Assembly Republicans’ limited medical marijuana legalization proposal poses several concerns related to cost, accessibility and potential conflicts with the federal government that lawmakers should consider, policy experts told the Wisconsin Examiner.
The proposal by Assembly Republicans would create the Office of Medical Cannabis Regulation in the Department of Health Services. The office which would maintain a registry of patients and caregivers who could purchase medical cannabis products from one of five state-run dispensaries. Access would be limited to patients with certain medical conditions, and available products would include oils, edibles and pills but exclude anything smokeable.
The bill has been received critically by Senate Republicans, who have brought up concerns about the state-run dispensaries and expansion of government that would result. Nevertheless, Assembly Speaker Robin Vos (R-Rochester) has said that the Assembly will move forward with the bill.
“I don’t really want to amend or to change a bill based on what somebody thinks… could happen,” Vos said last week during a press conference. “I’ve tried that before, usually unsuccessfully, which is why I want to get a bill through the Assembly where we can get the votes to be able to show that we support the concept and then let the Senate act as it will.”
Vos said the Assembly will likely vote on the bill in February.
Minnesota’s restrictive program
Ahead of unveiling of the medical cannabis proposal, Vos said it was probably “the most restrictive version in the entire country,” and said that much of it was influenced by Minnesota’s medical cannabis program.
Minnesota cannabis policy experts Leili Fatehi of Blunt Strategies and Maren Schroeder of High Level Strategies told the Wisconsin Examiner in interviews that some of the policies included in the Wisconsin proposal drove up costs and made access more difficult in Minnesota.
“Minnesota had one of the most restrictive and expensive medical cannabis programs in the country,” Fatehi told the Wisconsin Examiner. She said that the program was passed in 2014 under former Minnesota governor Mark Dayton, a Democrat who was not a big supporter of cannabis in general — one reason the program started with more restrictions than it has now.
Minnesota’s medical marijuana law has been amended several times in following years to loosen some of its restrictions and modify certain features of the program. The state legalized marijuana for recreational use in spring of 2023.
Similar to Minnesota’s program, Wisconsin patients would be required to verify their medical condition with a prescriber and then apply to be on the state’s patient registry. Access under the Wisconsin bill would be limited to patients with certain medical conditions including cancer, epilepsy, HIV or AIDS, glaucoma, post-traumatic stress disorder, severe chronic pain, severe muscle spasms, severe chronic nausea, multiple sclerosis, inflammatory bowel disease and terminal illness with a life expectancy of less than one year. According to the cosponsorship memo, additional conditions could be added under future legislation.
Fatehi said that having a patient registry is important for many reasons and that advocates of recreational adult use in Minnesota still thought it important to have a robust medical program. Those reasons include having information about medical users so patients can receive a suggested course of treatment and to make sure manufacturers are producing enough supply to meet demand.
“Having a program that ensures that the additional needs that patients have by virtue of the fact that they are ill… is all very, very important,” Fatehi said. “But if you are creating a system that is either so restrictive or structured in a way that results in the ultimate product being very expensive or difficult to get, you are basically leaving patients with little choice but to go to the illicit marketplace to purchase their cannabis, and that places a vulnerable population at greater risk of unsafe products.”
State-run dispensaries would be first in nation
If the proposal were to become law, Wisconsin would become the first state in the country to operate its own medical cannabis dispensaries. The provision has presented the biggest concern for the Senate, with Senate Majority Leader Devin LeMahieu calling it a “nonstarter” for much of his caucus.
In their cosponsorship memo, Assembly Republicans said they would create state-run medical cannabis dispensaries because they wanted a program that would “work for Wisconsin.” They said they engaged in an “extensive analysis” of medical cannabis programs in the 38 states that have them and discarded “policies that have led to widespread abuse of medical programs.”
Rosanna Smart, an economist and codirector of the RAND Drug Policy Research Center, said state-run dispensaries would have the potential to conflict with federal law — a likely reason that other states haven’t adopted that approach.
Marijuana, despite growing state legalization, is still illegal on a federal level. It is classified as a Schedule I controlled substance under the federal Controlled Substances Act, which classifies it as a drug with no accepted medical use and a high potential for abuse.
“Given cannabis’ status at the federal level, having the states explicitly involved in the operations of dispensaries does create potential concerns that should the federal administration decide to crack down on cannabis, the state will be running afoul of that,” Smart said. “So that has historically been why states have opted not to do what Wisconsin is proposing to do.”
Smart said that in the past there were concerns about even the state licensure of dispensaries due to the federal status. She said that New Mexico, which passed its medical marijuana program in 2007, delayed licensing until 2009 when officials felt the federal government had more of a “nonenforcement policy.”
“Now, a lot of states license dispensaries,” Smart said. “There has kind of again been continued renewal of this federal nonenforcement policy toward medical cannabis programs that are operating kind of within some reasonable bounds, but if you have a change in the administration, there’s still uncertainty.”
Smart said that theoretically Wisconsin would have more control over prices and be able to closely monitor products, but having state-run dispensaries could also affect the cost of medical cannabis products for patients.
