Despite record milestone, cultivation limits prevent adequate supply and increase costs of medicine for patients

(Albuquerque) – Patient enrollment in New Mexico’s Medical Cannabis Program reached 100,021 patients as of October 31, 2020, according to data released by the New Mexico Department of Health (NMDOH). This represents an increase of 21,659 patients or 28% over October 2019 enrollment. Patients choose Ultra Health as their preferred cannabis provider 5 to 1. The operator has 21 locations statewide. 

New Mexico currently has a patient penetration rate of 6% of all adults. Enrollment in the program has substantial room to grow, as neighboring Oklahoma has a patient penetration rate of 12% of adults statewide. 

Despite reaching a record milestone, New Mexico’s medical cannabis industry continues to struggle to produce adequate supply to meet demand and lower the price of medicine due to arbitrary plant caps not found in the statute.

On November 1, 2018, then District Court Judge David K. Thomson ruled the previous NMDOH cap was arbitrary, capricious, and frustrated the purpose of the Lynn and Erin Compassionate Use Act. At the time, there were just 14,700 plants licensed for 62,889 patients equating to a ratio of less than ½ plant per patient.

As of October 31, 2020, the 34 producers licensed 51,950 plants in total, equating to only ½ plant per patient.  In comparison, neighboring Colorado licenses a full 9 plants per enrolled medical cardholder. The medical cannabis programs in Nevada, Arizona, and Oklahoma do not mandate any plant production limitations.

“After all the effort to achieve adequate supply and Judge Thomson’s order, there has been practically zero increase in available medicine per patient,” said Duke Rodriguez, CEO and President of Ultra Health®. “The program’s growth and patient demand have quickly outpaced the arbitrary increase to 1,750 plants. NMDOH now has a duty to increase plants to achieve the purpose of the Act and overall patient wellbeing.”

Furthermore, Judge Thomson wrote in the 60-page plant count ruling, “DOH has a duty/obligation to ensure patients enrolled in the Medical Cannabis Program can access an adequate supply of medical cannabis in New Mexico.”

REGIONAL ANALYSIS 

New Mexico is the only state in its region that enforces a burdensome plant count limit on cannabis producers. Neighboring Arizona, Oklahoma, as well as Nevada do not mandate any caps on cannabis cultivation. 

Colorado essentially has no plant count limit because producers utilize far less than the total plants recommended. Colorado’s medical program currently allows a maximum of 771,949 plants to serve 84,438 patients. At a minimum, Colorado approves up to 6 plants per patient and can approve up to a maximum of 99 plants per patient with a physician recommendation. Per the most recent data, an average of 326,288 plants is cultivated for medical use monthly. 

Under Colorado standards, no less than 600,000 plants would be recommended to serve New Mexico’s 100,021 patients statewide. This would require New Mexico medical cannabis operators to increase their production by 11 times to meet Colorado’s standard of care. These numbers would need to be increased further if the adult-use of cannabis were approved in New Mexico.

Insufficient cultivation limits have not only impacted access to medicine, but also the price of medical cannabis in New Mexico. The average price per gram as of June 30, 2020, was $9.89 while neighboring Colorado reports the average price per gram of medical cannabis is $2.86. The price of medicine in New Mexico has remained relatively the same over the last several years while other programs have seen steady declines in the cost of medicine.

The high price of medicine is especially concerning, as 26% of patients in the New Mexico’s program report they earn less than $20,000 annually, according to an NMDOH-commissioned survey by Research & Polling Inc. Medical cannabis patients are required to pay for their medicine out of pocket, therefore creating an excessive burden for patients to access medicine at prices they can afford. 

Increasing the plant count limit or removing arbitrary limits entirely would stimulate lower prices for medicine, improved product availability, and increased product variety for varying patient needs. 

Even Utah’s fledgling medical program has more flexible cultivation limits than New Mexico. Utah allows for 100,000 square feet per indoor cultivation licensee and nearly 175,000 square feet per licensee for outdoor cultivation to serve just 10,000 patients statewide. 

Earlier this month, lawmakers in Texas pre-filed 13 cannabis-related bills for the state’s 2021 Legislative session. Among the measures is a bill that would put legalization of cannabis for adult-use on the ballot, expand access to high-THC cannabis medicine, and allow physicians to certify cannabis to treat any condition they see fit. 

If the measures pass, Texas would join all neighboring states in having a more broad and patient-centric approach to cannabis than New Mexico. 

LEGALIZATION OUTLOOK 

As legislators contemplate the legalization of cannabis for adult use in the 2021 Legislative session, New Mexico’s medical program will need to quickly allow for more plants to be cultivated statewide to absorb patient demand and future demand from adult-use purchasers. 

At a minimum, legalization needs to lift arbitrary caps on production, permit current producers to produce more plants several months before adult-use sales commence, allow patients and adults to purchase cannabis in amounts that fit their needs, and expand licensing to allow new entrants, including microbusinesses, to enter New Mexico’s cannabis market. 

All of these initiatives will protect the medical program from running out of medicine, authorize cannabis purchasers to move into the regulated market, and bestow more opportunities for New Mexicans to engage in a new industry estimated to be valued at $800 million. 

Today, 15 states and Washington D.C. have legalized cannabis for adult-use. Arizona voters approved a legalization measure earlier this month, along with New Jersey, South Dakota, and Montana. Legalization in Arizona could be live as soon as March 2021.  

A total of 36 states have legalized cannabis for medical use, including South Dakota and Mississippi which legalized medical use via ballot measure earlier this month. 

New Mexico’s Medical Cannabis Program reported enrollment does not include newly enrolled reciprocal participants. At least 5,300 reciprocal participants have enrolled in New Mexico’s Medical Cannabis Program since July, according to the data issued by NMDOH. 

New Mexico’s total patient participation including reciprocity is at 105,021 active participants. The program is expected to support more than 110,000 patients and reciprocal participants by the end of the year.