Recreational Marijuana Boom Leaves Vulnerable Patients Behind

New regulations and procedures in cannabis licensing have slowed patient access to medical marijuana. Meanwhile, profits are prompting medical growers to switch to recreational sales.

Without cannabis oil to treat her rare brain disease, Janice Patten has lost the ability to walk, one of her arms is paralyzed and she can’t see out of one eye.  

A patient in the Oregon Medical Marijuana Program, Patten uses the oil to fight pain and reduce swelling and pressure on her spine. But her medical cannabis grower is waiting for a new license from the Oregon Health Authority.  And licensing is held up, because both the health authority and the Oregon Liquor Control Commission are currently wrangling with a deluge of recreational cannabis applicants as the OLCC continues to set up the state’s adult-use system.

“I don’t have oil because the process is taking too long,” Patten said. “I feel (the Legislature) needs to understand that ... whatever the hold up is, it could cost people their lives. They may not understand that people like me exist. People whose lives actually depend on this.”  

Part of the problem for medical patients and dispensaries is that in the past they were able to operate with little state oversight. Small medical growers often subsidised medicine for their patients by selling their surplus on the black market.

Once growers enter the OHA or OLCC licensing systems for medical or recreational cannabis, that behavior has to stop. And that means small medical growers take a financial hit, even though their lost revenue is from their own former illegal activity.

Growers and dispensaries are also finding Oregon’s recreational market to be much more lucrative than the medical market, so many are just giving up on medical and moving into the recreational system, which leaves patients with fewer and fewer options, said Don Morse, director of the Oregon Cannabis Business Council.

“The growers have dropped a lot of their patients,” Morse said. “The problem is there really aren’t many medical dispensaries left. But we’re trying to come up with some ways to protect patients on the OLCC side.”

Morse said at his last count the state had 90 medical growers left, with OLCC predicting it will be down to 50 by the summer.

One potentially helpful option the Legislature is discussing to improve supply is SB 1057, which includes a measure allowing recreational growers to expand canopy in order to help the medical market. Those growers would give 75 percent of the cannabis grown in the expanded areas to patients at no cost, said Stephen Watson, legislative assistant for Ginny Burdick (D-Portland). Burdick is co-chair of the Legislature’s cannabis committee.

“As the recreational market has grown, the medical market has diminished in size,” Watson said. “There are fewer patients (because some have just gone into the recreational system), fewer growers and fewer caregivers. But we still want to make sure we provide the right tools for patients.”

Patten said she thinks more patient advocates need to participate in rulemaking for cannabis. One problem she said she sees is that most of the legislation is being driven by big business and its lobbyists, who don’t see the needs of patients as a primary concern.

“I would like to see actual patients on a panel or having some say directly in the decisions being made,” Patten said. “I think actual research needs to be done, possibly using some funds from the sale of recreational cannabis.

Regulations and Fees Push Up Costs, Limit Options

The decline in medical options isn’t just due to the loss of black market revenues or patients entering the recreational system. New licensing fees, increased lab testing costs and infrastructure requirements are also causing medical prices to spike, said Rhea Graham, who owns the Gramsterdam medical dispensary in Albany.

“So many people voted yes on Measure 91 because it said the recreational system wouldn’t touch medical,” Graham said. “But it did.”

Measure 91 legalized recreational cannabis in Oregon and was approved by voters in November, 2014.

As regulations changed, in 2015 Graham started paying $4,000 a year to the  Oregon Health Authority for her dispensary license. In 2016, she found out she had to pay an additional $4,000 a year to license her commercial kitchen. She paid that in December, but she’s still waiting on OHA to actually license it, she said.

“They said they were so busy pulling the medical licenses from those (dispensaries) going recreational that they didn’t have time to license medical processors,” Graham said. “My kitchen has been closed since October because I’ve been waiting.”

She also had an associated health clinic at her dispensary, but OHA told her she had to move it to a different location to meet licensing requirements. That would add at least another $1,000 a month for rent, Graham said.

And OHA also told her that her small operation needed two separate bathrooms, one for intake and one for processing, even though she’s the only one who works in the intake area, Graham said.

Graham used to sell cannabis capsules in 50 different strengths for her patients. But with the licensing and financial complications, she’s had to stop making them and use an outside vendor instead.

That means that she can’t sell her capsules for $1 or $2 each like she used to. The outside vendor means she only has one capsule strength to offer and at an increased cost of $4 each, she said.

Sage Amdahl, owner of Sage Advice LLC, a patient advocacy and consulting group in Washington and Oregon, said she’s seen similar issues with Washington’s recreational and medical systems, which merged last year.

“The medical market in Washington basically just got wiped out when everything merged,” Amdahl said. “I don’t want anyone to go through what we went through - especially not Oregon. The prices in recreational stores are just way too high for patients. People who need cannabis medicine - they’re getting 28 grams of cannabis oil a month for two or three months - and the $40 a gram you see in some dispensaries is just too much.”  

Washington also has an issue with not having many growers or processors licensed for medical cannabis production in the wake of recreational legalization. In 2016, the state allowed recreational growers and processors to apply for a secondary license to make medical products, but strict testing is more costly for those products and in general not many companies on the recreational side have decided to serve medical patients, Amdahl said.

“Medical pricing for testing from labs used to be cheap and affordable, but with state authorization now, the costs have increased about 100 percent,” Amdahl said. “And all the fees that dispensaries and growers are charged - they trickle down to customers.”

Dave Rheins, executive director of the Marijuana Business Association, said testing is a huge problem in legalizing markets across the country.

“As they put on more onerous testing requirements because of pesticides and other issues, the cost of production and testing has made medical cannabis very cost prohibitive,” Rheins said. “A lot of participants aren’t sure what they can or can’t do, and some are just plain opting out of the system.”

Eventually what Rheins thinks will happen is that medical marijuana across the country will be taken over by the pharmaceutical industry, which has the money to test and research medical cannabis more effectively than the cottage industry that has so far developed, he said.

“I think medical marijuana will likely go away, with Big Pharma taking it over at some point,” Rheins said. “I’m not sure that’s a bad thing, either. If I’m taking medicine, I’m not sure I want to buy it at the farmer’s fair. And with testing, we’re not really sure what we’re testing for, because every day those pesticide lists change. For the consumer it’s very expensive and confusing.”

But until something like that happens, patients in both states will continue to suffer, he added.

“Patients are in a world of hurt,” Rheins said. “Eventually it would be nice to see health insurance coverage for them. But until some sort of rescheduling occurs federally, the insurance companies don’t want to be involved. It’s all risk at the end of the day.”

Sue Vorenberg is a freelance journalist based in Vancouver, Washington. Reach her at [email protected].

Correction: Oregon Health Authority continues to be in charge of licensing medical cannabis grows and dispensaries. The Oregon Liquor Control Commission has authority over recreational licensing. An earlier version of this story incorrectly attributed how these responsibilities are delegated.

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