Copyright © 2019 Albuquerque Journal
SANTA FE – Nicole Tesch is a single mother whose 3-year-old daughter was diagnosed with a rare form of epilepsy just days after being born.
Tesch, a Los Lunas resident, said she’s unable to work due to her daughter’s medical condition and spends a big chunk of her income – from disability benefits and other types of financial aid – on marijuana-derived products for her daughter.
In particular, cannabidiol oil, a non-intoxicating extract more commonly known as CBD oil, has been the only effective medicine in reducing the frequency of the seizures, she said.
Her daughter was previously on seven different pharmaceutical drugs, but is now down to just one.
However, unlike opioids, which are often prescribed and covered by government and private health care insurance, medical cannabis and CBD products must be paid for out-of-pocket.
A 2-ounce bottle of CBD oil that typically lasts for about a month-and-a-half costs $300, Tesch said. She also occasionally uses a topical CBD cream to ease her daughter’s pain.
“For me, that’s a lot of money,” she said.
Other New Mexicans have similar stories.
One Las Vegas area man said he recently had to put his house on the market due to the high cost of medical cannabis products for his adult son, who suffers from frequent seizures.
“My money is gone,” he told the Journal. “I was debt-free until all this started.”
“I think the least the state could do is pay for the medicine,” he added.
The questions about the financial burden on New Mexicans who use marijuana-derived products for medicinal purposes, and whether government funds should help offset their costs, are being prompted in large part by the increasing prevalence of medical cannabis in a state with one of the nation’s highest poverty rates.
Enrollment in New Mexico’s medical cannabis program – launched in 2007 – has skyrocketed in recent years and nearly one out of every 25 state residents now participates in the program. There were more than 78,000 active patients around the state as of last month, compared to 48,861 in September 2017.
And even more people could sign up in the coming years, since Gov. Michelle Lujan Grisham’s administration approved six new qualifying conditions earlier this year, bringing the total number of conditions to 28.
In addition, a state judge ruled in August that the program should be opened to out-of-state residents due to recent legislative changes to the state’s medical cannabis laws.
New Mexico Human Services Secretary Dr. David Scrase said he’s aware of a growing number of studies that show the medical value of cannabinoids, a group of various compounds found in marijuana.
But getting medical cannabis covered by Medicaid is problematic, Scrase said, since the U.S. Drug Enforcement Administration classifies marijuana as a Schedule 1 drug – in the same category of drugs like heroin and ecstasy – and describes it as having “no currently accepted medical use.”
“We couldn’t draw down any federal match to cover medical cannabis products,” Scrase told the Journal.
He said the state would likely have to request a federal waiver to its Medicaid program in order to cover medical cannabis costs. And there might not currently be the appetite among policy-makers to do so, Scrase said.
“I think the only option we have is to pay for it purely with state funds,” Scrase said.
At least one prominent figure in the state’s medical cannabis landscape thinks the state should do just that, starting immediately.
Duke Rodriguez, the president and CEO of Ultra Health LLC, among the largest of the state’s 35 medical cannabis producers, said a 1994 state law that set up a statewide managed care system for Medicaid recipients requires that the state provide access for medically necessary services.
While no states have to date used their Medicaid programs to pay for low-income patients’ medical cannabis, Rodriguez said Germany covers medical marijuana costs and other countries offer it through government-run pharmacies.
“Somebody is going to do it, and there’s no reason New Mexico shouldn’t take leadership on this issue,” he said in an interview.
Rodriguez, who is also a former state Cabinet secretary and a card-carrying member of New Mexico’s medical cannabis program, said that while he believes the state could make the policy change now, it might ultimately require action from the Legislature or a court challenge to do so.
“I think it’s going to happen in a statewide fashion,” he said.
Big business in NM
It’s no secret that medical cannabis in New Mexico is a booming industry.
Licensed producers statewide reported a total of $106 million in patient sales in 2018 and that number is likely to increase this year, according to figures provided to the Journal.
Meanwhile, Rodriguez said state records indicate that between 26% to 52% of those enrolled in the state’s medical cannabis program – or between 21,000 to 41,000 individuals – are covered by Medicaid.
That means covering their out-of-pocket medical marijuana expenses would likely have cost the state between $27 million to $55 million last year.
