Is New York's Medical Marijuana Doomed to Burn Out?

by / Jul. 6, 2015 8am EST

The recent buzz on New York’s medical marijuana (MMJ) program is that the five winners in the race to be at the forefront of the state’s soon-to-be-burgeoning cannabusiness could be announced sometime this month. That’s not the only relevant news that will drop later this month: Expect July’s campaign finance and lobbyist filings to reveal heavy horse-trading.

(An aside: We learned last month that some applications to the state’s MMJ program were about the size and weight of a mountain gorilla. Unless they’ve magically found a room of underused civil servants or have an outside company—say, a law firm—combing through boxes upon boxes of material from all 43 entities seeking a license, it further strains the imagination that this could have ever been a fair process.)

Leading the way appears to be Compassionate Care Center of New York, which, the Buffalo News reports, has picked a site on the Amherst/Clarence border to serve as its Western New York dispensary. So you can add them to the list: There are now 12 companies with designs on a Western New York dispensary and/or grow operation.

Not only have CCCNY locked on to a local site, they announced on their website that they’ve obtained “exclusive license in New York State to two globally renowned and highly effective proprietary strains for the treatment of pediatric epilepsy the world” [sic], and partnerships with MMJ facilities in Canada and Israel.

There’s been some heavy prospecting on MMJ’s economic impact to the state; some companies have recorded SEC filings well into the millions as they assemble their investors. A windfall is expected. One business with existing farms in the Utica and Binghamton areas, as well as on Long Island, expects to open a facility with “100 people making in excess of $100,000 a year.” If Brightwaters Farms expects to pay over $10 million in salaries annually, just imagine what their gross sales projections are.

Meanwhile, on Monday the New York Post reported that Dean Petkanas, perhaps better known as “the Wolf of Wall Street,” is part of the ownership group of KannaLife Sciences, which is planning an astounding 700-acre grow site in Buffalo. 

But there’s a major buzzkill wafting in from the Midwest. The MMJ program in Illinois is faltering:

“Only about 100 more patients have been cleared in the past month to access medical pot, raising the statewide total to about 2,600, the Illinois Department of Public Health reported Wednesday.

About 22,600 people have signed up on the state’s website to obtain medical marijuana, but only 3,200 have completed the application. The state law requires patients to submit fingerprints for criminal background checks and to get a doctor’s recommendation, which some patients say has been difficult.


“It’s a huge, huge problem,” said Michael Mayes, CEO of Chicago-based MMJ consultancy Quantum 9. “With the lack of patients into the registry, businesses will suffer greatly…and may even go out of business due to the lack of a market. If all the cultivation centers have all this product, the supply goes way up, and if demand is so low, there’ll be pricing wars.”

Retailers are praying for a surge in patient applications once product is available in dispensaries come November, but you can’t blame investors for losing their religion over the early trickle. After all, governments like Illinois and New York are creating a bureaucratic system of licenses and physicians for which the consumer must foot the bill. Add to that the fact that dispensary marijuana isn’t necessarily cheaper for all the hassle involved and it just may be that self-medicators in Illinois are resolved to maintain the black market status quo.

To rectify the industry’s slow progress, Illinois is exploring an expansion of the approved list of medical ailments, which currently numbers more than 40 and includes such diagnoses as PTSD, fibromyalgia, dystonia, and migraine. And Illinois is allowing the drug to be sold in smokable form, whereas New York is not. The New York list of 10 qualifying conditions is obviously far more restrictive: ALS, cancer, epilepsy, HIV/AIDS, Huntington’s disease, inflammatory bowel disease, Parkinson’s Disease, multiple sclerosis, neuropathies, and spinal cord damage.

Without access to data showing how many New Yorkers suffer from the above diseases, it doesn’t seem crazy to wonder whether there will be enough patients willing to navigate the system to satisfy the massive investment the state requires of those seeking licenses. The 43 companies that have applied all had to fork over $210,000 and provide proof they either own or have leased a facility that could produce and dispense non-smokable product by January.

The big money is on, and in incremental steps to recreational legalization.