What if Illinois were more like Colorado?

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Colorado had $117 million dollars in cannabis sales in the month of April.  In one month.  $117 million.

Illinois was a little less than that.  $2.57 million in medical cannabis sales in June 2016.

Of course the comparison is not fair – looking back to Colorado’s medical cannabis sales in 2013 (before recreational sales began in 2014), medical sales were still nearly $27 million per month.  Ten times that of Illinois, and Colorado has less than half the population.

As you probably already know, all of this is by design.

Illinois purposefully designed a new medical cannabis law that was heavily regulated, and limited to a small number of medical conditions (excluding chronic pain).  Colorado’s medical cannabis law developed over many years, and was designed to be liberal and inclusive.  The results are clear.

But what if Illinois had been more like Colorado or California?  What if physician recommendations were more like a suggestion than a strictly-enforced, physician license-risking requirement? What if we had added severe pain, or had unlimited business licenses to grow or sell, or if Illinois patients could grow their own cannabis at home?  As a former regulator, I am instinctively partial to strong regulations and government oversight – but this comes at a price.

For starters, we know Illinois would have hundreds of thousands of medical cannabis patients if the law had reflected California or Colorado.  In turn, there would have been more revenue and taxes, more patients with less pain and better health, more diversity in products and more of a free market.

But maybe the biggest difference would be less tangible, and more of a policy shift – I think it would change the way we think about cannabis – and it would have a profound impact on social justice and criminal justice.

If home cultivation were permitted, would cannabis be so stigmatizing?  No, of course not.

If medical cannabis were more easily accessible to those in daily pain, would we have such opioid addiction and drug incarceration problems?  No, of course not.

If Illinois had a medical cannabis program that reflected those last seen in Colorado and Washington, would we have more jobs, more local tax revenue, and a smaller black market for marijuana?  Yes, of course we would.

Luckily, Illinois is on the verge of fixing one of these problems: decriminalizing possession of small amounts of cannabis.  In the next few days SB 2228 is set to be enacted into law – if you want to let Governor Rauner know why cannabis decriminalization is a step in the right direction, you can contact him about SB2228 here.

Compliance – for the regulators and regulated.

“Compliance” is a term that is thrown around – often without a clear definition of what it means, and how it matters.

I initially worked with “compliance” matters in my first job as a healthcare consultant.  Compliance plans are ubiquitous in healthcare, largely developing after audit and anti-fraud initiatives of the federal government in the 1990’s.  Today – most industries have ongoing compliance activities, compliance officers, and compliance plans.  Compliance can simply be a catch-all position to reduce risk for a company, and often uses employees without specialized compliance experience.  I am particularly partial to “How to get a job in compliance with little or no experience.”  At least they’re being transparent about it.

But true compliance needs are growing.  The Wall Street Journal thinks a Compliance Officer is one of the hottest jobs in America.  I’ll take WSJ’s word for it, but the topic itself tends to be boring and fall on deaf ears.

The truth is, compliance matters and should be taken seriously – especially in the developing cannabis industry with the variety of security, laboratory testing, packaging, record keeping, product tracking, and other regulatory requirements.  Compliance services are an increasing trend in the industry – most recently leading two of the country’s better known cannabis-focused law firms to jointly create their own compliance software for businesses.

While we’re at it, compliance matters not only for those being regulated, but for the regulators themselves.

Think of it as akin to the issue of “who is policing the police?”

When we were developing the Illinois medical cannabis program, there were dozens of issues to address every day of the week.  We dealt with the crises, but we were left with precious little time to consider how the implementation was going.

How would we establish benchmarks for success of the Illinois medical cannabis program?  How would we improve and modify the program moving forward?  How would cannabis businesses be able to share valid suggestions without the government disregarding them as self-serving?  How could Illinois learn from best practices of other states, and fix unanticipated problems, in the face of constant political, fiscal, and bureaucratic pressures?

“Compliance,” you say?  Indeed.

Some common compliance elements include effective communication, clear policies and procedures, monitoring program success and failures, appropriately responding to unforeseen or negative incidents, and general good management principles.  Of course these aspects are beneficial to a private cannabis business.

I would go so far as to say these elements are even more critical, and less common for government regulators and programs enforcing cannabis laws.  Government regulators don’t often have the time or training to implement successful compliance tools – that’s what outside consultants and compliance experts are for (here’s lookin’ at you, Wall Street Journal!).

Some states are already diligently tracking compliance markers for their medical and adult-use cannabis programs. Washington and Colorado have produced annual reports measuring a variety of benchmarks for their programs. Arizona went a step further with their medical program and hired a compliance consultant to conduct a comprehensive review of strengths and weaknesses of their medical marijuana system:

“The [Beacon-ID consulting] report recommends a state inventory tracking system, expanding patient registry systems to include faster and better sharing between physicians, regulators and dispensaries, standardized rules for packaging including child-proofing and increased inspections including unannounced ones.”

