Marijuana business owners line up against proposed medical cannabis overhaul

The following article was originally published in the Ohio Capital Journal and published on under a content-sharing agreement.

As Ohio lawmakers push to reform the state’s medical marijuana system, business leaders within that system are gearing up to block the effort. They contend that easing the entry of new producers could overwhelm the market and threaten the industry’s viability overall.

The legislation

Senate Bill 9 would consolidate oversight for Ohio’s medical marijuana program with a new Division of Marijuana Control in the Commerce Department. This isn’t the first time state Sen. Steve Huffman, R-Tipp City, has advanced the idea. Last session he got a similar measure through the state Senate.

Huffman and his co-sponsor Sen. Kirk Schuring, R-Canton, argue the existing medical marijuana program is failing.

“There’s approximately 324,000 Ohioans who are registered,” Schuring explained after a committee hearing last month, “but only about 160,000 are actually using the program.”

“To me, that speaks volumes,” he said.

Schuring and Huffman argue people who should be in the program are having trouble getting a physician recommendation. Those who have a recommendation, they add, don’t have enough options nearby. Once patients get to a dispensary, the sponsors argue, they face prices that can be prohibitive.

In a bid to address those perceived shortcomings, SB 9 would give doctors greater latitude to write recommendations, and it would throw open the doors to more marijuana businesses. The measure directs regulators to award dispensary licenses within 90 days to reach a target of one dispensary per 1,000 patients.

The pushback

A coalition of marijuana business owners currently operating in Ohio are pushing back on that potential influx of new companies.

Matt Close, who leads the Ohio Medical Cannabis Industry Association, argued the patient population has reached a plateau. Adding more suppliers won’t improve selection for patients, he argued.

“What this is going to do is it’s going to cause a cannibalization within the market,” he said, “where there’s not enough market and not enough patients.”

“This isn’t McDonald’s,” Close went on. “We’re not selling cheeseburgers, you don’t have to have a license to sell a cheeseburger in Ohio.”

Close acknowledged prices are higher in Ohio than Michigan, but argued Michigan faces far less regulation. He added that Ohio’s prices are lower than other neighbors like Pennsylvania.

Riviera Creek is a large medical marijuana cultivator and processor in Youngstown. CEO Daniel Kessler contended there’s no shortage of supply in Ohio’s marijuana market — he said Riviera is already holding back hundreds of pounds it can’t sell.

“If the current oversupply multiplies with new licensees,” he warned, “an overabundance or excess supply will encourage these new licensees to sell excess inventory into the black and gray markets.”

Kessler argued that sort of diversion has occurred in other states with oversupplied markets.

Peg Hollenbeck who founded Columbus-based processor BeneLeaves cut right to the chase.

“The bill is handing out licenses that we paid hundreds of thousands of dollars, hundreds of hours of work, and our license was awarded on merit or an FDA grade medical grade facility,” she said.

SB 9 orders the Division of Marijuana Control to award licenses within a specified timeframe. But the law does direct the division to do so based on merit.

Coming up

On Wednesday the bill comes up for its third committee hearing in the Senate. Members will hear from opponents of the measure.

Meanwhile, coalition members declined to weigh in on the recreational marijuana measure that could be on the ballot this fall. That proposal would create a statute legalizing marijuana use for anyone 21 or older. It would also allow home cultivation with a limit of six plants per person or 12 per household.

“At this point,” Kessler said, “our association is really driving towards either changing SB 9 or seeing it not pass.”

Close acknowledged the market isn’t perfect, and they’d welcome changes like including anxiety, insomnia, and depression among the qualifying conditions. The current language includes a “physician’s discretion” catchall that would likely cover those ailments.

“Look, there are a couple things in the bill that we do like,” Close argued, “but the things that we don’t like would destroy the program.”

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