Medical marijuana industry still growing in Colorado    Business comparison El Paso County Medical Society policy statement on marijuana use
Caption +


Show MoreShow Less

Colorado made headlines worldwide when recreational marijuana went on sale to the public in January 2014.

News organizations descended on the Centennial State to document, and hype, the advent of legalized retail pot.

The act of applying for and opening a retail pot business became reality-TV drama. MSNBC filmed a six-part documentary titled “Pot Barons of Colorado.” There was great anticipation, and long lines, as pot shops opened for business, and a multimillion-dollar industry was born overnight.

By early February 2015, 334 retail shops were selling pot to the public, based on state Department of Revenue data.

And amid all the hoopla around legalized recreational pot, its older cousin, the medical marijuana (MMJ) industry — with 505 stores throughout Colorado — quietly continued to grow, adding patients by the thousands who seemingly had no problem finding physicians willing to diagnose what critics say are often phantom medical conditions. Statewide, the number of people on the Medical Marijuana Registry grew 4 percent in 2014 — the first year of legal recreational sales — from 111,030 to 115,467 by year’s end.

El Paso County was no exception. Although retail pot sales were banned in Colorado Springs, that didn’t dampen the local demand for marijuana — or its availability. The number of El Paso County residents on Colorado’s Medical marijuana registry grew

17.3 percent — from 15,328 in January to 17,986 in December. And those people have plenty of places to shop. City records show there are 91 licenses for medical dispensaries in Colorado Springs — one for roughly every 4,900 residents. Sales of medical pot in the city last year were up 11 percent over 2013 — from $53.7 million to $59.6 million — according to Gazette calculations based on tax collections.

The rise in the MMJ registry roll likely comes down to personal finances. Medical marijuana is subject to fewer taxes than its retail counterpart. When it comes to pot, Coloradans have proved themselves cost-conscious. A pot purchase at El Paso County’s lone recreational shop in Manitou Springs is subject to 24.03 percent in taxes — and that doesn’t include a 15 percent excise fee collected by the state. The same purchase at a medical marijuana dispensary in Colorado Springs would be taxed at 7.63 percent.

The cost disparity may explain why tax collections from recreational pot sales statewide haven’t produced the windfall originally projected.

In a blog post by the Colorado Fiscal Institute titled “Half a mile high: Coloradans not buying as much pot as expected,” the institute noted: “Coloradans are consuming about half as much retail marijuana as state economists predicted before voters approved special taxes on recreational pot in 2013, and many state residents have instead stuck to using medical marijuana, taxed at a significantly lower rate.”

The Colorado Springs City Council voted to ban retail marijuana stores in the city. However, there are dozens of medical marijuana dispensaries in town and other marijuana-related businesses. There are dispensaries in every region of the city, with clusters in some neighborhoods (see map, facing page).

For a comparison, The Gazette looked up licenses of pharmacies and liquor stores within the city:

• 91 medical marijuana center licenses

• 98 pharmacies

• 107 retail liquor stores

Some MMJ stores even advertise their price advantage over retail shops. A sign at a store on West Colorado Avenue, for instance, touts “$ave Money! Become a MMJ patient!”

Critics say the data raise questions about pot’s role in medicine and the legitimacy of the medical marijuana industry. Consider Arizona, which tracks daily sales of medical marijuana. Sales are highest on Fridays — just in time for the weekend. Wondering which days over the past few months were most popular for MMJ sales? New Year’s Eve and the Friday before the Super Bowl, according to the Arizona Medical Marijuana Program.

Twenty-three states have some sort of medical marijuana program, but regulations vary widely. Minnesota, for instance, will have just eight medical marijuana dispensaries statewide when its program launches in July, and patients will receive medical cannabis only in a liquid, pill or vaporized form. New York’s program also only allows nonsmokable marijuana.

Colorado lawmakers intend to address medical marijuana this legislative session. Among the issues expected to get attention: the oversight of caregivers — those designated by medical marijuana patients to grow pot for them – and doctors who approve patients for the registry.

Some say the number of patients on the state’s Medical Marijuana Registry far exceeds the number of people who have legitimate need for the plant. Ninety-three percent of medical marijuana patients in Colorado cite “severe pain” as their reason for using the drug and are smoking “medicine” with names like “Armageddon,” “Willie Nelson” and “Green Crack.”

Dr. Richard Zane, head of the Department of Emergency Medicine at the University of Colorado Hospital, summed up the MMJ industry in Colorado this way:

“It is not statistically mathematically possible that this one substance could possibly be effective for all the things that it has been listed for — and for the number of people in Colorado who have medical marijuana cards to have an indication for a disease for which a singular medicine is indicated and works. It’s a medical epidemiological statistical impossibility.”

Even so, the state seemingly has made getting on the registry more attractive; it lowered the application fee to $15, down from $35 in 2014 and $90 in 2012.

In November 2000, Colorado voters approved Amendment 20, allowing doctors to recommend marijuana for people suffering certain debilitating conditions. The vote was 53.5 percent to 46.5 percent.

