Monday, November 15, 2010

Writing Arizona's Medical Marijuana Program

As soon as the election is certified, the Arizona Department of Health Services has 120 days to write the rules for Arizona's medical marijuana program. We need to get it right like New Mexico, not fall into the problems California has.

Every time I complain about medical marijuana prices, someone jumps me saying their helping patients. But their not, they’re drug dealers and it’s time we say that..

Truth is, it costs very little to grow marijuana. According to the Rand Drug Policy Research Center who says a well-run 5’ x 5’ hydroponic indoor grow producing 4 harvests per year might yield 10.5 pounds per year with tangible costs of $225 per pound--$75 per pound for electricity and the remaining $150 per pound for other factors. That works out to $14.06 an ounce.

When I checked prices at the Kind Connection Collective in Needles California just across the river from where I live. The retail price of medical marijuana was between $5440 and $8960 a pound. This is what we need to prevent in Arizona.

By law in California and Arizona the plants belong to the patients. These so called collectives take plants that belong to the patients, and sell them back to the patients for as much as $8960.00 a pound. I don’t know about you, but I think something is wrong with that.

It’s time we call drug dealers, drug dealers. I’m sorry, but the only people who can afford medical marijuana are people who are working, not the sick and disabled who need it.

The vast majority of patients needing medical marijuana can not afford it, so much for compassion in California’s Compassionate Use Act. It would cost more than people on disability receive for the medical marijuana they need.

Most people on disability only make around $1000 a month. At Needles California prices, the allowable 2.5 ounces every 14 days in Arizona would cost between $1700 and $2800 a month.

We need to look at New Mexico and Canada’s medical marijuana programs. In New Mexico two of the licensed dispensaries are providing medical marijuana to patients at less than $10 per gram, one for $4/gram ($114/ounce) and one for $5/gram ($142.50/ounce).

When I complain about medical marijuana prices, a lot of angry people attack me saying they need to charge these prices because they might get arrested.

True marijuana is still illegal under federal law, but out of the thousands of dispensaries and collectives very few get raided by DEA. Those are the ones making enormous profits, and under California and Arizona law, you can not profit from medical marijuana.

Dispensary prices vs. street prices. The cost of medical marijuana should have nothing to do with the street price of marijuana. The morphine I take costs .50 cents a pill at the pharmacy, yet it’s worth $15-$20 a pill on the street, so my prescription is worth $1800-$2400. Like medical marijuana, the only people who sell morphine to people in pain for $15-$20 a pill, are drug dealers.

The people who complain the most when I write about the enormous profits made by dispensaries and collectives are the people making all the money. Please someone tell me how a simple to grow plant can be worth almost $9000 a pound.


  1. I understand the point you're trying to make here, but your flippant dismissal of less-restricted systems like the one in California is more than a little off-base.

    First of all, there are many dispensaries and co-op programs that, as a matter of policy, do in fact provide medicine to patients who cannot afford it at little or no cost. In fact, the retail prices they charge to walk-ins and customers of means take those hardship assistance programs into account so that retailers can help out the disadvantaged without losing money.

    More fundamentally, the depiction of someone who sells a legal product at a price supported by an open market as a "drug dealer" is unnecessarily cynical. Alcohol purveyors do the exact same thing -- they assess demand, costs, competition, and other market pressures, and then set a price. Same goes for pharmaceutical vendors. This isn't a cutthroat attempt at bilking people out of their hard-earned money, it's an attempt to run a viable and financially solvent business.

    As far as "street prices" affecting the dispensary market, it's only natural. Dispensary owners buy from growers, who have the option of selling either to dispensaries or black-market buyers. In order to obtain high-quality cannabis, dispensary buyers simply must offer payments that growers find attractive compared to their other options. This naturally pushes up dispensary costs and, accordingly, retail prices. The real problem in this scenario is the existence of underground markets and supply chains in the first place, which can hardly be blamed on legal dispensary proprietors.

    Again, I understand the absurdity of plant material costing hundreds of dollars per ounce, but to react by dismissing business owners as "drug dealers" is equally ridiculous. This is a result of the legal gray areas and black markets pertaining to cannabis commerce, not of any inordinate amount of greed or lack of compassion.

  2. I appreciate that after a career in Law Enforcement you have joined the ranks of Drug Policy Reformers.

    Please leave the incendiary language like "Drug Dealer" in the station house.

  3. I suggest you read the California Attorney Generals Guidelines for the Security and Non-Diversion of Marijuana Grown for Medical Use, because everything you said is against California's medical marijuana laws.

  4. @Jay: Could you be more specific? If "everything" I said is against California law, I suppose that includes providing medicine for free to poor patients? Or paying what is needed for good product and pricing it so that one doesn't go out of business?

