November 3, 2016
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New York isn’t the only state with overly restrictive medical marijuana regulations, but it is the state in the news about it during the past week. As USA Today reports, counties in the state of New York are experiencing huge gaps between the amount of medical marijuana excise tax revenue they expected to receive this year and the amount they actually received.
For example, in Broome County, New York, the gap is nearly $850,000. The county projected that it would receive $850,000 in excise tax revenue from medical marijuana sales but has only received $320. The reason can be chalked up to overly restrictive laws.
As Cannabiz Media reports in its upcoming Marijuana Licensing Reference Guide: 2017 Edition, accessibility is a key factor in the success of marijuana-related businesses. New York provides the perfect example of how regulations can limit accessibility, which limits the performance of the entire industry within that state.
There are several areas where restrictive regulations in the state of New York have a direct effect, not just on excise tax collections for individual counties, but on the entire market:
Five companies are licensed to operate dispensaries in New York State, but there are only 17 dispensaries currently operating with a limit of 20 in total allowed statewide. There is only one dispensary in Broome County, which is 716 square miles. To put that into perspective, the state of Rhode Island is 1,212 square miles.
Bottom-line, it could be very inconvenient or impossible for New York residents to access a dispensary simply because there isn’t one in easy driving or traveling distance. As a result, sales will go down.
According to New York regulations, physicians must pay $250 and take a four-hour online course to register with the state before they can recommend medical marijuana to patients. It’s not surprising that less than 1% of New York’s physicians have registered.
In Broome County, only three doctors are registered to recommend medical marijuana. Without doctors to recommend marijuana, fewer patients are able to access it, and sales will be minimal.
Furthermore, it is difficult for patients to find registered physicians in New York. Currently, there is not a database or other convenient way to identify registered physicians other than word of mouth or contacting doctors directly and asking one by one.
New York regulations restrict the types of products that are available in the state with the least expensive forms (smokeable and edible) not allowed. Patients can only purchase marijuana in capsule or oil forms. If patients can’t access the type of product they prefer, sales will not grow.
In order for a physician to recommend medical marijuana, a patient must have a qualifying condition. The problem in New York is that the number one condition patients seek to treat with medical marijuana, chronic pain, isn’t covered.
Across the 27 states that allow medical marijuana, 23 cover chronic pain, and 59.2% of medical marijuana patients across the country cite chronic pain as their qualifying condition. If a state doesn’t allow patients to access medical marijuana for the right conditions, particularly chronic pain, sales will not grow.
With inadequate access, medical marijuana sales will decrease. It’s not surprising that only 8.972 patients of the approximately 19.75 million state population are certified by the state to use medical marijuana as of October 17, 2016 according to the Times Herald Record. In Broome County, only 41 patients of the approximately 200,000 population are certified to use medical marijuana. It’s simply too difficult due to overly restrictive laws for patients to access the medical marijuana they want and need. Instead, they forego it or buy on the black market.
New York isn’t the only state with a lagging medical marijuana program. The program in Illinois is also burdened with over-regulation, as is the program in Minnesota. In Illinois, the state is working to add additional key qualifying conditions to its program, while in Minnesota, the state added chronic pain as a covered condition in July of this year.
To date, New York plans to make just two changes to its program to increase access to medical marijuana. The first is creating a registered physician database that doctors can opt into being listed, so it’s easier for patients to find them. The second is the Department of Health’s plan to add five more companies to produce and distribute medical marijuana within two years. However, these two changes are just a start. Until the state addresses the accessibility problem from all angles, those excise tax revenues will continue to fall very short of expectations.
For a detailed, state-by-state analysis of U.S. marijuana licensing, including accessibility issues, be sure to add your name to the growing list of people who want to be notified when the comprehensive reference guide, Tracking Marijuana Licenses State-by-State: 2017 Edition, is available!
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