The Missouri Department of Health and Senior Services said it will distribute 338 licenses to grow and sell medical marijuana. The number is far less than the 510 hopefuls who have already paid application fees with hopes of receiving a license.
These licenses are for different aspects of the medical marijuana pipeline: 60 to cultivate marijuana, 192 to dispense and 86 to manufacture marijuana-infused products.
Even though the number of licenses to be issued is the minimum of what the law allows, a report from University of Missouri economists indicates that might be too much based on demand in other states with similar laws.
“My gut reaction tells me we probably don’t need 60 cultivating licenses to supply the market the first few years,” said Joe Haslag, who authored the report with two other economists.
Based on the sales from other states, the number would result in “a lot of product being left on the shelves for quite some time,” he said.
Haslag called the task of setting the marijuana supply a “Goldilocks situation.” If a state allows for too little marijuana, the prices will go up, and patients who need it won’t be able to afford it. But too much in the system could mean prices would fall so much that people might sell it illegally.
“What happens when a product can be used just as easily in a legal market and an illegal market? I mean, the plant doesn’t know how it’s being used,” Haslag said.
Some health advocates are concerned about the number of dispensaries the state has allowed. The law states each of the state’s eight congressional districts have at least 24 dispensaries.
“I think we’re going to end up seeing way too many for the demand, when you look at the geographic size of the congressional districts,” said Brandon Costerison, project manager of the MO-HOPE Project at the National Council on Alcoholism and Drug Abuse.
Costerison also expressed concerns about the dispensaries’ marketing.
“Are we going to see these marijuana dispensaries taking advantage of communities that are deeply impacted by health disparities, like tobacco and liquor stores [have]?” he asked.
Medical marijuana advocates say the report vastly underestimates the number of potential patients in Missouri.
“It’s a really good, solid analysis in many ways. There’s one fatal flaw in that data, and that’s the anticipated patient count,” said Jack Cardetti, spokesman for the Missouri Medical Cannabis Trade Association who also worked for the Amendment 2 campaign. “It ruins the rest of the analysis.”
The report estimates the number of qualified patients in Missouri in 2020 would be 19,000. New Approach, the organization behind Amendment 2, thinks the number could be more than five times as many.
Looking at states that legalized medical marijuana before 2014, as the report’s authors did, would lead people to wrong conclusions, Cardetti said.
“Data that’s more than five years old has no bearing on what is likely to happen here,” Cardetti said. “It’s hard to compare [any two states], but it becomes really hard to compare Missouri to other states when you use old data.”
However, there’s no way to be sure of the extent of the demand for medical marijuana until patients start applying for medical cards later this summer.
What's more, it’s difficult to use other states to posit Missouri’s needs, because each has different regulations regarding who is allowed access to medical marijuana. For example, Oklahoma is on track to reach 150,000 medical marijuana patients its first year of legalized use. But unlike Missouri, doctors in Oklahoma can OK medical marijuana for any condition they think demands it. In Missouri, physicians can certify use only for certain conditions such as cancer or epilepsy.
While hundreds of people have paid application fees for business licenses to be part of the medical marijuana industry in Missouri, they can’t get the application until early June, and the state won’t start accepting them until August. The application will include dozens of questions about potential license holders’ business plans, histories and horticultural experience.
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