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@mainetoday.com
Staff Writer
Maine's new network of medical marijuana dispensaries is expected to make the drug more accessible to disabled and ill patients.
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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.
Northeast Patients Group expects to charge around $340 an ounce, which it says is slightly less than the street price here of $360. But the group also is promising to make sure its neediest patients can afford the medicine.
"There would be programs for seniors and for people who are unable to purchase their medicine (at the market price). I understand that concern and we want to make sure that everybody who needs this medicine can access it," DeKeuster said. "We do have a serious concern about diversion and we also feel we will be able to come up with a pricing structure that works for everybody."
Another operator, who plans to open a dispensary in Wilton, said he hopes the facilities will help make medical marijuana more affordable over time, even if the prices can't start off that way.
"I think we have a social responsibility here where our prices are not set by the black market, but we have a sense of what the black market is," said Tim Smale, president of Remedy Compassion Center.
Smale is projecting a price of $400 per ounce in the first year of operation, but declining to $324 by the third year as start-up costs decline and sales grow. Smale said the dispensary also will offer discounts, or even donated medicine, for patients who can't afford those prices.
"I'm a patient, too. I want lower prices over time," Smale said. "I have never been able to afford this medicine to the extent that I need this for my migraine therapy."
Smale said the dispensaries are a big step forward for patients, but not the last step. "I think it will be accessible. Whether or not it's affordable may be another story and that's what we have to work on."
A third dispensary operator is preparing to open Safe Alternatives in Fort Kent and has estimated its price to be $250 to $300 an ounce. But Safe Alternatives also plans to keep prices close to market prices in its region to limit illegal resale of the drug, according to its license application.
Some have hope that prices will come down because of competition among the eight dispensaries and because more patients are growing their own or getting it from small-scale caregivers who often sell at discounted prices.
"With multiple dispensaries and a multitude of options outside of dispensaries, these dispensaries are going to have no choice but to offer reasonable prices," said Jonathan Leavitt, who helped lead the referendum effort last fall that opened the door to dispensaries.
Concerns about diversion seem valid, up to a point, Leavitt said.
"I think that reality exists. I just hope it's not a smoke screen to keep prices high," he said. "Anybody providing patients marijuana at $400 an ounce needs to get out of the business of working with patients. I think the numbers should come in significantly lower than that."
Staff Writer John Richardson can be contacted at 791-6324 or at:
jrichardson@pressherald.com
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43 COMMENTS
dcl3500 said...
Well you know if we would just legalize its use there would be no black market for it. Legalize pot, it is the right thing to do!
July 18, 2010 at 12:35 AM Report abuse
WReader said...
I'm not qualified for medical marijuana in Maine, but I have to spend $580 per ounce to get high grade, seedless/stemless hydroponic bud that comes out of California and B.C. There's plenty of cheap commercial Mexican brick weed in Maine, but up here, if you demand premium buds, you get ripped off. $400 per ounce sounds like a good deal to me, as long as it's premium stuff.
July 18, 2010 at 2:39 AM Report abuse
demelza said...
If patients have to spend $400 per month at a despensary you will get a better deal on the 'black market'. Sounds like you are already going to get ripped off...
July 18, 2010 at 3:42 AM Report abuse
badjuju said...
Until it is legal, there will be a black market and criminal elements. Legalize it and remove the profit, then these go away.
July 18, 2010 at 6:14 AM Report abuse
Kathie said...
Why don't you just raise the price on all prescription drugs that are sold on the black market. Ya that's the solution Maine. Just out for more money again and again and again.
July 18, 2010 at 6:26 AM Report abuse
Gary said...
Sounds like a lame excuse for ripping patients off to me.There's a black market for many legal drugs. Instead of all the bullcrap about moratoriums on dispensaries that towns and cities are playing with, maybe some thought should have been given to pricing regulations.
July 18, 2010 at 6:52 AM Report abuse
2B said...
MaineCare recipients are selling their prescription drugs. They will also sell the prescribed marjauna on the street. Doctors should be monitored as to how many prescriptions they are pushing that are not absolutly necessary. This would reduce the cost to the taxpayers in addition to reducing the sale of prescription drugs on the street.
July 18, 2010 at 7:19 AM Report abuse
AXeL said...
A doper on MaineCare can get a quarter-pound of weed per month, sell half of it for $800 and still be stoned most of their waking hours. Add that income to their SSI check of $650 and we have the equivalent income of someone making $11 per hour and paying taxes.
July 18, 2010 at 7:43 AM Report abuse
crackhead said...
If it sounds like scam and smells like a scam it must be a scam
July 18, 2010 at 7:48 AM Report abuse
nikonwilly said...
For those which profit is life itself , health, physical or emotional means nothing. I guess there is no escaping it when your whole system is based on this principle...how very sad indeed. Any issue that allows for rules,regulations and laws to be haphazardly applied will cause a mess to enforce. We never learn from our past.
July 18, 2010 at 7:59 AM Report abuse
Scrib said...
Funny the proponents of mm didn't mention this inherent problem during their campaign.
July 18, 2010 at 8:26 AM Report abuse
zombie9 said...
