Medical Marijuana Seen Its Days

When we talk about legalizing Cannabis, there’s really two sides to the movement. The driving force has been the movement to legalize Medical Marijuana. And states that have legalized Medical Marijuana have seen patient count and sales skyrocket. However, now with some states legalizing recreational use of Marijuana, there is a trend away from Medical to recreational Marijuana.

CNBC had a recent article on this shift from medical to recreational marijuana. In it, GreenWave Advisors (cannabis industry analysts) is quoted as saying

“We forecast the average patient count will continue to decline from approximately 114,000 in 2014 to 99,000 by 2020,” GreenWave said. At the same time, GreenWave predicts that the recreational side will see compound annual growth of 20 percent, “with likely upside as the market expands into new jurisdictions.”

What does this mean for medical vs recreational marijuana and for the whole cannabis industry as a whole? The CNBC article states:

GreenWave said current fundamentals indicate that eventually, there will be only one legal marijuana market—one that combines medical and recreational under one set of regulations and a single tax rate.

If the industry combines into one legal marijuana market, we think there will be even greater cannibalization of the medical side from the recreational side. If the trend is toward diminishing medical sales, the industry in its current state would disappear almost as a self-fulfilling prophecy. As a business, dispensaries, if given the choice between stocking medical vs recreational cannabis, will always go where the money is. They will allocate greater portion of their operating budget to serve the recreational marijuana market.

So is this the end of the medical marijuana market? Not at all. What we see happening, once the Federal Prohibition is lifted, is more companies investing in cannabis medical research. This will result in medical products that are much more targeted at specific illnesses and therapies. The GreenWave Advisors, in the CNBC article, is quoted as saying:

“We believe that the medicinal use market will recalibrate when the pipeline of new, more targeted medications become available and as the medical profession gains more comfort in ‘pushing’ a marijuana treatment rather than a patient having to ‘pull’ a prescription,” writes GreenWave’s Matthew Karnes.

The articles goes on the quote another industry insider…

Leslie Bocskor, managing partner of Electrum Partners, an incubator for legal cannabis start-ups, took that prediction about medical pot’s future even further last week. He told a group in Las Vegas that one of marijuana’s most promising future markets will take cannabis beyond easing problems to curing them. He said there will be markets for pharmaceutical and “nutraceutical” products—meaning supplements and the like. “There will even be a veterinary market,” he said.

Although we have come far in the legalization movement, everything is hampered and diminished by the current inconsistency between Federal and State laws. We all know there is great medical potential in cannabis with some states leading the way. And to have the Federal Government classify cannabis as a Class I drug (meaning they see no health benefits to cannabis) seems like another example of politicians waiting for the political winds to change rather than leading the way to save lives.

(Full text of CNBC article “Medical marijuana business may have met its match”)

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