New York’s medical marijuana program is on the verge of total collapse because, according to a recent report from USA Today’s LoHud, the system has been designed to fail.
It will soon be two years since the state implemented its medical marijuana law, giving certain patients the ability to access cannabis products with the permission of a licensed physician.
But the program, which struggled for the first year to service even 1,000 patients, continues to face challenges, including a lack of interest from the medical community, as well as legal restrictions that have prevented enough participation to keep the program alive.
When the Compassionate Use Act was put into place, the state licensed five companies to oversee the production and distribution of medical marijuana. Yet, the state only gave these operations permission to sell specific, pharmaceutical-like products, which are expensive to manufacture and therefore costly for the consumer.
According to state tax data, the entire medical marijuana industry has generated only around $16 million over the past year—that’s before taxes and other operating expenses.
Even while the state attempts to slowly fix the market, moving last year to open the program up to more patients by approving chronic pain as a qualified condition, there are still not enough people buying medical marijuana.
Some of the latest statistics show that only around a third of the state’s 31,116 patients are active participants—around 10,000 people.
The cannabis industry says they have been unable to turn a profit since opening for business in 2016.
“I believe this to be a true statement, which is no registered organization has made even a penny in profits since day one,” Ari Hoffnung, CEO of Vireo Health of New York, told the news source.
One of the biggest problems is New York does not allow patients to smoke medical marijuana, which is much cheaper for both the producer and consumer.
In the beginning, all cardholders were required to use only pills and vaporizers. A report from the New York Times suggested that this restriction on pot products meant that some patients were being forced to cough up over $1,000 a month for their medicine.
The law was recently revised to give way to the sale of lotions, ointments, patches, chewable tablets and lozenges. Nevertheless, these products are still relatively expensive—a situation that is keeping many patients from buying weed from legitimate sources.
As it stands, the state is not even coming close to selling enough medical marijuana to hit the $4 million in tax revenue originally projected by Governor Cuomo’s office. In order for that to happen, the medical marijuana market would need to sell in upwards of $60 million in products.
The New York Health Department believes it can close the gap by licensing more marijuana producers, but the New York Medical Cannabis Industry Association, which is representing the initial five medical marijuana companies in a lawsuit against the state, claims this expansion will only serve to drive them further into ruins.
“The (companies) are still operating at a loss, are utilizing a fraction of their manufacturing capacities, and they have not yet come close to recouping the substantial investments they made into becoming pioneers in the program,” reads the complaint.
Furthermore, these operations argue that the state needs to find a solution to driving up the demand, not the supply. This means making the program less restrictive for all parties involved.
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