But the industry didn’t really take off until after October 2009, when U.S. Deputy Attorney General David W. Ogden issued a memorandum stating it wasn’t prudent to use federal resources to go after MMJ patients and caregivers who were in “clear and unambiguous compliance with existing state laws.”

His memo said, in part: “The prosecution of significant traffickers of illegal drugs, including marijuana, and the disruption of illegal drug manufacturing and trafficking networks continues to be a core priority in the department’s efforts against narcotics and dangerous drugs. As a general matter, pursuit of these priorities should not focus federal resources in your states on individuals whose actions are in clear and unambiguous compliance with existing state laws providing for the medical use of marijuana.”

This was the green light financiers needed to open medical marijuana businesses without fear of prosecution — and applications for Colorado’s medical registry exploded.

In January 2009, for example, just 5,051 Coloradans were on the medical marijuana registry — including 568 people from El Paso County and 65 from Teller County, according to data from the Colorado Department of Public Health and Environment, which was charged with implementing and administering the MMJ registry.

The registry numbers in El Paso and Teller counties spiked to 2,947 and 300, respectively, by the end of 2009.

Today, MMJ shops in Colorado Springs are about as common as traditional drugstores. There are 98 pharmacies in the city and 91 licenses to sell medical marijuana. And dispensaries aren’t the city’s only marijuana businesses. Colorado Springs has issued 242 medical marijuana business licenses that also include grow operations and infused-product manufacturers, some just a stone’s throw from residential neighborhoods.

Jason Warf, executive director of the Southern Colorado Cannabis Council, came to Colorado for marijuana.

“Honestly, I moved out here to be more legitimate as a cannabis patient,” he said. “People stick with their red cards because they’re sick and they need it as medicine. Individuals need this as medicine. For patients, it’s not about recreating. It’s about treating what our issues are.”

Warf said he became a cannabis patient after a failed back surgery left him disabled.

“The red card numbers are up slightly, but there are some factors to take into account. We still have a huge influx of sick people coming to Colorado (for treatment),” he said. “And now since it’s legal, it opens the door for more people to be comfortable becoming cannabis patients.”

Warf worries that bills set to be introduced in the Legislature will chip away at the industry.

“In the last three years at the Capitol, what I’ve seen is really a push to essentially do away with medical. This is nothing more than a money grab. Obviously patients don’t pay nearly the tax on medicine that consumers on the recreational side do.”

Kevin Sabet, co-founder of Project SAM (Smart Approaches to Marijuana), which advocates for public health-based marijuana policy, believes there are components of marijuana that may have medicinal benefits but they concern only a small fraction of the industry.

“Look, I think the concept of medical marijuana is a political fraud and most businesses involved with medical marijuana are a sham,” said Sabet, who got top billing in Rolling Stone’s list of people deemed the biggest threats to pot legalization. “However, that does not mean there is not medical utility we can derive from the marijuana plant.

“We have early evidence about CBD, which could be helpful with muscle spasticity — if you’re suffering from MS or epilepsy,” Sabet said, referring to cannabidiol, a component in marijuana that does not produce a high. “These things should be further explored and that research should be promoted.

“But medicine should be approved by the FDA and gotten at a pharmacy with your doctor’s prescription. The way it has panned out in the last 20 years is that this has become a political movement designed to essentially get anyone stoned who wants to. It’s a political sham because most people who have medical cards … the vast majority of them are just to serve their own recreational pot interests.”

Sabet believes voters were duped by medical marijuana proponents into approving Amendment 20. Only 4 percent of cardholders in Colorado report using marijuana for HIV/AIDS or cancer, he said.

“But people vote for it and they want it because that’s who they think it’s going to,” he said.

“The legalization movement — they wanted to change the face of marijuana from the 1970s stoner to the 80-year-old with cancer. They did it very effectively. What that has done has unfortunately impeded the development of proper marijuana-based medications,” Sabet said.

A Colorado Springs physician who specializes in pain medicine and is a member of the Colorado Medical Marijuana Scientific Advisory also believes marijuana may have a medicinal use but said its sales and use are problematic.

“You can theoretically fill your trunk with medical marijuana products in one day — there’s no system to track that,” Dr. Kenneth Finn said.

“You know the definition of a caregiver?” he added. “Anyone who’s over 18 years of age and has a pulse.”

“Patients are free to self-medicate with a 10 percent THC bud or 90 percent hash oil,” Finn said. “They can eat, smoke and vape all day without any control.

“To be honest with you, I think that the industry has created a huge disservice for the people who might actually benefit from it. … I think it’s important that the terminally ill are not part of the debate, nor do I have issues with the pediatric population and the nonpsychoactive cannabinoids to treat pediatric seizure disorders,” Finn said.

“But I think it’s very important that cannabis as medicine needs to be studied just like any medication should be studied.”

