Recommendations from DOH Biannual Medical Marijuana Report

The New Jersey Department of Health’s recent biannual report recommended ways to improve the New Jersey’s Medical Marijuana Program in three key areas.

The New Jersey Compassionate Use Medical Marijuana Act (“Act”) requires New Jersey’s Department of Health (“DOH”) to report to the Governor and the Legislature on a biennial basis regarding three factors: (1) whether the maximum amount of medical marijuana allowed pursuant to the Act is sufficient to meet the needs of qualified patients; (2) whether any alternative treatment center (“ATC”) has charged excessive prices for the marijuana that the center dispensed; and (3) whether there are sufficient numbers of alternative treatment centers to meet the needs of qualified patients. Below is a brief summary of the recommendations in the DOH’s April 1, 2019 report (“Report”).

1. Ounce Limit Needs to Be Raised

In evaluating the issue of whether the monthly 2 ounce limit (that has to be re-certified every 90 days) meets patients needs, the DOH found that this limit should increase over time and be eliminated entirely for terminal patients. The DOH found that many qualifying conditions are severe and patients needs may increase or decrease over time depending on the progression of the disease or treatment. As a result, the Report found that a 2 ounce limit may be limiting the ability of some chronic patients to obtain needed relief. The Report noted that across the entire NJ patient population the average monthly purchase is about half ounce (although the DOH data for purchases in any given month show that purchase amounts by patients was just over an ounce). In comparison, in Colorado, where medicinal marijuana is also less costly, the average monthly purchase per patient was 1.291 ounces.

2. ATC prices could be cheaper

In analyzing whether prices charged by ATCs were excessive, the DOH looked at whether regulated marijuana was more costly than cannabis on the illegal market. It found that while ATC prices showed no evidence of excessive prices during the evaluation period, prices were higher than on the illegal market for roughly half the patient population. DOH also found that if patient qualified for a discount, then the price they pay is equal to or less than the illegal market prices at New Jersey’s ATCs. If patients did not qualify for a discount, however, they pay greater than illegal market prices. For example, the DOH found that 5 out of 6 of New Jersey’s ATCs charge over $100 more per ounce for whole flower than the average illegal market price. On an annual basis, in New Jersey, buying an ounce of whole flower per month without a discount could cost a patient as much as $6,000.

The report stressed that DOH is interested in keeping the medical cannabis prices below the illegal market because that “is the best way to ensure patients purchase at regulated dispensaries, under supervision of their physician, instead of via the unregulated illegal market.” It therefore recommended that “lowering prices should be an explicit policy goal of the Division of Medicinal Marijuana,” which is “best accomplished by increasing competition, access and supplying the marketplace, with more options for patients to obtain the therapy.”

3. The Number of ATCs Should Increase

The Report found that while the overall current patient demands are met, there have been shortages at every ATC. As a result, the DOH is recommending additional ATCs to meet the current demands of qualifying patients.

The DOH, however, assessed future market needs and found that the program needs to expand. It recommended, for example, expanding the program to include additional 25-50 cultivation cites. In its Report, DOH evaluated the driving distance between patients and dispensaries. It found that less than half the state is within 30 minutes of an ATC under a “best-case” drive time scenario. In other words, many patients have to travel a long time to reach an ATC. Furthermore, when the DOH compared the number of dispensaries serving NJ residents with other states it found that in New Jersey, there are 1.5 million people per open dispensary, whereas the aggregate average of population per dispensary in other states was roughly 100,000 people per dispensary. If New Jersey was at the average, the Report concluded, then the State would have 90 medical dispensaries to serve the population. Based on the dispensary population analysis and the driving analysis the Report stated that: “[t]he analysis strongly supports the need for additional dispensary sites in New Jersey.”

If you have questions about the DOH Biannual Report, the New Jersey Medical Marijuana Program, the New Jersey Compassionate Use Medical Marijuana Act, qualifying patients, provider responsibilities under the Act, qualifying conditions, or have other health law related questions please contact our office.