Does anybody remember $12.00 lids?
July 18, 2010 at 8:28 AM Report abuse
Bole said...
Excuse me, but the black market is the biggest business in marijuana. The black market is only black by laws that try to tell people what they can have and not have violating the 9th amendment.
July 18, 2010 at 8:30 AM Report abuse
Johnnyboy said...
"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." >isnt this the same thing? you use prices to determine profits duh
July 18, 2010 at 8:31 AM Report abuse
amV0cy1tYWluaWFj said...
I get a laugh at 90 percent of these people that qualify. Headaches is a reason to have Pot. Wow. I am thinking wash your hair or cut it. You and I know who ever is getting this pot is selling it and keeping half.just legalize it. The state would make out. Pot is better then beer, you never hear about a person going off on pot. The food stores would make out.Its a bunch of Poop for not selling it in tobacco stores!
July 18, 2010 at 8:34 AM Report abuse
Chew said...
How is it possible that DHHS didn't consider pricing as a factor since medicinal pot is not covered by insurance? I somehow find this difficult to comprehend... If pot were legalized the price would plummet, the quality would become consistent, and the black market would be financially hurt. Hmmmm. Overlooking the obvious...
July 18, 2010 at 10:41 AM Report abuse
badjuju said...
D.H.H.S. is the height of stupidity and criminality in this nation. Send all the fat ladies home, for good.
July 18, 2010 at 11:01 AM Report abuse
oldernwiser said...
A $100 fee to have a medical mj card? That is unconstitutional.
July 18, 2010 at 11:16 AM Report abuse
ERP said...
Did you ever hear the joke about a camel being a horse designed by a committee? Well here is a brilliant example of the people approving a horse and the bureaucrats turning it into a camel.
July 18, 2010 at 11:27 AM Report abuse
Z2VydDE5MDU%3D said...
Imagine: an alcoholic gets paid and goes to a nearby bar with friends - spends much of the paycheck on booze - comes home and in a drunken rage beats their spouse & maybe goes to jail for domestic violence. The family is exposed to much chaos. Money that should have gone to pay rent or bills is spent - family does without necessities. Same person comes home from work, rolls a couple joints, sits and smokes, and eventually falls asleep. There's still money for the family and no one got beat up - no one went to jail for domestic violence. Which is the better option?
July 18, 2010 at 11:29 AM Report abuse
Clara07 said...
Well, if the State and DHHS is so concerned about patients "making money" off of pot, through the Black Market, why don't they start monitoring ALL prescription drug use, and up the prescription price for the infamous Oxycontin, as that drug is the most abused in this State, and I'm sure is sold for 50 times the amount on the Black Market.
July 18, 2010 at 11:33 AM Report abuse
dfghdfghdfgh said...
I just love watching the liberals in Augusta formulate their "Medical Mari j wanna" plans. Here is how it is about to unfold... A guy goes to his doctor and gets a prescription for Marijuana, goes to the dispensary and gets it filled ONCE... and then buys Marijuana on the black market FOREVER (at a 10th of the cost that he could buy it from the dispensary). The dispensary gets into financial troubles because NO ONE is refilling their "Prescriptions", and starts to go under. The Augusta Liberals get nervous and move the dispensary's under the DHHS control...AND WE as Maine taxpayers get into the Marijuana business.
July 18, 2010 at 12:14 PM Report abuse
DasBoot said...
Growing it yourself is a better deal.
July 18, 2010 at 12:22 PM Report abuse
PortlandRock said...
This is nothing more than an excuse for an outside company like Northeast Patients Group to gouge sick people just like the insurance companies do. I hope the state does the right thing and issue more dispensary licenses.
July 18, 2010 at 12:45 PM Report abuse
aG9jdXNwb2N1cw%3D%3D said...
What a bad joke. I can buy a pound of kgb for $2k and not have to deal with the pinhead politicians.
July 18, 2010 at 1:01 PM Report abuse
common_cents said...
you can go on the internet and find the most sophisticated supply houses in Amsterdam for seed and indoor cultivation. ......sounds like this 'drug' is going to be eligible for billing under OBAMACARE and under MAINECARE....Isn't that the idea; make it a legal drug and then shift the expense of paying for it over to the taxpayer?
July 18, 2010 at 2:39 PM Report abuse
nonesuch said...
I can see the logic behind keeping the price high to keep it off the streets but that is a boat load of money for a lot of working folks. I'd have to settle for Tyenol or drink a hell of a lot more.
July 18, 2010 at 2:47 PM Report abuse
common_cents said...
Why not have Dennis Dechaine grow it at Warren? nice prison industry; can set the price like they do the furniture; nothing exotic...'premium buds'...hmmmm. brand it with the STATE OF MAINE logo, grow it organically; etc. I don't think high street prices will prevent resale; if anything, dispensaries will be held up and supply will disappear from inventory.....Wonder if those 'fat ladies from DHHS' were the same ones who designed the MAINECARE billing system that never worked?
July 18, 2010 at 2:56 PM Report abuse
jack33 said...
