With legalization of THC in Minnesota, what happens to the state’s medical marijuana program?

Four months ago, Minnesota allowed those on the medical marijuana program to purchase and use dried raw cannabis. In a month, it will allow those same patients to purchase and use edibles made with marijuana.

Both changes were meant to make the program more affordable and to respond to how patients use medical marijuana to treat any of the conditions covered by the program. They are also expected to increase the numbers of people using the program, some shifting from the illegal black or gray market – marijuana that is tested and approved by a state government.

Prior to March 1 when dried plant was allowed to be sold, the eight-year-old program had 26,000 people registered. As of July 7, there were just over 37,000 using the program. And the number of new or returning registrants is growing from 700 per week to 1,000 a week since March 1, said Chris Tholkes, director of the state Office of Medical Cannabis. That pace has not slowed, she said.

“At first we were telling our call center agents that maybe this will slow down after the initial interest and it just hasn’t,” Tholkes said. 

Another measurement is the number of visits to the dispensaries allowed by the state. Those visits and purchases are up significantly and Tholkes said it is being driven by dried raw cannabis purchases, though caps on amounts that could be purchased at one time could have resulted in multiple visits for the same supply.

“The extract products are exactly where they have always been or even slightly up,” she said. “It appears that people are continuing to use the extracted products which have more of an extended effect and maybe using flower as well.”

But the registrant numbers appear lower than expected by some medical marijuana advocates, blaming higher-than-expected pricing by the two providers allowed in the state and the availability of gray market marijuana coming in from nearby states that have legalized marijuana for recreational use.

“The price just didn’t come down. They didn’t come down in the way any of us expected them to,” said Maren Schroeder, the policy director and co-founder of Sensible Change Minnesota, a drug-policy reform organization.

Another expected increase in patients on the program in three weeks when edibles first become available might also be blunted by the surprise July 1 legalization of hemp-based edibles in the state. On the map of the U.S. showing states that allow recreational marijuana, Minnesota is the sole jurisdiction that permits some edibles but is not a legal recreational marijuana state. 

Program is eight years old

Minnesota’s path toward permitting medical uses of marijuana products has been circuitous. When it was finally legalized eight years ago, the limits imposed made the state an outlier. Only two growers, only eight dispensaries and just a handful of approved medical conditions resulted in just 5,000 program participants in the first year.

Gradually the list of conditions has grown with chronic pain, intractable pain and post-traumatic stress disorder being to top three conditions among state patients. 

But only last year did the Legislature approve dried cannabis to be sold and to be smoked or used for edible products. Prior to the March 1 rollout, patients could only purchase oils for vaping, creams and more-recently dissolvable mints and lozenges and Minnesota was just one of two states that banned the most-familiar way of using marijuana – by smoking it using papers or pipes.

Being able to buy flower could cut that price in half, advocates said. And based on the experience of other states that allowed smokable marijuana in the midst of their programs, patient counts were expected to triple or quadruple. That would add up to nearly 100,000 medical marijuana patients in Minnesota.

“The flower that came out is priced really high,” Schroeder said. “Patients are not wanting to spend what the two manufacturers are asking. “Their prices are nearly identical and there is no real market incentive for those prices to come down. That’s been pretty frustrating for patients.”

Schroeder said the stark increase in dispensary visits and purchases is partly explained by two factors – that the providers were capping the size of purchases in the early months because they didn’t have enough supply. That required patients to return multiple times for what they might have preferred to purchase in one visit. The other is price. Rather than buy an ounce at one time, customers might opt for an eighth of an ounce – or 3.5 grams – because that is all they could afford, she said.

An ounce of dried cannabis is selling for upwards of $480 while the same amount in a recreational state like Colorado with lots of providers and aggressive price competition is less than $200, she said. Though it is not legal to import from recreational states to Minnesota, the pricing differences could convince a patient to drive to Illinois or fly to Colorado for their marijuana.

Both providers have now lifted caps on the amounts of dried cannabis each patient can purchase at one time. Tholkes of the state medical program said supply issues are being sorted out but she said staff looked at surrounding states and found the prices to be comparable to what is being offered to Minnesota patients.

