Virginia’s medical cannabis program is struggling to capture patients amid evolving local and adult-use policies in bordering states, resulting in above-average prices that drive consumers to purchase cannabis products elsewhere, according to a new study of the state’s medical cannabis market released Tuesday.
The 78-page report is the result of legislation emerging from the 2023 General Assembly session that tasked the Virginia Cannabis Control Authority with reviewing Virginia’s medical cannabis program, focusing on patient access and determining the necessity and feasibility of adding new licenses to the existing program.
The study exposed the flaws in Virginia’s medical cannabis program just weeks before lawmakers are set to reconvene for the 2024 session, where Democrats — who regained full control of the legislature earlier this month — and some Republicans are hoping to tackle legislation that would create a regulated marketplace for all adult-use cannabis in the commonwealth.
The Cannabis Control Authority contracted with Cannabis Public Policy Consulting to complete a population survey of past-year cannabis consumers and patients, an assessment of supply based on patient experiences, and a thorough policy analysis. The consultants surveyed 1,827 consumers in Virginia, 476 of whom are certified medical users.
The study, introduced during a livestreamed authority board meeting in Richmond on Tuesday, found that the price of medical cannabis in Virginia is significantly higher than in other states, resulting in 90% of patients purchasing cannabis from sources other than the Virginia medical market. The largest proportion of grams is obtained from an unregulated, “but not necessarily illicit,” market.
Consumers in Virginia reported spending an average of approximately $19 per gram for flower products in this survey, although publicly available price data from medical dispensaries in the commonwealth suggests a price closer to $14 per gram.
With an average price of $8.73 per gram in September 2023, medical cannabis in nearby Washington, D.C., is “considerably cheaper” than in Virginia, the study found. In Maryland, adult-use cannabis is only slightly higher, at $9.27 per gram on average.
About 57% of Virginia medical marijuana patients, the study found, obtained cannabis by growing at home, and 65.2% of patients received cannabis from a friend or family, suggesting that recent home-grow and adult-use sharing legislation has negatively impacted the ability of pharmaceutical processors to obtain and retain demand.
Mackenzie Slade, Cannabis Public Policy Consulting’s executive director, said at Tuesday’s meeting that the path to lower prices isn’t just an increase of capacities for the pharmaceutical companies already licensed to retail medical cannabis products in Virginia.
“In the current cannabis policy landscape, it is unlikely that the additional stores for the existing firms could successfully serve as a mechanism to drop prices, simply because pharmaceutical retailers would maintain regional domination over supplying price. That is just the nature of the limited license design, part of which we believe is the reason that prices remain high,” Slade said.
First attempts at legalizing medical cannabis use in Virginia date back to 1979, when the General Assembly passed legislation allowing doctors to recommend cannabis for glaucoma or the side effects of chemotherapy. But for decades, federal law prohibited these prescriptions, given cannabis’s status under the Controlled Substances Act as a Schedule I controlled substance with no accepted medical use.
Virginia’s medical cannabis program began officially in 2015 when the state legalized cannabidiol, or CBD, and THC-A oil for patients with intractable epilepsy under legislation that was signed into law by then-Gov. Terry McAuliffe.
A few years later, the legislature created the pharmaceutical processor license type to produce and sell CBD and THC-A oil. The Virginia Board of Pharmacy awarded five such licenses in September 2018.
Not long after, the General Assembly passed the “Let Doctors Decide” bill, which expanded eligibility for CBD and THC-A oil to all patients with a recommendation from their physician. Both oils were then made available as a treatment for any diagnosed condition or disease as long as an individual had a written certification from their doctor and registered as a medical cannabis patient with the Board of Pharmacy.
Today, there are 21 state-licensed dispensaries in Virginia, including in Abingdon, Bristol, Christiansburg, Danville, Lynchburg and Salem, according to data provided in the study. On a statewide average, that is one retailer for every 413,505 residents — a ratio considerably lower than that of Florida or South Dakota, which have dispensary densities of one retailer per 36,890 residents and one per 11,664 residents, respectively.
Virginia’s limited medical cannabis market was shaken up in April 2020, when a Democratic majority in the General Assembly decriminalized simple marijuana possession for adults 21 and over, which became law in July that year. In February 2021, both houses of the legislature passed legislation to fully legalize cannabis, with an effective date of 2024. But without a regulatory framework, the state-licensed dispensaries to this day remain the only option to purchase cannabis products legally.
And many users continue to report ongoing issues with medical cannabis products in addition to the high prices, including high registration fees, inconsistent supply, low potency of the retailed product and overall access — even after Gov. Glenn Youngkin this spring signed legislation eliminating the requirement that health care practitioners register with the Board of Pharmacy in order to issue written certifications for medical cannabis to patients.
According to the study released Tuesday, the estimated patient enrollment in Virginia’s medical cannabis program reflects just 0.5% of the total state population, further supporting the finding that individuals can meet their demand for medical cannabis elsewhere.
“Of past-year consumers that are not patients, 22% reported they did not need to become medical patients because they already had access to cannabis, suggesting that interest in program participation is low among potential patients despite the recent reduction in barriers to patient participation,” the report found.
The study recommended several pathways aimed at lowering prices and shifting patient consumption to regulated medical dispensaries.
Through a legislative change, Virginia could create three new standalone license types: a cultivation license, a manufacturing license and a dispensary license for medical cannabis retailers.
Alternatively, the General Assembly could adopt legislation allowing for additional pharmaceutical processor licenses, which would create more regulated dispensaries, potentially without regional limitations, while allowing existing operators to reasonably expand their maximum of currently six dispensing locations across the state.
The state could also allow operators to hold multiple licenses across the supply chain at once, which would create lower barriers to entry for new businesses.
However, the report warns that the addition of supply and new market entrants potentially could “unintentionally disrupt the stability and integrity” of the medical cannabis market. “For one, failure to introduce additional supply in a controlled and scalable fashion runs the risk of producing a supply surplus … [which] have set cannabis markets across the nation into instability, leading to plummeting prices and businesses exiting the market.”
Jeremy Preiss, chief executive of the Cannabis Control Authority, on Tuesday hailed the study as “very substantive.”
“It’s a lot to digest, it’s less of a concern and more of a challenge, as we know these legislative sessions can be quite compressed,” Preiss said of the suggested pathways for lawmakers to change the current medical cannabis framework.
“None of these policy suggestions can be pursued without a consultation with the stakeholders. There is a lot of material to digest and sift through, it’s going to be a sizable task,” Preiss said.
H/T: cardinalnews.org
