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EAB: A competitive medical marijuana market is an affordable one

House Bill 2 was touted as a bill to ensure access to affordable, safe medical cannabis products, while providing an opportunity for minority and female entrepreneurs to compete for grower and processor licenses. The bill that was passed by the General Assembly does little to advance either objective.

The Maryland Medical Cannabis Program only will succeed if it meets patient expectations that include affordability, safety and product choice. And Maryland will achieve that only if our program is designed to be competitive and promote innovation, rather protect a handful of current licensees and create barriers to entering the medical cannabis industry.

In 2015, the Maryland Medical Cannabis Commission adopted regulations providing for unlimited processor licenses and the authority to issue 15 new grower licenses in 2018. Processors in particular drive research and development in an industry devoid of established university- and government-based research programs. Why restrain this engine of creativity?

We have previously supported the effort to create meaningful opportunities for minority and female entrepreneurs to successfully compete for new grower and processor licenses and explained how HB 2 creates barriers to entry by limiting opportunity, and not only to minority and female entrepreneurs.

HB 2 is anti-competitive and protects current licensees. Affordability cannot be ensured if competition is limited and future expansion frozen in time. There is no strong evidence that the current licensees can successfully meet the future needs and wants of a robust medical cannabis market at affordable prices. Promoting competition will only lower prices and expand the variety and quality of products for patients.

Arizona and California are models for Maryland to follow. In its first year, Arizona registered 28,000 patients. (In its first few months, by comparison Maryland had more than 20,000 qualifying patients.) By the end of 2017, Arizona registered more than 150,000 patients and sold more than 86,000 pounds of medical cannabis. Arizona promotes affordability and diversity by licensing growers to process their harvest to support their own dispensaries, approximately 130 licensed statewide. California is promoting opportunity by adopting a multi-tiered grower licensing system based on ranges of square footage and a cap of 22,000 square feet of indoor growing area.

Cannabis Benchmarks reports the national spot price of cannabis has dropped from $1500 per pound in January to $1347 per pound in March. Budzu reports Arizona medical cannabis selling at $1334 per pound and $243 per ounce retail. Thirteen of 14 Maryland growers are reportedly selling product to 11 processors and 30 dispensaries, yet wholesale prices remain over $4000 per pound, including some strains selling for more than $4500 per pound and $500 per ounce.

It is true that both HB 2 and Senate Bill 1, its Senate companion, create a “Compassionate Care Fund” funded by an industry excise tax to pay for medical cannabis for Medicaid and Maryland veteran health care patients. That is nice, but what of the rest of Maryland citizens who have no insurance or private health insurance and must pay out of pocket? What about their financial barriers to access of medical cannabis? Must they pay such a premium? Perhaps the answer is found in the anti-competitive nature of these bills.

Maryland has historically been an incubator of scientific creativity and has a healthy, growing bio-medical and pharmaceutical private sector. Why treat medical cannabis any differently? Government should promote an environment for innovation, not handcuff it. Yet that is just what HB 2 accomplishes.

The Senate has the opportunity to create a competitive and innovative medical cannabis industry that provides patients with a variety of safe, affordable medical cannabis products by eliminating the bill’s anti-competitive caps and moratorium and embracing expansion and competition.

Editorial Advisory Board member Stephen Meehan is a minority owner of Hippocratic Growth LLC, which operates Ash + Ember dispensary in Centerville.

Editorial Advisory Board member 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
Marcella A. Holland
David Jaros
Ericka King
Stephen Meehan
C. William Michaels
Angela W. Russell
H. Mark Stichel

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.