Because Republicans have said the state will not seek to make tax revenue from the program, “the price of medical cannabis to the patient should be quite low,” Smart said. “The flip side of this is, to my knowledge Wisconsin’s state government doesn’t have a ton of expertise in terms of operating a cannabis dispensary, and so they may have more costs associated with running dispensaries than a private entity. Those costs will, in theory, get passed on to the patients.”
Schroeder of High Level Strategies said that patient access to medical cannabis dispensaries has posed some of the biggest challenges in Minnesota, which currently allows 15 dispensaries statewide.
“That created barriers, especially in rural areas, which is certainly going to happen in Wisconsin with the proposal of five,” Schroeder said. “Wisconsin is a geographically smaller state, but we had more than three times that number, and even when we started out, we started out with eight, and that was hugely problematic.”
Smart said that five dispensaries was a relatively small number for a medical program. Iowa, with a smaller population than Wisconsin, also allows for five dispensaries in its program, she noted.
The growing and processing in the program
While the state of Wisconsin would run the dispensaries, growing and processing would be left up to the private industry.
The Department of Agriculture, Trade and Consumer Protection (DATCP) would be responsible for overseeing and regulating the growing of cannabis as well as the processing and testing of products. Cannabis growers and processes would be private and licensed by DATCP.
Smart said the state’s lack of experience in the cannabis business is likely why the bill’s authors opt for Wisconsin to do “private contracting with the growers and the processors, who certainly can do that more efficiently than the state government could.”
Schroeder said that separating processing and retail from cultivation could reduce costs by protecting the state from vertical integration — a company controlling the entire process. On the other hand, she noted, making cultivation and processing both private could enable businesses to charge the state whatever they want for the products.
“Minnesota took a stab at controlling that,” Schroeder said, with language that said medical manufacturers “can’t make giant profits.” Despite that, she said, Minnesota’s two medical cannabis manufacturers bulked up their expenses, which in turn drove up the prices, especially once the companies became multi-state operators.
Provisions in the Wisconsin bill could protect against multi-state operators. To qualify for a grower or processor license an applicant or 80% of a company’s principal officers or board members would be required to be residents of Wisconsin.
Smart said a provision that would limit licensing to one processor until the program reaches a certain size could also drive up the cost.
Under the bill, DATCP would only be able to license and contract with one processor until there are at least 50,000 patients included in the registry, “after which DATCP may license and contract with as many processors as necessary to process an adequate supply of medical cannabis products to meet the demand of patients in this state.” The processor would be allowed to contract with subcontractors to provide its services, but each subcontractor would need to obtain a separate license.
Smart said having one processor in the state could create a monopoly. She said questions such as how prices would be set and how the government would negotiate prices might be worked out in the regulation process. “Otherwise you could imagine that processor taking quite a bit of profit, quite a bit of rent,” she said.
Another alternative could be requiring the processor to be a not-for-profit entity, Smart suggested. Still, “Having one processor is a vulnerability in your supply chain, potentially, and certainly has the potential to create monopoly power on the processing side of things,” she added.
Smart also questioned how lawmakers came up with a threshold of 50,000 patients before authorizing more than one processor. That is much larger than the number of people registered in other states’ medical programs.
Iowa currently has about 18,000 registered patients, and Minnesota has only 44,000 patients in its program currently.
Lack of raw flower
Limitations in the permitted types of products could also increase the cost to consumers, policy experts said. The Wisconsin program would allow for concentrates, oils, tinctures, edibles, pills, topical forms, gels, creams, vapors, patches, liquids or forms administered by a nebulizer, but not smokable product — also known as raw cannabis flower.
When Minnesota’s medical program started, raw flower was not allowed. Schroeder said that drove up the cost of products patients could purchase and excluded some from being able to access their preferred product.
“It is significantly cheaper to produce raw cannabis to the shelf, and many patients prefer it, frankly,” Schroeder said.
Some patients prefer inhalable products, Schroeder said, because they are faster than other products such as edibles, which can be especially important for patients with pain and spasms. Before raw cannabis was legal, the main inhalable form was vaporized oil, which is typically more expensive. It is also more potent than some patients want, she said.
“When you’re talking about vaporized oil, you’re talking about an extract that is concentrated at a higher percentage of THC versus your flower, which is going to run you average 20% THC,” Schroeder said. Raw flower cannabis is less concentrated and preferable for patients who find the vaporized oil too strong, she said.
It wasn’t until after several years of advocacy from patients and others that those products were added to the program in 2021.
Schroeder said Minnesota got a bump in patients when smokable products became available, and that prices weren’t great, but were better. She said products were more affordable for patients and accessible for patients.
Schroeder recommended that lawmakers discussing a potential program speak with patients as well as legislators in other states, including Minnesota, Michigan and Illinois to gain perspective on the issue.
“When patients are looking at this bill, I’m looking at the opportunity to have safe access,” Schroeder said. “They need to know that in that sort of restricted model, we’re going to have access, but it’s going to be expensive access, and they’re going to find really quickly that it’s not really access. That’s what we found here.”
She added, “I was always an advocate to say, ‘Well, at least something is better than nothing; we can build off of it.’ But Wisconsin, with the proposal as it is on the table, is going to be building for a long time.”
GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX
Rosanna Smart, an economist with RAND, said state-run dispensaries would have the potential to conflict with federal law. Read More
