Medical Cannabis in Utah Will Not Impede Federal Funds

For institutions in states where recreational or medical cannabis is legal, but which remained reluctant or just plain uninterested in participating, there was always a convenient excuse: money, as in money from the federal government. If this hospital, or this college or this other entity allowed its patients or students to consume or possess cannabis, it would be at risk of losing funding from the federal government, this line of reasoning went.

It was a common excuse, despite no sign of it having much validity. If it were valid, perhaps states that charged sales taxes on cannabis would be punished, or states that legalized recreational sales would be punished. But it never happened. And now, the federal government — the Trump-era federal government — has directly informed the deep-red, Trump-loving state of Utah, that it, too, can participate in legal medical cannabis without risking federal grants.

In other words, the federal money excuse is logically and rationally dead once and for all.

Last fall, Utah voters defied powerful state interests including the Church of Latter-Day Saints to approve Proposition 2, which changed state law to legalize medical cannabis and set up a state-run distribution system, the only one of its kind in the United States.

A quirk in state law allowed Gov. Gary Herbert and the state legislature to unilaterally alter what voters approved into something even more restrictive, with room for only seven dispensaries run by private enterprise in addition to a state-run central distribution system. Nonetheless, the promise was that the voters’ will would be (somewhat) upheld and that sick people in Utah would be able to access cannabis.

Then came the wave of predictable excuses. As the Salt Lake Tribune reported, local health departments, reliant on the federal government for providing basic services like county hospitals, raised the alarm that all that would be at risk if they also set up dispensaries. (Helping to make the issue even more complicated, arguably needlessly, were county prosecutors who worried publicly that the federal government would make a unique example of Utah and punish the state for doing what 32 other states and D.C. had already done.)

And they won’t, the feds told them.

“Utah’s medical marijuana law will not affect the state’s eligibility to apply for HHS grants nor will it affect the outcome of the state’s application,” read a letter sent to Herbert from Jennifer Moughalian, the assistant secretary for financial resources at the federal Department of Health and Human Services, dated July 19.

“[O]nly under extremely rare circumstances” could federal monies be used to support the Utah cannabis program, the letter added, and federal cash couldn’t be used to subsidize cannabis access for poor patients (a conundrum disabled or elderly patients on Medicare or Medicaid have been aware of for a long time).

This would seem to make this clear and easy and remove any other roadblocks, real or perceived, holding back the state from awarding licenses to eight cultivators and setting up licenses. (The same state law originally allowed the state to license 10 cultivators, but Utah officials said they cut it down to eight in order to avoid an “oversupply.”)

There’s nothing particularly great about Utah’s approach, either for cannabis consumers or producers. License-winners will enjoy limited or no competition, but may also struggle for customers. Patients won’t have much of an option beyond driving to the county health office for their medicine, which in a state as large as Utah could be an errand that takes hours. No option beyond the illicit market, of course.

But even this might not be enough for reluctant or obstructionist lawmakers, for whom no excuse be necessary. As the Tribune reported, Evan Vickers, the state Senate majority leader, said that he may call a special session in order to alter the law even further — perhaps to remove the central distribution system.

At the least, the chimerical notion that legal weed will wreck a state’s finances by cutting off the federal supply of cash can be laid to rest, but as Utah is demonstrating, all kinds of phantasms can be conjured up when legal cannabis is involved.

TELL US, do you use marijuana for medical purposes?