The number of states with legal medical cannabis has increased dramatically – 28 (plus Washington D.C.) at last count.
At the same time, recreational cannabis has provided millions of Americans access to legal cannabis without needing to see a physician to establish a medical need. With this ease of access in many states, there are questions about the future of the separate medical and recreational cannabis industries.
“We expected to see medical take a backseat after recreational cannabis became legal,” Amanda Woods, Compliance Officer & Marketing Manager for Choice Organics, said. “Fort Collins collectively saw a drop off in medical patients locally. It was one less step to access recreational cannabis, so it did not surprise us that there would be fewer medical patients.
“For our medical cannabis specifically, the patient base stayed consistent post Amendment 64, but that is also because we take pride in our medical store and the patients that got us here. We take care of our patients and our base stood with us.”
It makes sense for patients to go through extra steps to acquire a medical card, since Colorado has made the process much less complicated and because the cost of goods is lower.
“That doesn’t mean physicians are dropping their standards for recommending medical cannabis,” Woods said. “It definitely doesn’t mean that. The state has just moved the application process completely online, so it has become so much easier to complete all of the steps. It is one less barrier for patients on the medical side. The state is continuing to expand its services to make the application process simpler and smoother.”
Another barrier that has dropped on the medical side of the cannabis industry is pricing. There are significant taxes (10 percent) applied to cannabis sales on the recreational side, which are reflected in much higher prices for equivalent products. And while the price of recreational cannabis has dropped since the inception of recreational sales, the difference is still there.
“From the state’s perspective, it makes more sense to let the medical cannabis program to extinguish naturally on its own because the tax revenue collected from medical sales is trivial in comparison to recreational sales. Colorado has a high tax on recreational cannabis that is not applied to medical sales. Creating more tax dollars earmarked for schools and other state budgetary needs makes sense,” Woods said.
In fact, some Colorado municipalities are no longer issuing medical cannabis licenses to dispensaries, ensuring any new businesses deal strictly in recreational sales.
Additionally, medical cannabis prices remain much more consistent because of the heavily regulated production system. Simply put, the number of medical patients served at a dispensary dictates the amount of cannabis produced. The specifics vary between municipalities, but the general guideline is the same. Thus, the market is never sparse or flooded and prices remain steady over time, unlike the sometimes volatile marketplace for wholesale cannabis on the recreational side.
“In a lot of ways medical is our safety net as an industry,” Woods said. “For the smaller shops, they can’t compete on the wholesale market with the large companies for recreational product. The market regulation, vertical integration, of medical means they can keep a foothold and keep serving their patients. I think that is good for us as an industry.”
Medical cannabis sales are also seen as a safety net in other ways during a time of uncertainty regarding federal attitudes towards recreational cannabis sales.
“While it is no guarantee, the new administration has made statements in support of medical cannabis,” Woods said. “We don’t want to jump to any kind of conclusions about future actions regarding the recreational industry, but we are optimistic about our future and are willing to work to preserve recreational cannabis as a legitimate industry.”
Because medical cannabis is legal in so many states, Woods thinks that it will be preserved regardless of any changes to the recreational industry. While the potential for elimination of the recreational industry in Colorado and other states certainly exists, Woods notes that at this point there are governmental offices and departments with stake in the industry because of tax revenues.
Colorado would have a lot to lose if the industry were to be shut down and Woods expects that in the case of federal actions against the industry the state would push back.
For consumers, next steps after a shutdown of recreational cannabis retail sales are less clear.
For those patients, making sure any medical card is active and up-to-date should be a priority to safeguard against the possibility of recreational cannabis no longer being available to them in the future.
“[If recreational cannabis were no longer being available] I think that a lot of the folks here in Colorado who previously held a medical card and simply have not renewed would certainly choose to renew. And I think that initially we would see a surge from people accustomed to legal cannabis trying to acquire their medical cards,” Woods said. “But it is hard to say how many.”
Woods is optimistic about both the medical and recreational cannabis industries in Colorado. While federal policies and attitudes are certainly in a state of flux, she is confident that on a state level the industries are hitting their respective strides and that the success of both will translate to policy on a higher level.
“We are going to have to wait and see what happens, but I think we have a good model in Colorado.
Both medical and recreational industries are thriving, and I am looking forward to a future where they are both viewed as legitimate industries both in Colorado and nationally,” Woods said.
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