A spokeswoman for the state Department of Health, which runs the medical cannabis program, said the agency is actively seeking to find ways to reduce the cost burden on enrolled patients.
Low-income patients do not currently have to pay a fee to obtain a personal production license and the DOH recently lowered the plant fee for licensed medical cannabis producers, which could lead to cost savings being passed along to customers, agency spokeswoman Mari Anixter said.
The department has also encouraged licensed medical cannabis producers and the New Mexico Cannabis Chamber of Commerce to donate to low-income patients in an attempt to reduce the financial burden.
“However, DOH recognizes that responding to urgent problems is not a systemic solution,” Anixter said.
She said the federal government’s stance on cannabis leaves New Mexico and other states with few options.
“Despite all our efforts, the cost of the medicine must be carried by the qualified patient, because it is a Schedule 1 drug which results in the inability of prescription insurance programs to help pay for medical cannabis,” Anixter said.
A hazy future
Another factor that could impact New Mexico’s medical cannabis program is the possible legalization of recreational marijuana use, an issue that Lujan Grisham has indicated will be on the agenda of the upcoming 30-day legislative session.
One of the recommendations proposed by a cannabis legalization working group created by the first-term Democratic governor is to use some revenue generated by recreational cannabis sales to eliminate the gross receipts tax on medical marijuana products and create a new low-income patient assistance fund.
Under the working group’s proposal, $2.7 million would be earmarked for patient subsidies, which would only be available for individuals who qualify for Medicaid or other public assistance programs.
However, some say that would not go nearly far enough.
Specifically, Rodriguez said the recommendation would be a positive step but would only represent a “drop in the bucket” when it comes to the current cost burden on low-income patients.
Those struggling to pay for marijuana-derived products for family members are hoping for the day when CBD oil – and other cannabis products – are treated similarly to pain relievers like codeine and oxycodone, that can pose severe addiction risks.
“I don’t understand why it’s not prescribed,” Tesch said of her daughter’s daily hemp-derived medication. “These are things that should be covered.”
Illinois marijuana law aims to undo harm of war on the drug
- FILE – In this June 25, 2019 file photo, Gov. J. B. Pritzker holds a bill that legalizes adult-use cannabis in the state of Illinois accompanied by state Rep. Kelly Cassidy, left, and state Sen. Toi Hutchinson, right, in Chicago. Illinois becomes the 11th to legalize the adult-use of recreational marijuana. Like in other states before it, advocates of legalizing recreational marijuana use in Illinois want the law to look backward as well as forward. It conscientiously attempts to ensure that those who profit from growing and selling the weed have substantial representation from the mostly impoverished neighborhoods nailed the hardest by decades of drug crackdowns. less FILE – In this June 25, 2019 file photo, Gov. J. B. Pritzker holds a bill that legalizes adult-use cannabis in the state of Illinois accompanied by state Rep. Kelly Cassidy, left, and state Sen. Toi Hutchinson, … more Photo: Amr Alfiky, AP
Image 1 of 5
FILE – In this June 25, 2019 file photo, Gov. J. B. Pritzker holds a bill that legalizes adult-use cannabis in the state of Illinois accompanied by state Rep. Kelly Cassidy, left, and state Sen. Toi Hutchinson, right, in Chicago. Illinois becomes the 11th to legalize the adult-use of recreational marijuana. Like in other states before it, advocates of legalizing recreational marijuana use in Illinois want the law to look backward as well as forward. It conscientiously attempts to ensure that those who profit from growing and selling the weed have substantial representation from the mostly impoverished neighborhoods nailed the hardest by decades of drug crackdowns. less FILE – In this June 25, 2019 file photo, Gov. J. B. Pritzker holds a bill that legalizes adult-use cannabis in the state of Illinois accompanied by state Rep. Kelly Cassidy, left, and state Sen. Toi Hutchinson, … more Photo: Amr Alfiky, AP
Illinois marijuana law aims to undo harm of war on the drug
1 / 5
Back to Gallery
SPRINGFIELD, Ill. (AP) — When lawmakers crafted the law legalizing marijuana in Illinois, they tried to make sure it would right what many see as past wrongs linked to the drug.
In addition to expunging hundreds of thousands of criminal records for marijuana arrests and convictions, the law’s architects added provisions meant to benefit communities that have been the most adversely affected by law enforcement’s efforts to combat the drug.
