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EAB: Promote diversity, competition in cannabis program

In 2018, Maryland legislators will attempt to complete unfinished business from 2017 to promote “a successful but consumer-friendly medical cannabis industry in the State to provide patients with affordable access to medical cannabis” and promote participation by “small, minority, and women business owners and entrepreneurs.” However, buried in Senate Bill 1/House Bill 2 is a six-year moratorium on the expansion of grower and processor licenses that totally undermines the promise of affordable access to medical cannabis.  The public should be concerned.

Filed jointly as emergency legislation, SB 1 is co-sponsored by Senate President Thomas V. “Mike” Miller, D-Calvert, Senate Education, Health & Environmental Affairs Committee Chair Joan Carter Conway, D-Baltimore City, and Sen. Nathaniel McFadden, D-Baltimore City. H.B. 2 is sponsored by Del. Cheryl Glenn, D-Baltimore City, chair of the 50-member strong Legislative Black Caucus.

The legislation shrinks the current Natalie M. LaPrade Medical Cannabis Commission from 16 to nine members. The secretary of health’s designee would survive, but the balance of current commissioners would be replaced with five members appointed by the governor, with advice and consent of the Senate, and three members chosen by the governor, from lists provided by the Senate president and the speaker of the House, of candidates with business, private foundation, academic experience or professionals from health, agriculture or finance fields. New members would receive compensation; current commissioners volunteer.

SB 1/HB 2 proposes two positive steps to promote the inclusion of small, minority, and women-owned businesses. First, the bills mandate the new commission conduct comprehensive outreach to small, minority, and women business owners and entrepreneurs with an interest in growing, processing and dispensing medical cannabis and to establish medical cannabis employment training programs. Second, the legislation requires the commission adopt lawful race- and, presumably, gender-neutral practices to actively seek diversity by encouraging applicants who qualify as a Minority Business Enterprise under state procurement law or “who are small, minority, or women-owned business entities” to apply for licenses. Presumably the new commission would not ignore this the way the old commission did. The legislation would also expand from 15 to 20 grower and processor licenses but is silent on new dispensary licenses.

Serious flaw

Yet SB 1/HB 2 has a serious flaw. Buried in the legislation is a moratorium on expansion of new grower and processor licenses until 2024 — a gift to existing licensees and those who receive them under the legislation. One moratorium advocate is Michael Bronfein of NeighborCare Pharmacy fame who, with his daughter, Wendy, is the principal owner of Curio Wellness, purportedly a $20 million fully automated facility housed in an industrial building in Baltimore County. Bronfein recently told a group of hopeful minority applicants of his continuing “learning curve” struggles and his support for a 10-year moratorium in order to recoup his investment in an industry that he believes could generate $600 million over the next six years.

This proposed moratorium is anti-competitive and a protectionist measure that should be eliminated from the bill.

The currently constituted Medical Cannabis Commission chose well-capitalized companies owned primarily by white men who promised large grow facilities with high price tags: many 45,000 to 65,000 square feet costing $10 million or more without any guarantee that they would successfully meet patient demand or achieve affordable medical cannabis.

Only a few months underway, the Maryland program already has over 20,000 qualifying patients. By comparison, Arizona closed its first year in 2012 with 28,000 patients. Bronfein compares Maryland to the Arizona market. As 2017 closes, Arizona has over 150,000 patients and is on track to sell over 70,000 pounds of medical cannabis. In Arizona, growers process their harvest to support their own dispensaries, approximately 130 licensed statewide.

There is little doubt Maryland will match or exceed Arizona’s growth during the moratorium. Unless the legislative goal is to concentrate profits in an oligarchy and maintain high prices for patients, Maryland needs more growers and processors to meet demand. Already Maryland’s growers are commanding prices over $3,300/lb., far above this week’s medical cannabis national average of $1,500/lb. Patients are reportedly paying over $600/ounce. This is unsustainable and prohibitive to lower-income Marylanders. Even though SB 1/HB 2 creates a Compassionate Use Fund for Medical Assistance and the Veterans Administration patients, the industry-funded program will be exhausted quickly at these prices.

Unsustainable approach

SB 1/HB 2’s oligarchical approach is unsustainable.

Marylanders will benefit by expanding diversity in the state-created medical cannabis industry. The original, enabling legislation allowed an indeterminate number of new grower licenses to meet patient demand and allowed for unlimited processors, the real engine of medical cannabis creativity.

Medical cannabis was first recognized as an effective drug in the United States in 1851. Restored to its pre-1937 prohibition status by 29 states and the District of Columbia, medical cannabis is at the cutting edge of anti-inflammatory and pain relief, tumor reduction, seizure control, palliative care, and many other conditions.

Unlike opiates, medical cannabis has no associated deaths or physical addiction. By contrast, opiate addictions are undermining employment participation and overdoses are the leading cause of death for Americans under 50.

We encourage the legislature to strike the anti-competitive moratorium in the name of Maryland patients and encourage diversity of industry participants to promote new ideas for medical applications and technical processes.

Advisory Board member Stephen Z. Meehan is a minority owner of Hippocratic Growth LLC, a majority-woman-owned medical cannabis dispensary pre-approval awardee awaiting inspection for final licensure. 

Editorial Advisory Board members James B. Astrachan, John Bainbridge Jr. and Arthur F. Fergenson did not participate in this opinion.

EDITORIAL ADVISORY BOARD MEMBERS

James B. Astrachan, Chair

James K. Archibald

John Bainbridge Jr.

Wesley D. Blakeslee

Martha Ertman

Arthur F. Fergenson

Susan Francis

David Jaros

Ericka King

Stephen Meehan

C. William Michaels

Norman Smith

H. Mark Stichel

Ferrier R. Stillman

The Daily Record Editorial Advisory Board is composed of members of the legal profession who serve voluntarily and are independent of The Daily Record. Through their ongoing exchange of views, members of the Board attempt to develop consensus on issues of importance to the Bench, Bar and public. When their minds meet, unsigned opinions will result. When they differ, majority views and signed rebuttals will appear. Members of the community are invited to contribute letters to the editor and/or columns about opinions expressed by the Editorial Advisory Board.

Find out more about the members of the Editorial Advisory Board.