The government should not set up the system so that legitimate marijuana is significantly more expensive. Only the government (state or fed) will be to blame if no one can buy legitimate. This isn't rocket science, people.
July 18, 2010 at 3:43 PM Report abuse
swiftman said...
Why the worry about the black market? It's been out there for years and there not going away.Your responsibility (DHHS)is to make sure the price and profits for these dispensary operators is completely fair and the black market price should not be an issue.It is just a completely STUPID argument.
July 18, 2010 at 4:33 PM Report abuse
Scrib said...
Unintended consequences. Liberal "experts" will never learn...
July 18, 2010 at 4:44 PM Report abuse
7199 said...
The price of ganja is kept high (PI) by the stupid actions of government. It's simple to grow, easy to smoke and has value for certain medical conditions. If it were legal, the prison population would decrease significantly, tax revenue would soar and plenty of people would be happy. Government at all levels is a stumbling beast... often doing much wrong for the right reasons. It's just a matter of time until it's legal.
July 18, 2010 at 4:47 PM Report abuse
mpaxton said...
300-500 dollars for what you can grow for free in your backyard. Who says the spirit of cannibalistic capitalism is dead in Maine? We can take advantage of our people just as viciously as anyone else.
July 18, 2010 at 4:53 PM Report abuse
null said...
I was using the stuff for about a year till I recently changed doctors, for chronic pain, insomnia, restless leg syndrome, arthritis, and a couple more illnesses.. I have never paid more than 120 an ounce for good seedless stickles homegrown and you are talking about an average price of 300 to 400.. I have never seen those prices here in Maine.. 75 an ounce for Mexican brick weed.. As someone said in a post most people are on ssd or ssi and they cant afford those prices.. The black market will thrive on those prices or they will raise their prices to keep up with the legal stuff.. These are California prices.. People this is what happens when you give contracts such as this to people out of state.. Im going back to the Pharmaceutical Companies to give them another try.. I just cant afford them prices..
July 18, 2010 at 5:13 PM Report abuse
BonusEleven said...
LMAO...I find it amusing to read about people mislabeling a free market as a "black" market. It's been 300 to 400 an ounce for well over a decade precisely because the government was not involved. Liberals are simply clueless when it comes to free market economics. Wait and see folks, their solution will be to sell it to patients at 200 an ounce and then subsidize the remainder with our money to keep the price in line with the free market. How else will they cover the inherent government overhead? What a joke. Just legalize it and let everyone grow. Then you'll see the price come down as supply will increase dramatically. Of course, that's just too simple for the liberals!
July 18, 2010 at 5:27 PM Report abuse
mpaxton said...
i think what we all need to understand is that there is a limit to just how far the people will willingly let government and big business exploit them. M can be grown for free >>> i suspect we have a year or so of the "dispensaries" gouging and we'll see all sorts of people growing their own......and daring the authorities to arrest them and support the continued raping of the population that so desperately needs the help. A few videos of really seriously sick cancer patients being arrested because they couldn't afford the "legal" M, and got a relative to grow some for them......in other words, big pharma probably has a year of obscene profits here before the revolt. i know that i will be publishing stories of cancer patients priced out of the market on my blog.....in their full blazing obscenity.
July 18, 2010 at 6:12 PM Report abuse
Wally2468 said...
Just mass produce it and give it to anyone that wants it. That'll take care of the black market!
July 18, 2010 at 9:57 PM Report abuse
smarty said...
Jeeze - In the 60's we got it for $20 an ounce. I say - if you have the space - grow your own!
July 19, 2010 at 7:50 AM Report abuse
youknowit said...
Does anyone really the oh so convenient argument that they just have to keep up with black market prices? Nothing to do with greed? Is this a taxed item, and don't the so called non profits take "salaries" out of the distribution process? Wonder how big a "salary" they'll get from $400. an ounce, with expenses to produce that are a fraction of that? They have to keep up with the black market, what a laugh!
July 19, 2010 at 8:35 AM Report abuse
Mainedog said...
So a new low for the state! We are going to set prices by the illegal marijuana market! Why should that even matter? Sounds like an easy way to justify the outrageous cost. Now everyone knows why there are so many takers for the so called non-profit dispensaries. If you used that logic prescription drugs prices would even be higher. The state should set the prices based upon the actual cost and if someone is caught selling their stash than they should be prosecuted to the fullest extent of the law! To let an illegal act dictate the price is ludicrous!
July 19, 2010 at 9:17 AM Report abuse
said...
To place a high price on the product because of something people might do is asinine. If someone is caught selling the substance they obtained legally for their own use, prosecute them. Basing the price point on the illegal market simply demonstrates how large this illegal market is and emphasizes the reality that we should simply legalize pot in order to reduce illegal activity and the type of crimes associated with it.
July 19, 2010 at 12:08 PM Report abuse
said...
Medicinal pot should have a genitic marker. If you are tested for using and pop positive without the marker.........bye bye.
July 19, 2010 at 12:49 PM Report abuse
said...
How many other drugs require a $100 yearly fee and the black market to set the price. I figured Maine would screw this whole thing up but I didn't think it would be this bad.
July 19, 2010 at 9:17 PM Report abuse