Studies about possible medicinal benefits of marijuana are about to get underway. The state’s Board of Health approved spending

$9 million to research marijuana’s impact on several conditions, including PTSD, Parkinson’s and childhood epilepsy.

Not everyone was thrilled by the news, including pot advocates who argued against funding the studies with the registration fees paid by those on the registry; the group said such funding is an unconstitutional use of the money.

The Journal of the American Medical Association weighed in on the importance of marijuana research in its December issue, noting: “Patients with some seizure disorders may benefit from the cannabidiol component in marijuana, and several clinical trials will soon enroll patients.” It also noted: “However, it is unlikely that marijuana is effective for the wide range of health problems approved under Colorado law.”

According to the Colorado Department of Health and Environment, more than 800 doctors have signed a certification form the state requires for a person to apply to the marijuana registry.

Dr. Larry Wolk, executive director and chief medical officer of the Colorado Department of Public Health and Environment, said the majority of those doctors have each made just a handful of recommendations. But some physicians raise red flags — either by the sheer number of MMJ recommendations they are making or because they are making recommendations out of the scope of their expertise.

“Some things that don’t make sense — an OB/GYN who’s making hundreds of recommendations for male patients,” Wolk said as an example, or a pediatrician making recommendations to adults.

“Just in the past year alone we’ve referred 16 physicians for investigation,” Wolk said.

In December, one physician admitted to writing recommendations to more than 7,000 patients — many whom he didn’t personally see or evaluate. Dr. Lenny Sujdak pre-signed the Medical Marijuana Registry application forms and delegated the evaluations to mid-level practitioners. Documents from the state’s Department of Regulatory Agencies show his license to practice was placed on probation for five years. He is banned from performing any more marijuana evaluations and he was ordered to complete a course titled “The Opioid Crisis: Guidelines and Tools for Improving Chronic Pain Management.”

It’s unclear how many physicians have been sanctioned for similar infractions.

“We don’t track discipline by that specificity,” said Cory Everett, director of strategic and external affairs for the Department of Regulatory Agencies, which maintains licensing and disciplinary records of physicians. “We track it by the statutory violation.”

In order to make a medical marijuana recommendation, physicians are required to have a “bona fide” relationship with a patient.

“For us, it’s ensuring physicians are acting responsibly,” Wolk said. “They have to have a bona fide physician-patient relationship, which requires an ongoing relationship with a patient — not coming in once a year and not receiving all of the necessary components of a doctor visit including a history and physical exam and appropriate laboratory testing. You would expect to see at least that much if it’s truly a bona fide physician-patient relationship.

“I believe there are physicians who do have bona fide patient-

physician relationships who are earnestly and honestly making recommendations based on their knowledge of medical marijuana and their relationships with patients.”

Former Colorado Attorney General John Suthers told The Gazette that Colorado’s laws “have driven the adolescent perception of risk into the ground.”

Based on 2012 data from the Rocky Mountain High Intensity Drug Trafficking Area, nearly

27 percent of Coloradans ages 18 to 25 reported using marijuana in the prior month — the third-highest percentage in the nation behind Vermont and Rhode Island, which also allow medical marijuana.

Although retail sales are banned in Colorado Springs, the city ranked No. 2 nationwide for pot use in a Movoto Real Estate Blog, behind only Denver. The blog cited dispensaries per capita, number of residents with medical marijuana cards and head shops per capita among the criteria for its analysis.

If the numbers, anecdotes and experts’ opinions are indicators of how hard it is to regulate medical marijuana, Colorado certainly has work ahead as it attempts to regulate the recreational pot industry.

“What will be the impact of Amendment 64 on Colorado and other states? Only time will tell,” reads an excerpt from HIDTA’s 153-page August report titled “The Legalization of Marijuana in Colorado.” “The five-year experience with medical marijuana in Colorado may be indicative of what to expect.”

Does marijuana or some of its components have medicinal benefit? Early evidence indicates it may, but research is needed.

Suthers said the medical marijuana industry is “pretty much a joke.”

“I think there’s probably 2 percent of patients who have legitimate debilitating medical conditions. The surprise to me — I thought that with legalization the vast majority of these young people who are lying to their doctor about their chronic back pain would want to go legit. But that hasn’t happened. Apparently the market is a lot more price-sensitive than I thought it was.”

Evidence exists that may indicate the possibility of certain medicinal benefits from select components of the cannabis plant. A growing body of evidence also indicates negative physiological, psychological, developmental, and cognitive health effects associated with cannabis use. Until clinical research meeting rigorous scientific standards can be performed, EPCMS, in line with the policies of the American Medical Association and the Colorado Medical Society, believes:

• The recreational use of marijuana should be discouraged in adults and prohibited in children and adolescents;

• The medicinal use of marijuana should take place only within the context of an established physician-patient relationship, under medical supervision, based upon scientifically valid clinical research, and for specified medical conditions;

Additional research meeting the rigorous standards of pharmaceutical research should be conducted to determine any risks and benefits.

Load comments