  5. I know of a few dispensaries who provide medicine for free, if you know of any, please let me know.

    The AG's office says, Collectives and cooperatives should be organized with sufficient structure to ensure security, non-diversion of marijuana to illicit markets, and compliance with all state and local laws. The following are some suggested guidelines and practices for operating collective growing operations to help ensure lawful operation.

    So collectives can't assess demand, costs, competition, and other market pressures, and then set a price.

    As far as "street prices", should pharmaceutical companies be allowed to sell Oxycontin on the black-market to the highest bidder?

    If you read the AG's office guidelines, you'll see that the growers you talk about are illegal growers. Under California law the plants belong to the patient, not the grower, or seller.

  6. I can't really speak to CA's system, and am only slightly familiar with NM's. (As far as I'm concerned the bar is too high and continuation of the black market assured.) But here in NM we have the gamut of inexpensive land and places to live, as well as jaw-dropping expensive places to live, and as one nears those expensive places, even seriously dilapidated housing in which I've lived and called a 3rd-world broom closet, is expensive beyond belief.

    From what I've heard in CA, the whole doggone place is outrageously expensive. Thus, everything is inflated there. Of course that is only made worse by enormous populations, which just creates huge demand for scarce resources, thus pumping up prices.

    I don't really know how much that factors in to mmj pricing, but I wouldn't be surprised if the NM growers are out in the boonies then haul it in.

    This whole situation is so disastrous as long as Drug War rages, it's like medics trying to set up a tent in the middle of a battle field.

  7. As far as "street prices", should pharmaceutical companies be allowed to sell Oxycontin on the black-market to the highest bidder?

    If you read the AG's office guidelines, you'll see that the growers you talk about are illegal growers. Under California law the plants belong to the patient, not the grower, or seller.

    Again though, the problem here is the supply-side gray market, not the business ethics of the dispensary owners. They need to get their product from a grower. The grower can choose to sell either to a dispensary owner or to the black market. If that dispensary owner wants his product, he simply must offer prices to the grower that compete with the black market. Otherwise, why would any growers provide dispensaries with product?

    The OxyContin analogy is flawed because there are no clandestine black market producers of OxyContin. The supply chain is just as regulated as the retail outlet. Legal manufacturers would never sell to street drug dealers. But why should an already-illegal (or, at best, quasi-legal) grower limit his demand to legal retail outlets?

    Oakland recently decided to license legal, large-scale grow warehouses to supply its dispensaries. This is exactly the sort of step that's needed to circumvent these issues: legitimizing of manufacture and large-scale supply. So long as the entire supply chain is mired in legal confusion, growers -- NOT dispensary owners -- will continue to consider the black markets and dispensaries as equally viable customers.

  8. With all due respect to Mr. Fleming, you are absolutely wrong to suggest that all dispensaries are "drug dealers" as you accurately cite the Attorney General guidelines layout the current requirements for mmp to follow. Those guidelines are and have been challenged in the courts.

    Patients in Needles are regularly receiving "free" medical cannabis because they cannot afford any medicines. It is also disingenuous to state that it costs 8,000 plus per pound of marijuana. Anyone even moderately aware of current market value of mm knows that it's half that amount. Mr. Fleming is taking out of context information and misrepresenting it to the readers.

    Anyone can google medical marijuana in Needles or anywhere else in calif and see for themselves the true collective prices/donations.

    If Mr. Fleming cares to contact or call 760 401-0749 you can get accurate info, instead of making either uninformed or disingenuous remarks that are false.

    There are many otherwise informed people involved in the medical marijuana industry in calif, that are no longer willing to allow people who have an agenda to mislead people. Your charges that people that are following the laws and guidelines are "drug dealers" leads any of us informed readers to believe you to be either ignorant or just simply a liar? Your comments please.

  9. Wow. There are some passionate views here. I think this is a classic example of why LEAP, as an organization, stays out of the post-legalization debate. (Individual speakers, of course, are free to promote their own forms of regulation for a post-prohibition world, which is exactly what Jay Fleming has done here in the context of legal medical marijuana).

    That said, one observation I do have: aren't these crazy inflated prices common in the California medical system, and across the United States for that matter? Surely this is a problem that goes beyond medical marijuana.

  10. For years now as a LEAP speaker I told people if we legalize drugs, drug dealers will go away.

    Medical marijuana id legal now in a number of states, yet the price for medical marijuana in California is the same black-market price that drug dealers have charged for years, the same black-market price that made drug cartels rich.

    So how is the same black-market price that made drug cartels rich, a fair price for non-profit medicine sold to patients?

