Retail Marijuana Could Hurt Medical Marijuana

Debra Borchardt, 

Could recreational marijuana hurt the medical marijuana community? A new report from GreenWave Advisors believes that legalized retail marijuana will disrupt the emerging medical sector.

In states where recreational marijuana has been legalized, medical marijuana patient counts have dropped. It was long suspected that many people who just wanted to smoke pot claimed a medical condition such as chronic pain in order to legally buy and use marijuana. Chronic pain is the most common qualifying condition and this is the group that drops in patient counts when retail marijuana becomes available.

The analysts’ report notes that patient counts decelerated in Colorado, Oregon and Washington D.C. Washington state doesn’t count patients and Alaska patients can grow their plants at home making it harder to count. GreenWave wrote, “Though Arizona permits only medicinal use, new cardholder applications were down sharply (73%) in May, perhaps in anticipation of a favorable election outcome for recreational use.”

Another data point that supports the idea that some chronic pain sufferers are really retail customers is that medical marijuana spending patterns follow retail purchase habits. Sales among recreational marijuana users jump during the holiday season in December, summer months and the 420 celebrations. 

This isn’t to suggest that all pain patients are really retail customers, but it does suggest that the medical market could be smaller than previously thought. The GreenWave report also states that as long as the DEA keeps cannabis as a schedule 1 drug, physicians will continue to shy away from recommending the drug, further stagnating the medical market.

GreenWave forecasts that as recreational marijuana markets dwarf the medical markets, many states will begin to merge the regulatory oversight of both the recreational and medical marijuana markets. The report stated, “Redundancy in oversight and enforcement mechanisms will be recognized as costly confusing.”

The report is careful to point out that it isn’t forecasting the demise of the medical marijuana market. The group believes that as new, more targeted drugs become available and doctors become more involved, the medical sector will recalibrate. Many doctors may want to wait for a prescription style drug before they feel comfortable recommending a cannabis solution. 

GreenWave believes that retail marijuana sales will meet or exceed $6.5 billion 2016. They forecast that annual sales will reach $25 billion by 2020. GreenWave wrote, “This year’s election choices can potentially effectuate $4.2 billion in incremental retail revenues by 2018 and $5.8 billion by 2021.”

Finally, GreenWave predicts we may eventually see “medically endorsed” recreational dispensaries.