“Our products are definitely in the ballpark,” she said. “I’m hoping that overtime we will start to see the price of all the products start to come down.”

Jason Tarasek, an attorney who specializes in cannabis law, agreed with Schroeder that pricing so far is disappointing and is keeping the number of medical marijuana patients lower than expected. He said he thinks that the gray market supply of marijuana from nearby states is giving Minnesota patients a cheaper alternative.

“As more states legalize, the supply across the nation – the diverted market from adult-use states – grows,” Tarasek said. “It’s difficult to enforce. We’ve got 19 states that have legalized adult-use marijuana now. We’re reaching the tipping point where federal legalization is becoming inevitable. The stuff is everywhere.

“Medical consumers are rational actors and they’re going to make decisions based on price,” he said. 

Another disincentive in the highest-in-the-nation annual fee patients have to pay – $200 for most patients and $50 for disabled veterans and those on medical assistance. A bill to lower the fee to $40 was one of many victims of the impasse among the House, Senate and Gov. Tim Walz at the end of the regular session.

Hemp-based edibles

Last year when the Legislature approved the sale of dried cannabis flower and when the state Department of Health decided to allow edibles like gummies and chews in the medical marijuana program, neither knew what would happen this past spring. Lawmakers quietly approved the sale of edibles to the general publics as long as they are derived from industrial hemp – a cousin of cannabis – and as long as they have less than 5 mg of THC, the intoxicating chemical in hemp. Packages can only contain 50 mg total.

While the medical edible products that can be purchased starting August 1 can be 10 mg per serving and packages can contain 100 mg of THC, there is nothing to stop a customer from taking two hemp-derived edibles to achieve the same intoxication levels.

“I think it is going to help a lot of patients and make it safer,” said Schroeder, who lobbied the Legislature for the new law. “The products we legalized were already being sold all over the marketplace” but now will be subject to labeling and testing requirements as well as age limits.

Schroeder said she hopes the existence of the new hemp-derived edibles market will impact the pricing of edibles in the medical market.

It could further reduce the anticipated increase in patient counts in the state medical program.

“That is going to cut into the medical market because we have essentially legalized marijuana through food and beverages now,” Tarasek said. “People are going to probably choose to self medicate that way rather than go to the medical manufacturers.”

Tholkes said she is watching the new market but said she thinks there are reasons for a medical marijuana patient to purchase edibles like gummies through the state suppliers rather than on the new general market. That’s because the medical products are based on marijuana plants, not hemp. As such, because of the higher THC levels in marijuana, less processing is needed to extract and enhance the intoxicating effect.

Testing is more stringent for medical products.

“We approve the labs, we assure they have the correct methodology and the correct certifications, we review the certificates of analysis before we approve products for sale,” Tholkes said. “None of those things are happening with the over the counter products.”

The new edibles law does require manufacturers to submit samples to an independent testing lab to show that it meets standards set by the state Board of Pharmacy and the state board can ask for results of those tests. But the pharmacy board has fewer than two dozen staffers and since there is no licensing required, cannot easily patrol sales.

The state medical program has stated limits on chemical content while the state hemp-based edibles law says there can be no more than “trace amounts” of mold, residual solvents, pesticides, fertilizers or heavy metals in products. “That’s a subjective limit,” she said.

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“For patients who really want a guarantee of a safe product, they will come to us,” Tholkes said. She noted that Oregon, one of the first recreational marijuana states, has now banned the sale of “artificially derived cannabinoid” edibles because regulators have concerns about the chemicals used to extract and enhance the THC from hemp.

Tholkes said she expects many medical marijuana patients to try the new edibles on the general market and that price could be a factor in whether they buy edibles from the state program come Aug. 1 (when edibles are being added to the medical marijuana program) or in what quantities.

“I don’t think they would completely leave the medical program,” she said. “They value their relationship with their pharmacist and the dosing that is offered through that relationship.” Having a medical marijuana registration also provides some protection from civil and criminal liability while consuming the products bought through the program.

What is more likely is they use both paths, Tholkes said.