    In a recent raid in San Jose, Santa Clara County Special Enforcement Team Commander Danielle Ayers defended the raids in an interview, saying the marijuana sellers were nothing more than profiteering drug peddlers and that their activities were drawing complaints.

    All I ask is that collectives follow the law, and the law says they can't make a profit. The California AG's guidelines say, "Non-Profit Operation: Nothing in Proposition 215 or the MMP authorizes collectives, cooperatives, or individuals to profit from the sale or distribution of marijuana.

    The guidelines also say, "collectives can receive compensation for actual expenses, including reasonable compensation".

  11. Delta 9 Collective and Delivery Service said, "It is also disingenuous to state that it costs 8,000 plus per pound".

    I question if this was really posted by the Delta 9 Collective and Delivery Service, since the link they provided, goes to a parked web page, no information.

    As for price in Needles, these are the prices posted on the web by the Kind Connection Collective in April 2010.

    Gram- 20, 1/8th- 50, 1/4- 95, 1/2- 180, oz- 340 donations.
    $20 gm = $8960 lb
    $50 1/8oz = $6400 lb
    $95 1/4oz = $6080 lb
    $180 1/2oz = $5760
    $340 oz = $5440 lb

    As you can see at the gram price, the price many sick people can afford, works out to a little over $8960.00 a pound.

    Like I said, the only people complaining about what I say, are the people making all the money.

  12. Like I said, the only people complaining about what I say, are the people making all the money.

    I'm complaining about what you say and I've never made one red cent from marijuana.

    These prices don't exist in a vacuum. It's all well and good to talk about patients owning the crops, and compassion before profit, but at the end of the day a business needs to stay in business. Which means, unfortunately, competing with the still-extant black market. Like David pointed out, "Surely this is a problem that goes beyond medical marijuana."

    And for what it's worth, all medical marijuana patients have the option of growing their own medicine or teaming up with a personal caregiver. The dispensaries aren't forcing anyone into anything, they're responding to customer demand. Obviously the proliferation of dispensaries means that many patients consider it the best way to obtain their medicine, all things (including prices) considered. This isn't predatory, this is just consensual business transacting.

    Once again: until large-scale cultivation and supply is clearly legalized and differentiated from the gray/black market, these problems will not go away. The vast majority of dispensary owners are simply working with the hand they've been dealt, and aren't trying to game the system to earn anything more than an honest living. Characterizing them as "profiteering drug dealers" is disingenuous in the extreme.

  13. We are called "Kind Culture Collective" in Needles Jay. And the largest unit we distribute to our members are ounces. We request a 340.00 donation per ounce.

    You're extrapolations on costs per pound is typical drug warrior style propaganda. We appreciate your prior emails to our collective but are offended that our responses to you as it relates to your perspectives on this matter are either being ignored by you or over your head.

    You're welcome to call us for a proper ass chewin at (760) 401-0891. And as already suggested please leave the propaganda at the station house.

  14. Please excuse my misuse of the word "you're" in my prior comment. I'm seriously offended at Jay calling us "drug dealers" and a bit upset. I just don't expect that out of a LEAP member. We even have one who is a member of our collective. And he IS NOT a big hypocrite like you Jay. I think you're just mad because we declined to furnish you with your meds with you being an Arizona resident. That would have been clearly illegal for us to do so under California state law Jay. You're just full of sour grapes.

  15. Did Jay try to obtain meds from you too Delta 9?

  16. Sorry for going on and on but I KNOW Jay has been made aware that we at the kind culture collective provide medical cannabis to some of our member patients at no cost to them!

  17. In response to did to "did Jay try and receive meeds from you to"
    Not sure if its him that calls wanting information, but refuses to become an approved member, but we consider Jay another victim of our drug policies!

    It would appear Jay's complaint is he is denied safe affordable access to the medication of his or his Dr. choice. His logic is at best confusing, but the "sour grapes" comment seems most accurate.

  18. As a patient with secondary progressive multiple sclerosis... I am disgusted by the prices they charge for my legal prescription. I can buy it locally on the street illegally for $60 an ounce... since my social security disability insurance will not cover it either legally or illegally, what is my benefit if I was to attempt to buy it legally? I moved from a state where it cost $200-250 per ounce on the streets, so I realize prices vary from region to region, and it is extremely inexpensive here in comparison to most regions.. But I can not see patients struggling to pay bills plus meds paying the prices that are being charged to purchase it legally. When it is a choice between buying it on the streets illegally and being able to provide a home for my children, or buying it legally and being homeless with 3 children... what do you think the average patient will choose? Great way to promote illegal activity, considering the price went down when it became legal here.


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