Published on: 03/28/17
It is hard to believe that the medical marijuana industry in New York is not even breaking even one year after medical marijuana became legal. At first glance, we may be amazed. There must be something fundamentally wrong, or perhaps the report by Buffalo News is not trustworthy. A closer look shows us just where the problems lie
Let’s see if we can make sense of what is happening in the state of New York. There were five licenses given to five companies who invested millions upon millions into state of the art facilities to grow medical marijuana and dispense it to patients who suffer from qualifying conditions.
Lawsuit pending: medical marijuana industry fights it out
In the meantime, there are lawsuits against the department of health over the process of selection, and why the companies awarded these five licenses were selected. Jill Montag, spokesperson for the Department of Health, claims that the 2015 selection process was transparent and that the selection criteria used to determine who the medical marijuana industry players would be was were objective.
Because ValleyAgriceuticals is in court with the department, she was not prepared to comment on the case. The department now plans to extend the five licenses to ten. There will be no new bidding process. Instead, the department will choose the next five best companies from the previous list.
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Five can’t survive how will ten?
There’s outrage from the five companies originally registered. They say that approving more cannabis companies is ridiculous since some of them have already had to sell out to companies in California because of lack of business in the state of New York.
Originally, the state said it would serve 200,000 enrolled patients within the first year. But to date, only 14,000 patients have enrolled to buy medical marijuana from one of the 20 odd dispensaries across the state. Half of these patients discontinued their purchases after finding medical marijuana too costly. They can’t afford it and health insurance won’t cover it. Some say they have had to travel too far, and others have passed away.
Program lacks doctors and patients
Less than 900 doctors have been certified to prescribe medical marijuana to patients. Sen. Diane Savino, the official responsible for medical marijuana in the state, said that the five companies awarded grow-and-distribution licenses are all struggling to stay afloat. There are simply too few patients and too few physicians to support the program.
$40 million ahead of demand…
PharmaCannis grows and processes medical marijuana in a $30 million facility in Hamptonburgh in Orange County. Huge parts of the operation stand empty as evidence of an unsuccessful business endeavor. Why would the state then lead five more businesses down the same road of failure? It doesn’t make sense, says Jeremy Unruh, general counsel of the company.
Unruh says the industry must work through the growing pains of the program, but the state should take the lead in persuading more physicians to enroll. He still firmly believes that cannabis is often more effective and safer than conventional medicines
A Vireo Health executive said that any one of the five companies could supply the total market. Right now, $40 million’s worth of marijuana sits in PharmaCannis’ waiting in vault. The plant is running at 10% capacity. Allowing five more growers would effectively kill the industry.
It sounds like the problems the New York medical marijuana industry is experiencing are two few prescribing doctors, too few dispensaries and too few patients able to bear the cost of medical cannabis.
Disclaimer: Views expressed here do not necessarily reflect those of Endoca and its staff. This article is not intended to provide medical advice, diagnosis, treatment or cure. Endoca CBD products have not been approved by the US Food and Drug Administration (FDA).