Marijuana Law, Policy & Reform

Editor: Douglas A. Berman
Moritz College of Law

Sunday, March 12, 2017

"Medical marijuana business in New York is a bust so far"

NEW-YORKThe title of this post is the headline of this lengthy new local article from Buffalo.  Here are excerpts:

The state health commissioner last year declared New York’s medical marijuana program a success. But the five companies that the state selected in 2015 to get marijuana into the hands of people suffering from debilitating and sometimes terminal diseases such as cancer, AIDS and multiple sclerosis tell a different story.

“Our company is not close to break-even yet," said Ari Hoffnung, president of Vireo Health of New York, which has a marijuana-growing facility in Fulton County and dispenses its products in two downstate and two upstate locations. “And based on my understanding, no one has made a dime here in New York."

If other states were a guide, New York should be preparing for at least 200,000 patients enrolled in the program, the industry estimates. But since medical marijuana went on the market in New York State a little over a year ago, just over 14,000 patients have enrolled to buy the drug at one of the 20 dispensaries scattered around the state. Only half of those are regular customers. Many stopped taking the drug because of high costs, distances they must travel to get it or because they died, industry executives say. Fewer than 900 doctors signed on to certify patients to use the drug.

“There are two things the program is lacking: physicians and patients," said Sen. Diane Savino, author of the bill that opened up medical marijuana treatment in New York State. Now, while the five companies producing medical marijuana struggle to stay alive for lack of customers, the Cuomo administration wants to add five more grow-and-distribution licenses.

At the same time, the administration is not opening up a new bidding process. Instead, the Cuomo administration is turning to five companies – from the original 43 bidders – that lost in the application process two years ago. All of this is worrying the companies still trying to stay afloat. “Every single one of them is financially struggling," Savino said....

Instead of adding new grow facilities, the existing licensees say, New York should more aggressively attract physicians to participate and put dispensaries in more locations. Savino, the Staten Island senator who sponsored the legislation, said she is pushing the Cuomo administration to award new “retail license” dispensaries, but to bar the five existing grower/dispensary firms from owning them. She said the administration does not understand how the medical marijuana marketplace works and that adding new growers while supplies exceed demand is “a big mistake.”

Marijuana companies say they are not arguing more licenses should never be issued to grow and sell marijuana. “No one is making any money here. Twenty percent of us have already failed," said Hoffnung, president of Vireo Health, referring to one of the original licensees that sold out to a California company because of financial problems.

http://lawprofessors.typepad.com/marijuana_law/2017/03/medical-marijuana-business-in-new-york-is-a-bust-so-far.html

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