Chart: Can medical marijuana programs survive in states with recreational markets?

Medical marijuana programs in states that went on to legalize adult-use cannabis are suffering, raising questions about the future of MMJ in those markets.

The makeup of MMJ patients in those states also is changing.

Data from medical cannabis programs in Colorado, Oregon and Nevada – the only states with both an active recreational marijuana industry and a pre-existing MMJ patient database – shows patient counts steadily declining in the months and years after the launch of each state’s adult-use market.

Oregon’s MMJ program has been dealt the biggest blow, with patient counts falling 42% since early rec sales began in October 2015.

Nevada hasn’t fared much better, with patient counts down 32% since the October 2017 adult-use launch – an average decline of 5% per month. Last month, patient roles dipped below the 17,000 mark for the first time since March 2016.

Colorado, by contrast, has fared better than Oregon and Nevada, with patient counts down 22% since the state’s rec market launched in January 2014. The smaller decline was likely driven by a combination of low-cost MMJ cards and significantly reduced tax requirements on medical purchases.

Annual sales for medical cannabis in Colorado actually increased each year from 2014 to 2016, falling for the first time in 2017. So far in 2018, however, both patient counts and MMJ sales are on pace to see multiyear lows.

In general, patients treating chronic and severe conditions may require high-potency products available only to MMJ patients.

In other words, it still makes sense for certain patients in states with both medical and adult-use markets to jump through the regulatory hurdles and pay the associated fees to renew their medical cards.

Still, many patients are opting for the more accessible retail market instead, as prices continue to fall and product selections expand.

While patient counts are shrinking in states with adult-use markets, the demographic composition of the patient base is also changing, which may provide opportunities for businesses that can adapt their offerings to serve a small, highly engaged customer base with unique needs.

In Oregon, 19.4% of MMJ patients are 65 or older, up 6 percentage points from October 2015.

In Nevada, 22% of MMJ patients are older than 65 – up from 19% in October 2017 – while the average age of an MMJ patient in Colorado has increased from 41 in January 2014 to 44 as of June 2018.

Females constitute a higher portion of the patient base in both Colorado and Oregon (Nevada does not provide this information) after the launch of rec sales, now accounting for 38% of all MMJ patients in Colorado and 43% in Oregon. That represents a 5-percentage-point increase in Colorado compared to the launch of rec sales, and a 3-percentage-point uptick in Oregon.

Eli McVey can be reached at [email protected]

11 comments on “Chart: Can medical marijuana programs survive in states with recreational markets?
  1. jack lehman on

    i want to see the Federal restrictions on cannabis removed so it can be used for its medicinal effect. people who require a federal security clearance cannot use cannabis no matter how advantageous it would be to their health because they are required to submit to drug testing.

  2. Frank Labrozzi on

    The answer is yes it will and it has. The specimen states are as follows:

    >Colorado, a state that over supply of product, prices of product has dropped significantly
    >Oregon a state that the most dispensaries per capita show a soft pricing market
    >Nevada, the most responsible state has a slight decrease

    So with prices low from over supply why would anyone want to go through the trouble of going through the regulatory process to get a mmm card. The industry is headed towards a resifting as more and more cultivators will find out growing inexpensive weed is not in their best interest and will shift to high paying yields or suffer insolvency. Then pricing will settle and the rec user will start seeing the weight of their monthly supply weigh heavy on their pocket book. Then they see the advantage of having medical cannabis that hits their sweet spot.

    BTW: Rec user will eventually see that their rec cannabis is similar to Bud Lite, but the advantages of medical is that the strains are more potent and the abatement of taxes at the POS, as much s 28%. As more and more people come into the cannabis market, they will figure it out that the best and most affordable cannabis is medical cannabis.

    • Maxcatski on

      Medical users will only maintain their registration if there is a benefit. Lower taxes, insurance coverage (yes, this is starting in Canada) or discounted pricing are examples. We need to eliminate the excise tax on medical cannabis in Canada!

    • Maxcatski on

      I was not aware there was any difference between medical and consumer cannabis in the US. Is there really a restriction on potency?

    • G Smith on

      Because there are only a few counties in Colorado that have competitive recreational markets. For instance in El Paso County, where the locals don’t want recreational there are only 2 places to shop for rec and their prices are what I would call street prices in a dry state, $400 an ounce, $35 a gram for shatter etc…..I pay $60 an oz for my 2 ounces of medical, or I can risk my life, fight the traffic, spend $30 on gas and drive to Denver to pay around $100 for 1 ounce of rec that is almost as good.

  3. Matt Sanner on

    I pray that “recreational” is never legalized in Arkansas!!! And, I wished that it wasn’t fully legalized-anywhere!!! Only, for use to benefit,enable, and enhance the lives of those in need!!!

    • Maxcatski on

      Oh, give me a break. Recreational or medicinal, it’s the same pot and people use it for the same reason, to feel better.

    • Todd on

      Also Arkansas resident. It will be legal within the next few election cycles. We are in a time when restrictions on adult actions are falling. Focus on education and the market will stay small, maybe 1/3rd the size of alcohol.

  4. Maxcatski on

    Medical users will only maintain their registration if there is a benefit. Lower taxes, insurance coverage (yes, this is starting in Canada) or discounted pricing are examples. We need to eliminate the excise tax on medical cannabis in Canada!

    • Doc on

      Same in California. We’re asked to spend for an exam / recommendation ($50-ish annually), then spend more to register and get a card ($85 annually). Which is optional and the “big” incentive is 5% off. (Once you spend over $2700 per year the 5% break will cover the costs of getting it. Unless you’re medicating throughout the day that’s a lot!) Medical users still pay the 15% excise tax, state tax and local, if any.

      With a well-developed legacy market of unlicensed operators, where you can get probably 80% or more of what’s in licensed stores (and high potency edibles, which can’t even be sold in licensed shops), why would anyone choose to pay 30%-ish more out the door for the same thing? Either medical or recreational!

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