By Omar Sacirbey, John Schroyer and Bart Schaneman
New York’s lagging medical cannabis trade receives some good news, Donald Trump picks another marijuana critic for his cabinet, and Canada considers giving MMJ companies a leg up in the recreational market.
Here’s a closer look at some notable developments in the marijuana industry over the past week.
Medical marijuana businesses in New York, one of the most restrictive MMJ markets in the country, likely will receive a much-needed boost now that regulators have added chronic pain to the list of qualifying conditions.
In other states that allow patients to obtain marijuana for pain, typically 1%-2% of the population signs up for the medical cannabis program.
In New York, with a population of almost 19.8 million, that translates to 198,000-396,000 patients – although much will depend on how regulators decide to define chronic pain and if there are any other restrictions around it.
“The key will be to see whether the (health) department has the foresight to begin to trust the state’s licensed practitioners with the task of determining what meets the chronic pain criteria,” said Jeremy Unruh, general counsel at PharmaCann, a medical cannabis provider in New York and Illinois.
It’s doubtful the patient base will hit 2% of the population anytime soon because of several unique challenges.
For one, dispensaries in New York aren’t allowed to sell flower and edibles, unlike in other states that include pain on the MMJ conditions list such as Colorado and California. Also, there’s a dearth of doctors certified to issue recommendations, and dispensaries are far away from a big segment of the population.
As of Nov. 29, New York had just 10,730 registered MMJ patients – a fraction of a percent of the population – and 750 doctors certified to recommend medical cannabis.
The next few years will serve as a case study for how big of an impediment a ban on flower and edibles can be for a market (New York only allows limited forms such as tinctures, oils and capsules).
If adding chronic pain spurs New York’s market the way it has in other states, the lack of flower and edibles may not be such a patient deterrent. But if the patient base doesn’t balloon, businesses in states that have similar restrictions on what types of cannabis can be sold might have a long road ahead of them.
Price no barometer
President-elect Donald Trump keeps announcing cabinet choices who have made anti-cannabis statements.
This week, he announced his pick of U.S. Rep. Tom Price, R-Georgia, for secretary of Health and Human Services (HHS). The selection comes on the heels of his recent nomination of a staunchly anti-marijuana politician, Alabama Sen. Jeff Sessions, for attorney general.
As a result, many in the marijuana trade keep losing sleep worrying over what the future may hold.
But not Bob Capecchi.
The director of federal policies for the Marijuana Policy Project in Washington DC, Capecchi said Price most likely won’t have any real influence over the cannabis industry.
“It’s not nearly as important to me as the Sessions pick,” Capecchi said. “I know that HHS has a hand in rescheduling for any administrative rescheduling petition that would come through, but ultimately the decision is made by (the Drug Enforcement Administration), with HHS input.”
Capecchi’s read on the situation is that neither Sessions nor Price has any bearing on how Trump may approach federal cannabis policy.
“Trump’s public comments on the marijuana issue have all been, ‘I support medical marijuana, isn’t MMJ great,’ or ‘States should have the ability to reform their own laws,” Capecchi said. “I think that’s what he actually believes.”
Mike Liszewski, director of government affairs for Americans for Safe Access, chose to look more at what the reaction to Price’s nomination might be.
“It could make investors nervous. It could make states leery of proceeding with various aspects of their programs,” he said, while also noting, “It could have greater impact in terms of interfering with implementation.”
Canada opting for old guard?
It only makes good business sense for Canadian cannabis regulators to give existing medical marijuana producers first crack at helping get the country’s recreational cannabis market up and running.
At least, that’s the reaction of one analyst to a task force’s recommendations on how Prime Minister Justin Trudeau’s government should regulate Canada’s proposed MJ legalization system.
If the task force’s proposals are implemented, Canada’s new legal marijuana framework is likely to include a hodgepodge of rules and heavy regulations that initially will favor the 36 existing licensed producers, according to the Globe and Mail.
Matt Bottomley, an equity research associate at investment bank and research firm Canaccord Genuity, said the move is common sense because it will take time for new operations to go online.
“If they want to flip the switch right now, they’re going to have to let (the existing businesses) do it,” Bottomley said.
Bottomley co-wrote a note published earlier this week that predicts Canada’s adult-use marijuana market could reach sales of 6 billion Canadian dollars ($4.5 billion) by 2021, have 3.8 million rec users and a demand for roughly 1.27 million pounds of recreational and medical cannabis.
He also surmised after hearing the task force’s recommendations that Canada’s adult-use market is not going to look like Colorado’s: “You’re not going to have the ability to open a mom-and-pop dispensary.”
Expect the Canada cannabis trade to be highly regulated, in the vein of the country’s pharmaceutical industry, Bottomley said. Or, he added, the nation’s MJ market could follow the model of Canada’s government-run liquor stores.
“It’s still a relatively new industry,” Bottomley said of Canada’s cannabis trade. “Right now, it’s all the gremlins and weeding out everything that could go wrong.”
Omar Sacirbey can be reached at [email protected]
John Schroyer can be reached at [email protected]
Bart Schaneman can be reached at [email protected]