‘Medical Marijuana is Still Critical’: Balancing Act Between Recreational, Medicinal Markets

As cannabis reform continues to make strides in the U.S. and globally, the role of medical marijuana remains a critical issue in policy discussions. Despite its foundational place in the cannabis movement, medical marijuana has often taken a backseat to adult-use legalization efforts.

Bryna Dahlin, a partner at Benesch Law and chair of the firm’s cannabis industry group, shared her insights on this topic during an interview ahead of her speaking engagement at the upcoming Benzinga Cannabis Capital Conference.

Dahlin emphasized that medical marijuana has become somewhat overshadowed by the excitement around adult-use legalization. “So many people use cannabis for stress and anxiety, as well as for fun and social activities, that they have blended into one another,” Dahlin explained.

While recreational markets generate significant revenue, she says medical marijuana continues to serve an essential purpose for patients who rely on it for conditions like chronic pain, epilepsy and PTSD.

Dahlin pointed to tax incentives as a driver for medical marijuana use in states like Illinois.

“In Illinois, a medical cannabis cardholder pays 1% tax on their purchases, whereas an adult-use customer can pay over 40% in taxes!” she said.

This stark difference in tax rates is incentivizing cannabis users to apply for medical marijuana cards, even if they primarily use the product for recreational purposes.

According to Dahlin, the future of medical marijuana will likely be driven by state-level policy rather than national initiatives, barring any changes in federal cannabis scheduling.

“I think the trend around medical cannabis will be driven locally and not on a national scale,” she said. This can already be seen in states like Illinois, where access to the medical patient market is restricted to only 55 licensed dispensaries.

This dynamic has created competition between medical and adult-use dispensaries, with some adult-use dispensaries offering discounts to medical cardholders to attract their business. “Some dispensaries, like one of my favorites — Karma Club in Lincoln Park — currently offer a 30% discount for adult-use shoppers who have a medical card. That’s great for me, but terrible for the dispensary because alleviating the tax burden for me so they can compete means they lose 30% of the revenue,” Dahlin noted.

Looking ahead, Dahlin expects the tension between medical and adult-use cannabis markets to continue, particularly as states work to balance regulatory frameworks.

The issue will likely be a hot topic in the upcoming legislative session in Illinois.

“In the last legislative session, there was some ‘drama’ around this issue, and I expect it will be a hot topic in the November veto session if a bill is up again for consideration,” Dahlin said.

As the cannabis industry evolves, the conversation around medical marijuana remains essential to shaping future regulations. At the Benzinga Cannabis Capital Conference, leaders like Dahlin will continue to explore the balance between recreational and medical cannabis, offering insight into the industry’s next steps.

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