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Monday, September 26, 2022

Outgoing PA official: Customers should ‘order’ cheaper medical cannabis

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HARRISBURG – Patients pay less for medical marijuana in Pennsylvania than they did two years ago. Dispensaries pay less in bulk as well, but at a much steeper regression rate.

Since January 2020, dry leaf retail prices are down 14% compared to a 35% drop in wholesale prices.

John Collins, retired director of the Pennsylvania Medical Marijuana Program, shared the data during the program’s advisory board meeting Tuesday. He described the trend as “disturbing” and said any savings in wholesale costs should be enjoyed by customers.

“There is a great opportunity to pass the savings on to patients. Speaking on their behalf, they should demand that this be passed on to them,” said Collins, who has overseen the program since its inception in 2016.

However, the industry representative said the wholesale price did not reflect the additional operating costs incurred by the dispensaries. Patients will get better service through policy updates and regulatory changes, said Meredith Buettner, executive director of the Pennsylvania Cannabis Alliance. These efforts will bring the state in line with standards for other states that allow medical marijuana and will result in actual savings for patients, she said.

She said eliminating redundancy in the testing protocol would be the quickest way to bring prices down. Another opportunity would be to allow processing. Dry leaves with trace amounts of mold cannot be sold in retail stores. In cases that allow treatment, the leaf is reprocessed for cannabis extracts and microbial contaminants are destroyed.

Although amendments to state law adopted last year ease some costs associated with video surveillance, for example, Buettner said it would only apply to new operators and not those already in operation. According to Buettner, one operator estimated the savings at $500,000 per year were control changes applied to existing businesses.

“You have operators who are forced to destroy the product without being able to use a normal industry standard process to get that product safely to market,” Buettner said. “We test some products too often to be safe. These costs are borne by patients.”

Medical marijuana sales began in Pennsylvania in 2018. At the time, Collins said 56.8 million products were dispensed and $4.8 billion in total in retail and wholesale sales. There are currently more than 406,000 patients and caregivers with active certifications.

According to data shared by Collins, the retail price per gram fell to $13.40 in February compared to $15.67 in January 2020. Wholesale prices decreased from $10.19 to $6.65.

There isn’t much a medical marijuana office can do to control prices.

State law allows price caps if the Department of Revenue determines that the rates are “unreasonable or excessive.” Caps can last up to 12 months. But Collins said hats can do more harm than good. It would set a cap that would require some operators to cut prices but potentially incentivize others to raise prices to maximum cost.

“In my experience, they don’t work,” Collins said. We cannot set a specific price. This is an open market, a model of the free market. Dispensaries take ownership of the product and have the right to price it. What we can do to encourage more competition is to highlight it.”

Buettner questioned the timing of Collins’ comments. While the Department of Health declined to confirm when Collins will retire, Buettner said he will be leaving at the end of the month. She said the data Collins shared on Tuesday is the only data available to industry operators.

“This is a conversation we’ve been trying to have with the department for 18 months,” Buettner said. “This is not the typical experience for Pennsylvania operators operating in other jurisdictions. There is a lot of data available. There is a lot of communication with the program.”

State Representative Chris Raab, D-Philadelphia, has proposed legislative reforms to protect workers, renters and drivers from potential penalties for medical cannabis use. Raab himself is sick. He said his effectiveness in treating his post-traumatic stress disorder has proven invaluable.

Raab said reforms must focus on equity, or else they will fail.

“I am totally looking forward to legislative reforms,” Raab said of medical marijuana prices. “Medical cannabis is very expensive.”

Luke Shultz, a certified patient and appointed governor to the Medical Marijuana Advisory Board, belongs to a subcommittee that has researched affordable access solutions.

“In many cases, patients are using less than they need or not using the products that work best for them,” Schultz said.

The subcommittee’s report recommended supporting the cultivation of medical marijuana at home, allowing more market operators to increase competition, and making new regulatory changes.

The $50 fee for a patient ID card and the $20.85 cost for a provider background check for income-eligible patients have now been waived under the terms of new amendments to the state’s medical marijuana law. Schultz suggested extending certifications from one to two years, and lifetime certifications for chronic or terminal conditions.

Recommendations were rejected at a rate of 7 – 2.

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