New Market: Humble beginnings expected for North Dakota’s medical marijuana industry

This is the first article in a series looking at the potential cannabis market in each of the eight states that approved recreational or medical marijuana initiatives in the 2016 election. Check back each week through mid-January for new entries. Click here for previous installments

By Bart Schaneman

North Dakota’s new medical marijuana market – made possible by the Nov. 8 election – is expected to be one of the smallest in the nation, with annual dispensary sales eventually reaching $10 million-$20 million, according to Marijuana Business Daily estimates.

Chalk up the sales total to North Dakota’s small population: just over 750,000 people, ranking it No. 47 in the U.S.

The state’s projected MMJ sales also reflect the program’s medical conditions list. North Dakota’s list isn’t as business-friendly as, say, Colorado’s, but it does include some forms of pain as well as post-traumatic stress disorder.

North Dakota’s MMJ patient count is likely start out in the low thousands for the first year or two, possibly rising to 10,000 or more down the road.

Projected dispensary sales, meanwhile, put North Dakota about on par with 2016 sales estimates for Connecticut and New Jersey. The state is expected to have a notable population of home growers, given its large geographic size and the possibility it will only have a handful of dispensaries.

North Dakota’s small market size shouldn’t detract from the fact that 64% of voters in the upper Midwestern state approved the medical cannabis initiative, Measure 5. A grassroots movement that received little to no outside help is credited with the victory.

The initiative will take effect Dec. 8, though it will be a while before the first licensed businesses open.

While the regulations governing the industry haven’t been released, the market is expected to mirror others in the region with similar demographics.

Becky Dansky, legislative counsel for the Marijuana Policy Project, expects to see dispensaries in Bismarck and Fargo – with possibly another one elsewhere in the state – within a year or two. Minnesota, a comparable state in terms of regional demographics, saw its first dispensary up and running in about a year. That’s a rarity, however, as it usually takes months or years longer.

“It’s not going to be a particularly large market, just because of the nature of the state,” Dansky said. “You have a state that’s twice the size of Pennsylvania with half the population of Philadelphia.”

Dispensaries will be vertically integrated, not-for-profit models. They will be limited to 1,000 growing plants and 3,500 ounces (218.75 pounds) of “usable” marijuana at any given point.

Dispensaries will have security and location requirements and will be inspected by the North Dakota Department of Health.

The nonrefundable application fee for a dispensary license is $5,000. Winners will pay an additional $25,000 fee. Licenses will be awarded based on several criteria to determine merit.

“That’s enough to weed out anyone who’s not serious about actually providing medicine to patients,” Danksy said.

North Dakota’s large landmass and sparse population informs the framework of the requirements, and most patients are likely to end up growing their own medicine.

Patients who live 40 miles or more from a dispensary will be allowed to grow up to eight plants in an enclosed, locked facility at least 1,000 feet from a school. Home growers must notify law enforcement authorities that they are cultivating plants, and the Department of Health can evaluate the operations.

The term “caregiver” has meant different things over the years in the marijuana industry. In North Dakota, patients who don’t grow their own will be allowed to employ a caregiver who can pick up medical cannabis from dispensaries and deliver and administer it to that person.

However, growing at home might be a challenge for those who don’t have a green thumb.

“It’s good to have a combination of dispensaries and home grow,” Dansky said.

In addition to certain forms of PTSD and pain, the state’s MMJ conditions list includes:

  • Cancer
  • HIV/AIDS
  • Hepatitis C
  • Dementia
  • Crohn’s disease

Anita Morgan, along with her husband Ray, was a leading proponent and organizer on behalf of Measure 5, and said the petition drive turned out far better than expected. Organizers needed 13,000 signatures and ended up with more than 17,000. The campaign was an all-volunteer force.

Morgan said the campaign received support from many unexpected sources, including a 72-year-old school teacher who wrote a letter to one of the state’s largest newspapers.

She expects North Dakota will set up its MMJ program using information and models from other states that already have approved medical cannabis.

“The state understands that they’re not going to have to reinvent the wheel,” she said.

Morgan would like to see the agriculture industry get involved and help develop growing practices.

“North Dakota farmers can grow anything,” she said.

Bart Schaneman can be reached at [email protected]

Leave a Reply

Your email address will not be published. Required fields are marked *