State’s medicinal marijuana industry has stabilized, but barriers to growth remain

New Hampshire Bulletin
Published: 7/16/2021 3:57:14 PM

The video announcement was framed like a victory address. Standing before a woodpile, Prime Alternative Treatment Center CEO Keenan Blum gave the center’s Facebook followers a breathless update: the New Hampshire medical marijuana dispensary was lowering its prices.

Prime had increased its growing capacity, bumped up its offering of cannabis strains, and reduced expenses, Blum said. 

“In short, we are now able to grow more high quality flower at a lower cost than before,” he said in the video. 

The announcement was welcome news to most of Prime’s customers – and signaled a new phase for the state’s medicinal marijuana industry.

Five years after New Hampshire’s first therapeutic cannabis dispensaries opened their doors, the number of patients in the state has climbed considerably, from just over 2,000 in 2016 to just under 12,000 in May 2021, figures from the Department of Health and Human Services show.

And two of the state’s three organizations, known as “alternative treatment centers,” are expanding on their own. In April, Prime ATC opened a dispensary in Chichester, and Temescal Wellness launched a dispensary in Keene. 

But industry officials and advocates say dispensaries in the state still face barriers to growth and trail other states with medicinal marijuana when it comes to the percentage of people in the state who are patients.

New Hampshire has just under 1 percent of its population registered as medical marijuana patients; states such as California, New Mexico, and Arizona have close to 5 percent, data from the Marijuana Policy Project, an advocacy group, shows – though all of those states have legalized cannabis for personal use. 

Among states that have not fully legalized marijuana but do allow for medicinal use, New Hampshire still lags: Florida and Pennsylvania each have around 2.6 percent, for example.

And even as prices are falling at some Granite State dispensaries, they’re still higher than neighboring states, all of which have legalized cannabis and impose lighter restrictions on their therapeutic cannabis organizations.

One Facebook user took Blum to task over the price reduction, drawing a comparison to Maine, whose medical marijuana prices are still cheaper for patients. 

“I’m sure if you asked patients we would have preferred ounces well under $300,” wrote Zach Williams. “When will patients be relieved of having to pay at or over $300 for an ounce of meds?”

Cannabis advocates say the question of price encapsulates the crossroads New Hampshire’s industry has reached. Since 2016, dispensaries have built up nonprofit businesses, survived start-up woes, attracted loyal customers, and multiplied their growing and distributing capacities. But they still are a long way from their ultimate goal: a normalized, widely known medical service. 

“I still run into so many people who, I tell them what I do for work and they have no idea cannabis is even in New Hampshire,” said Sian Leininger, the director of retail for Temescal Wellness. 

Currently, New Hampshire’s therapeutic cannabis law allows people who suffer from a number of conditions, including ALS, Alzheimer’s, epilepsy, chronic pain, post-traumatic stress disorder, Crohn’s disease, and others to apply to become a qualifying patient. Patients must be diagnosed by a medical provider in order to receive a registry ID card; those who do may use that card at one of the state’s dispensaries. 

For the dispensaries, participation and business has grown considerably since therapeutic cannabis was first legalized in 2013. Some of that has been a result of state policy. A decision by lawmakers to expand the program to chronic pain patients in 2017 led to a near doubling of patients within a year – from 3,493 in 2017 to 6,480 in 2018, according to DHHS. 

But the growth has also come from the organizations themselves, expanding their facilities and growing operations over five years after enduring high entry costs. Now that the number of customers has increased, some of those costs have been mitigated just recently. 

“We have a few thousand patients, and it’s certainly easier to balance the books when you have a few thousand patients than when you have 1,000 (or) 500, which was the case not that long ago,” said Matt Simon, the newly appointed director of public and government relations for Prime ATC.

Therapeutic cannabis facilities have had to rely on debt in order to grow, in part due to the money-raising limitations of their nonprofit status, which the state mandates. 

“It’s been a slow and gradual process of trying to make this program really viable and workable for patients,” Simon said. “. . . There were a lot of startup costs involved and not a big base of patients to actually sell cannabis to get money coming in, so it was difficult.”

