Week in Review: Tiny Patient Pool in IL, Rec Opponents Vocal in MA + Cartels Losing Out

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Only a fraction of expected medical marijuana patients have signed up so far for Illinois’ MMJ program, opponents of recreational marijuana in Massachusetts are getting louder as the 2016 campaign season approaches, and Mexican cartels that used to rely on marijuana trafficking in the U.S. are taking a hit.

Here’s a closer look at several notable developments in the cannabis industry over the past week.

IL Insiders Optimistic on MMJ Customer Base

The number of medical marijuana patients registering with the state of Illinois has been much lower to date than many in the industry there had hoped – only about 1,600 have been approved, while roughly 2,500 have applied for MMJ cards.

That’s an abysmal number, given that there are nearly 13 million residents in the state, and some MMJ companies were hoping at least 100,000 would sign up for medicine.

One report from CBS in Chicago seemed to suggest that reluctance by Illinois doctors to prescribe MMJ could be a factor.

But while those numbers may be concerning to some in Illinois’ infant MMJ market, Chicago area attorney Mark Huddle said he’s confident it’ll only be a matter of time before the patient pool truly balloons.

Discussing the situation facing his cannabis industry clients, Huddle said, “We’re not overly concerned about that, because I think given some of the uncertainty with the transition of administrations… patients were holding back, so I think that it’s going to gain steam. The population of the state suggests that there will be a lot of folks who want to take advantage of this.”

As for doctors’ reluctance, Huddle said it simply means more business for physicians who are already willing to prescribe cannabis for patients. “If there’s a small number of doctors at the beginning, then I think that means more business for the doctors who are in it,” he said.

And given that Illinois required licensed MMJ businesses to have significant financial reserves on hand before they were issued permits to operate, Huddle said any company with a “prudent business plan” should be able to wait until the patient base expands further.

“You have to have the resources to ride out the first couple of years and get going,” Huddle said.

Deja Vu for Massachusetts Cannabis Advocates

Massachusetts is one of several states likely to have a statewide vote on recreational marijuana next year, and high-profile opponents of legalization are already speaking up – most recently Massachusetts Attorney General Maura Healey, who joined Gov. Charlie Baker in opposing the policy change.

But that isn’t deterring cannabis advocates.

“It’s déjà vu all over again,” said Steven Epstein, spokesman for Bay State Repeal, which is already organizing for a 2016 legalization campaign.

“We experienced a similar phenomenon in 2007 as the campaign to decriminalize an ounce or less was gearing up. And a similar response in 2011, when the medical use act was gearing up for its drive,” Epstein explained, referring to ballot measures in 2008 and 2012 respectively. The ’08 measure to decriminalize passed with 63% of the vote, and MMJ was approved in ’12, with 60% support.

Epstein said he views opponents like Healey and Baker as “politicians grandstanding to what we consider is their core base of police officers, pharmaceutical executives, and others who fear freeing the cannabis plant.”

The key in overcoming such opposition is simple, Epstein said: education.

“This is Massachusetts. We’re a fairly well-educated state, we’re a fairly well-experienced state with marijuana. And I don’t think concerns that have expressly been raised are going to reduce our vote below 50% plus one,” Epstein said. “And I think it’ll be much higher than that.”

Rec Legalization Affecting Cartels

Mexican cartels, which have been major suppliers of illegal marijuana in the United States, have seen bottom-line impacts from the legalization efforts in the U.S.

According to one online report, seizures of marijuana shipments between Mexico and the U.S. between 2013 and 2014 were down 21%. And 2014 represented just a single calendar year of legal recreational cannabis sales in Colorado, and only about six months of rec sales in Washington State.

The implications of the drop: First, legal sales are having a significant impact on the black market, and second, that kind of effect is only going to get bigger as more legal rec states come online.

“Approximately 30% of cartels’ drug export revenues come from marijuana,” Mexican security analyst Alejandro Hope told the online news outlet Fusion. “In the long term, Mexican marijuana could be displaced by legal production in the United States.”

Alaska and Oregon haven’t even begun legal rec sales yet, and more states – including California, Nevada, Arizona, Massachusetts, Maine, Rhode Island and Vermont – are also widely expected to legalize recreational cannabis in the near future.

That doesn’t mean the black market is out of business. Plenty of indications are to the contrary, and cannabis from Colorado and Washington – while most likely purchased legally – has been seized by law enforcement officials all over the country after being trafficked illegally across state lines. Concern over the potential for diversion from legal cannabis companies to illicit dealers is still at the forefront of many legalization debates.

But the fact that Mexican cartels’ bottom line is hurting when it comes to cannabis can be considered a sizable step in the right direction, not just for the marijuana industry in the U.S. but also in terms of general public policy.

John Schroyer can be reached at johns@mjbizmedia.com