hickenlooper and had an opportunity to ask him a question.
He spoke to the political action group that Bridge West is a member of, Colorado Leads. ‘Hick,’ his nickname, started the video call by apologizing to our group for vetoing several cannabis-related bills while he was the Governor of Colorado from 2011 through 2019. He said, at that time, he was concerned about underage use and marijuana-impaired driving.
All that is in the past, he said, and he is now on-board in support of the Colorado cannabis industry. During the question and answer period, I asked him how he was going to handle his recent convictions of ethics violations for accepting travel-related gifts while he was the Governor. He became very defensive and launched for a ten-minute dissertation, basically saying that he did it to bring jobs to Colorado. “No good deed goes unpunished,” he said.
On the other hand, Senator Cory Gardner has been a strong supporter of Colorado’s cannabis industry throughout his six years in the U.S. Senate. He introduced the States Act that would allow the States to regulate cannabis as they think is best locally. He is also a co-sponsor of the Safe Banking Act to allow cannabis companies access to banking services and merchant processing.
Will any of this matter to voters?
When I speak to friends and associates, both Democrats and Republicans, it seems that in this election year, Party trumps policy. Voters appear determined to put or keep their Party in power even if their candidates’ policies conflict with what those voters believe. Case in point is the Hickenlooper v. Gardner race. Anti-cannabis Republicans (are there any left?) will vote for Gardner and pro-cannabis Democrats will vote for Hickenlooper despite his long-history of fighting legal cannabis in Colorado.
As the old saying goes, politics make strange bedfellows. Enjoy the rest of the summer!
Stay tuned for more CannaBlogs and Updates from Bridge West
In this ever-changing world of cannabis, the Bridge West team understands the tax and accounting issues facing the industry. We are proud to provide the best possible solutions to our valued clients.
If you have any questions and would like to learn more about any topics in this CannaBlog, please contact Jim Marty, CPA, CVA, at email@example.com or 303-651-0304 or a member of the Bridge West Leadership Team. We also welcome you to schedule a complimentary consultation.