The so-called social equity provisions are expected to help black applicants, in particular, as blacks are nearly four times as likely as whites to be arrested for marijuana, the American Civil Liberties Union found. The law, which takes effect Jan. 1, also established ways for qualified applicants to pay lower licensing fees and get business loans and technical assistance. And it earmarked part of marijuana sales revenue for neighborhood development grants.
“On the surface, its tone and what it’s trying to do is ahead of any state that’s done this. They’re really setting off in the right way,” said Kayvan Khalatbari, a board member of Minority Cannabis Business Association, which has composed model laws outlining social equity programs. He added that follow-through will be key: “We can’t just set this in motion and set it free.”
Companies that apply for a license to sell marijuana will be judged on a 250-point scale, and those that qualify as social equity applicants will get a 50-point bump.
There are three ways to qualify. First, the organization applying must be majority-owned by a person who has lived at least five of the past 10 years in an impoverished area where there have been higher-than-average numbers of marijuana arrests. Second, the majority owner or an immediate family member must have an arrest or conviction of a marijuana offense eligible for expungement. Finally, for a company with at least 10 employees, more than half must qualify in one of the first two ways.
Illinois is the 11th state to legalize recreational marijuana. Cannabis sales could generate $250 million for the state by 2022 and $375 million in 2024, according to the state Revenue Department. Campaigning on legalization last year, Democratic Gov. J.B. Pritzker predicted the industry could eventually bring in up to $1 billion in annual revenue.
Other states that legalized pot established equity programs, but none has distinguished itself yet. Massachusetts has one, but all but two of its 184 licenses to sell pot were issued to white operators. California created a $10 million fund to go toward helping social equity applicants finance marijuana startups, but critics derided the amount as paltry.
The legalization ballot question that Michigan voters approved last fall requires the state to “positively impact” damage done by anti-marijuana law enforcement, but such vague parameters leave a lot to bureaucratic interpretation, though officials announced in July that dispensary-operator licenses would cost up to 60% less for qualified equity applicants.
No one knows how many Illinois applicants will pursue social equity licenses. There was no intention to set a quota, said state Rep. Kelly Cassidy, one of two Chicago Democrats who led efforts to write Illinois’ law. But after May 1, when licenses from the first pool of equity applicants will be awarded, licensing will pause to allow for an independent review of social equity participation.
Anton Seals Jr. plans to be a social equity applicant. The co-founder of the nonprofit Grow Greater Englewood attempts to turn the Chicago neighborhood’s abandoned lots into urban farms. He plans to apply for his company OURS, for Organic Urban Revitalization Solutions.
“It makes total sense for those of us, in particular, who have been doing work in the community to transform and to revive and restore spaces that have been impacted by poor public policy,” Seals said. “Groups like mine … should have a really fair shot to get into this industry, to compete.”
Critical are low-interest loans from what proponents estimate will be a $30 million fund to jump-start social equity operations. What held back underserved applicants in other states is that they “didn’t have the capital and they didn’t have the acumen,” said Khalatbari, of the Minority Cannabis Business Association.
The money will come from medical cannabis operators, which, because they’re established, get the first crack at the recreational licenses being awarded this fall. It’s not cheap. A dispensing-outlet license requires a contribution of up to $100,000 to the loan fund, based on recent sales. A cultivator pays up to $750,000.
Some are skeptical it will be enough. Willie “J.R.” Fleming, director of the Chicago Anti-Eviction Campaign and a hopeful social-equity applicant, helped organize the nonprofit Hemp in the Hood to ask established marijuana companies “to share their wealth.”
“Not always in cash, but in resources,” Fleming said, suggesting they share lawyers, accountants, security consultants and more with equity applicants because they got a jump on the market — and because, Fleming adds, they don’t want to be on the wrong side of minority empowerment.
The Rev. Ira Acree, who ministers in Chicago’s large west-side neighborhood of Austin, is unconvinced about the social equity provision, calling it a way “to give cover to the government.”
“It’s not workable. People’s lives have been destroyed. Financial records are non-existent,” Acree said. “People who have the ability or the interest from our community can’t compete with the big boys who have accountants and attorneys and A-1 credit. They don’t have the resources or the credit or the connections.”
AP researcher Jennifer Farrar in New York contributed