July 18, 2010

Marijuana price affected by fears of black market

Concerns about affordability arise as dispensary operators set prices high to prevent resale on the streets.

By John Richardson jrichardson@pressherald.com
Staff Writer

Maine's new network of medical marijuana dispensaries is expected to make the drug more accessible to disabled and ill patients.

Making it affordable may be another matter, however.

While the dispensaries are state-licensed nonprofits, most plan to charge virtually the same prices as illegal dealers charge on the street -- from $300 to $400 an ounce. At those prices, a typical patient with cancer or multiple sclerosis might spend $500 to $600 or more each month to relieve symptoms with medication that is not covered by insurance.

"I think $300 and $350 is way too much for a weed that can grow outside," said Andrea DiAnni, a southern Maine resident who uses medical marijuana to treat nausea and pain from a chronic illness. "I know what it's like to have to go without medication (because) there were times I couldn't afford it."

Newly licensed dispensary operators say they want marijuana to be affordable, too. But, they say, offering it at $100 or $200 an ounce would encourage patients to sell excess medication on the black market.

"There is an unfortunate fact that there is still this black market for this commodity," said Rebecca DeKeuster, chief executive officer of the Northeast Patients Group, the group planning to set up dispensaries in Portland and three other Maine communities this fall. "If our prices are too low, it encourages diversion."

Maine's Department of Health and Human Services has awarded licenses for the state's first six medical marijuana dispensaries, which plan to start selling the drug to qualified patients later this year. Two more dispensaries are expected to open early next year after a second round of license applications is submitted next month.

State officials selected the first dispensary operators two weeks ago based on their nonprofit business plans and other criteria, including whether discounts would be offered for low-income patients. The state is allowing the market to dictate prices, however.

"We honestly didn't take (price) into consideration," said Kathy Bubar, a DHHS administrator who sat on the selection panel. "We did look at (whether) the profits were excessive. We took points away for that."

Some have argued that high dispensary prices, not low ones, will encourage people to buy the drug illegally on the street. Patients who buy legally from a dispensary also have to pay to go to a doctor for a recommendation and have to pay a $100 annual registration fee to the state.

"If we start off lowering the prices in the medical marijuana community, the black market would have to come down in prices, too," said Charles Wynott of Westbrook, a longtime medical marijuana advocate who uses the drug to treat the symptoms of AIDS.

The patients who need the medication most are often disabled due to their illnesses and live on monthly disability checks, in many cases just $690 a month, according to Wynott and other advocates.

Wynott is one of a number of caregivers in southern Maine who grow the drug on a small scale for some of those patients at $150 an ounce, or less. For some of his sickest and neediest patients, Wynott said, "we don't even ask for money at all."

He doesn't worry that the patients are turning around and selling the drugs for a profit, he said, and dispensaries should not raise their prices for that reason, either.

A growing number of patients in Maine are now cultivating their own marijuana at home to save money. But, unless they invest hundreds of dollars in indoor growing equipment, patients typically don't produce enough of their own medicine to avoid buying it altogether.

Black-market prices for medicinal pot have been an issue wherever states have legalized it, although Maine is one of the first states to require that dispensaries be nonprofit. In California, a recent report by the RAND Drug Police Research Center concluded that decriminalizing marijuana use in general -- as California voters could do this fall -- would reduce the market price from $375 per ounce to about $38 per ounce based on production costs.

(Continued on page 2)

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