Medical-marijuana companies hesitate to support full legalization
Jul 12, 2017
Photo: Daniel Yi/MedMen
Adam Bierman, CEO of MedMen, which acquired grower Bloomfield Industries earlier this year. Fueled by frustration over high levels of marijuana arrests of people of color in the city, drug policy groups are launching a campaign to press for full legalization in the state through a bill that would regulate and tax marijuana like alcohol. The campaign, Start SMART New York , comes on the heels of successful legalization efforts for recreational cannabis in Maine and Massachusetts, and indications that Vermont and New Jersey may soon follow. For the groups behind the campaign, the most important economic goal is to give business opportunities to people in communities hurt by the criminalization of marijuana. Still, New York's five existing medical-marijuana companies would appear to be likely supporters of such a campaign, given its potential to broaden their customer base. But New York's current cannabis license holders have invested heavily in the medical market and are wary of losing legitimacy. "As a physician-led, patient-focused company, our sole objective is to produce high-quality medical-cannabis products for New Yorkers suffering from life-threatening and debilitating diseases like cancer, ALS and chronic pain," said Ari Hoffnung, chief executive of Vireo Health of New York, in an email Tuesday. article continues below advertisement
But Dr. Kyle Kingsley, chief executive of parent company Vireo Health, was far more candid in a conversation with Crain's shortly after Massachusetts legalized marijuana for recreational use in November. "My passion is the medical end of things, but I understand the arguments for adult use are very strong," he said. "There's little question we're spending a ton of money on enforcement actions for marijuana, and it seems very misguided to me." Kingsley added at the time that, while Vireo would not pursue a recreational license if it became available, the legalization of cannabis for recreational use would benefit the medical market as well. "Adult use changes the thermostat for folks," Kingsley said. "People become more comfortable with cannabis generally, and I like that aspect of it in the medical realm because if there's less of a stigma, ultimately it will lead to more patient access." Representatives of PharmaCannis and Etain have emphasized in conversations with Crain's that their first priority is to serve patients. But both said they would consider participating in a recreational market if the state legalizes it. "I'm all for expanding access, but I think it's still important to make sure the medical program is successful," said Hillary Peckham, chief operating officer of Etain, during a reception at the company's newest dispensary in Midtown Tuesday. "Some people are not comfortable with this as a recreational product and would only use it under medical circumstances. So we need to provide a medical-grade product for those patients." MedMen, the California company that recently acquired New York grower Bloomfield Industries, is the only company in New York that already sells cannabis for recreational use in other states. Asked whether it would support New York's proposed Marijuana Regulation and Taxation Act , MedMen replied in an email: "Currently we are very much focused on serving New York's medical-marijuana patients. On principle we support legalizing marijuana for adult use, but that's something that the state of New York must ultimately decide." Columbia Care's Massachusetts subsidiary Patriot Care came under fire from advocates for full legalization last year for employing a lobbyist who opposed their efforts. Nicholas Vita, chief executive and vice chairman of Columbia Care, which holds licenses in New York, five other states, Washington, D.C. and Puerto Rico, denied taking any position on the Massachusetts campaign for recreational use, but refused to fire the lobbyist. He did not respond to a request for comment Tuesday on legalization efforts in New York. Medical-marijuana companies have been valuable supporters of full-legalization efforts in some states where they were already more established during the campaigns, said Kris Krane, founder and president of 4Front Ventures, a national cannabis consulting firm. "They recognize that the new adult-use industry is largely going to start from the infrastructure that already exists for medical marijuana, so it's in their interest to make sure this is done the right way," he said. But, Krane added, he understands the caution prevailing in New York. "It's a fine line a lot of these groups have to toe," he said. "There are companies that may support legalization but are hesitant to say it outwardly because they are regulated by a medical program." For more health care news, subscribe to Crain's Health Pulse. Sign Up for Health Pulse
Brought to you by Crain's New York Business, Health Pulse is a subscription-only website focused on the business of health care. The site is updated every day with breaking news, research and unique information. Subscribe today and receive access to the site and the daily emails. Plus, twice a week we release a special report called Extra, featuring data and statistics.