Revenue spokesman Mark Couch says the MMED is cash-funded, which means that when fees don't come in, the division has to whittle staff. The MMED was budgeted for $5.7 million this fiscal year. So far this fiscal year, it has collected $418,750 in licensing fees.
State marijuana licensing fees range from $2,750 to $14,000, depending on the type and size of business. Individual workers in the business also must pay $250 for a state background check and other vetting to make sure they're eligible to work with medical marijuana.
Couch attributed the declining license applications to a state moratorium on medical marijuana licenses, along with slower-than-expected local licensing. Marijuana shops are supposed to have paid local licensing fees before they pay state licensing fees.
"There was an expectation that licensing fees would come in faster" than they have, Revenue spokesman Mark Couch said. The moratorium on new marijuana businesses ends this summer.
Couch said cash-funded regulators are routinely affected by licensing fees. For example, Couch said, another division within the department that regulates auto sales was similarly cut a few years back when car sales plummeted.
But the MMED cutbacks are frustrating to people in the pot business.
"Ultimately how can any medical marijuana business be in clear and ambiguous compliance with state law when the state licensing authority goes belly up?" said Rico Calibri, of the Association of Cannabis Trades, in an email.