Leininger agreed. 

“It is an extremely capital intensive industry, so getting started is always a challenge,” she said. 

While the number of patients in the state initially surged year after year – climbing from 2,089 in 2016 to 6,480 in 2018 to 10,688 in 2020 – that annual bump has started to slow. During the pandemic, the state added 1,260 patients from June 2020 to May 2021 – half the number of previous years. 

Still, as the industry begins to stabilize, barriers to access remain, providers say. Insurers in New Hampshire, like other states, don’t cover the use of therapeutic cannabis, and federal laws against cannabis prohibit Medicaid from covering it as well. 

“That’s kind of a common frustration for patients: that their insurance won’t cover this but it will cover other medications that may give them a lot more harmful side effects,” Leininger said. 

The alternative treatment centers in New Hampshire have financial aid programs for patients, offering discounts for compassionate care. 

“We all want to be able to get our patients prices that, you know, they can afford,” Leininger said. 

Simon, who has also worked as the New England political director for the Marijuana Policy Project, added that pricing has long been a concern for the industry

“Relative to other states. I think we still have a ways to go on that front,” he said. “We’re doing everything we can, but we’ve got bills to pay and have to maintain viability as a business.” 

Leininger and others at Temescal are also wary of enticements across state lines. Billboards have appeared near the borders urging New Hampshire residents to travel to Maine and Massachusetts to buy the cannabis. “Patients definitely are going out of state,” she said. Keeping the loyalty of in-state customers is a continual challenge. 

And stakeholders are eyeing a series of bills heading to Gov. Chris Sununu’s desk this year that could affect the industry’s ability to expand. 

Some would broaden who can access therapeutic cannabis. House Bill 605 would allow those with opioid use disorder to qualify for cannabis, and allow people from out of state to buy from the dispensaries. 

Another, Senate Bill 162, would in part permit in-state patients to buy from any dispensary they want; current law requires that a patient designate a specific center and stick to it. The proposed change, which received a 24-0 vote in the Senate, would make a difference for organizations like Temescal, whose centers range from Lebanon to Dover. 

Sununu, who has taken a strong stand against legalizing marijuana for recreational use, has given mixed support for the expansion of therapeutic cannabis in recent years.

The governor approved a major extension of the program in 2017 by allowing chronic pain patients to qualify – one year after the program had taken off. That effort had been touted by cannabis advocates as a way to steer pain patients away from opioids. 

And Sununu signed a bill in May, House Bill 89, that made autism spectrum disorder a qualifying condition for therapeutic cannabis, and also made moderate to severe insomnia a qualifying symptom when paired with an underlying condition. 

But Sununu has also vetoed other initiatives supported by the industry, such as a proposal to allow medical marijuana patients to grow the plants at home. 

And in 2019, he killed an effort to allow alternative treatment centers to register with the state as for-profit businesses, arguing that the move would allow for over-commercialization of therapeutic cannabis.

“This would incentivize out-of-state special interests to acquire equity in New Hampshire ATCs,” Sununu said during his veto message then. “Although I remain supportive of medical marijuana, this bill would represent too great of a step towards the dangerous path of industrial commercialization of the marijuana industry in New Hampshire.” 

Leininger sees it in a different light: as a financial lifeline and path to growth. 

“As a business with such capital expenses, it makes it really challenging because we can only raise debt, and so we have this business that costs quite a bit to run, and we don’t get the same tax breaks as a regular nonprofit because of the federal status of cannabis,” she said. 

This year, that bill has returned with a higher likelihood of passage. Senate Bill 38 passed the Senate, 18-6, and the House by voice vote in the spring, giving it a potential veto-proof majority. 

Even as New Hampshire is increasingly isolated on the question of marijuana legalization – the state is the last holdout in New England – Simon has remained optimistic about the status of therapeutic cannabis. 

“It’s been very challenging for all three of the ATCs in New Hampshire, but we see a lot of good signs that things are moving in a good direction,” he said.




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