All state cannabis regulators should ensure a rational review of the successes and failings of their respective programs – especially those like Illinois where the program automatically sunsets January 1, 2018 without legislative renewal or expansion. We can all benefit from taking into account extensive data about the business, health, security, and quality of the state’s cannabis industry. The various state agencies must incorporate the tenets of compliance for us all to effectively evaluate next steps – we can’t just wing it and make emotional decisions about the future of these programs. A compliance plan is just one way for the regulators to track the successes and failures, and I hope such preparation and self-analysis paves the way for the continuation and expansion of the Illinois medical cannabis program.

Attend a cannabis conference…but not more than 2 of them!

Odds are, most of you have attended a few conferences in your life.  It could have been a gaming/casino industry convention in Las Vegas, 414 Milwaukee Day, LebowskiFest, or a jewelry fashion show in Rosemont, Illinois (Yes, I’ve been to the jewelry fashion show.  No, it was not my idea.  No, I did not enjoy myself.).  You see my point – there are conferences for everything in our lives.CannaTech

Given my professional career, I get to attend a number of conferences.  Pot Conferences.

My guess is that half of you are already smiling at the thought of a McCormick Place-level throng of attendees getting high and eating munchies. Nope, it is not that kind of party.  But if you are curious, let me describe to you what it is like attending a cannabis industry conference.

Let’s start with commonalities with almost any other conference:

  1. Headliners/keynote speakers, endless expert panel discussions with 2-4 panelists, expo’s with businesses promoting their products and services, and lanyards that share your name and workplace.
  2. Convention centers and conference ballrooms, stale hotel rooms, and hundreds or thousands of people you don’t know.
  3. Several days of meetings offering you the best chance to discard a bulk of your 500+business cards, and before you can blink you are longing to return home to your family and personal life.

Here is where cannabis conferences diverge from the norm:

  1. Yes, there is a fairly-constant scent of marijuana throughout the conference from those vaping in their hotel rooms, outside, and perhaps in the stairwell.  Sometimes there are cannabis-friendly gatherings depending on what state the event is in (Colorado=yes; Illinois=no).
  2. The vendors are unmistakably focused on the cannabis industry – promoting their vaporizers and extraction machines, insurance and consulting services, and everything in between.
  3. There is an electricity in the air.  Everyone seems to embrace the presumption that this industry is booming, that it is morally and scientifically beneficial, and will be trending upwards for many years to come.  Attendees also seem to appreciate, and thrive on, the ever-present risk in the cannabis industry that it all could be shut down at any moment by the federal government.  It sometimes feels like a capitalistic version of civil disobedience.
  4. It is not boring.  We are talking about cannabis, after all.

Conference - MJBizSummit2

There are many, many conferences/social gatherings/industry conventions to choose from.  They could cost as little as $20 for a meet-up at a bar, or as much as $750 per person and thousands of dollars per company to stage a booth.  Some of the best are hosted by groups like the National Cannabis Industry Association, Marijuana Business Daily, and Marijuana Investor Summit.  I’ll even shamelessly promote a smaller Illinois conference I helped organize discussing cannabis legal issues.

But as fun and educational as cannabis conferences can be, I would strongly discourage you from making a habit out of attending them.  For starters, they quickly become redundant – betraying how recycled the session information can be.  It can be difficult to see through those peddling B.S. versus those that are true industry experts.  The events are expensive – paying $750 a pop, plus hotel and airfare, can quickly become much too expensive for the likely return.

Finally, the proliferation of conferences diminish the overall value.  Marijuana Business Daily showed how quickly they have expanded by identifying 6 conferences in 2014, but 31 conferences in 2015!

Forbes joined in by interviewing industry leaders on the impact of so many pot conferences:

“You can literally attend, speak or exhibit at an event every weekend,” said Chris Drissen, Chief Business Development Officer at O.penVAPE. “It has really had a negative impact on the attendance and viability of the few shows that are worth going to.”

For those of you considering attending your first cannabis conference – choose wisely and sparingly.  It is absolutely worth going to one, but if you start attending so many that you reuse your lanyard from conference to conference, consider finding other things to do with you hard-earned cash.

 

How many medical cannabis patients will there be?  

How many medical cannabis patients will there be?  This question has been asked since the dawn of the Illinois program.  In fact, all medical cannabis programs around the country have played the numbers expectations game.  As with any high-profile program, one strategy is to set expectations that you can meet and hopefully exceed.  This can mean the difference between a headline of “Wave of patients exceed state’s expectations,” versus “Desperation as state fails to explain lagging patient enrollments.”

Every new medical cannabis program is framed by discussions of patient participation numbers.  Colorado had over 110,000 at its peak before recreational cannabis was introduced (roughly 2% of its population), while New York’s kickoff was abysmal at 71 patients (out of nearly 20 million residents).

Bob photo - press interviews

I was asked for my projections the very first time I was interviewed about cannabis, and it has been raised regularly ever since.  In that first interview I guessed that there would be “tens of thousands of patients over time.”

“State officials expect a flood of applications, perhaps “tens of thousands of patients over time,” Morgan said. The state’s medical marijuana program website has received more than 12,000 unique visitors and more than 2,000 people have signed up for email notifications about the program.”

It was my first of many future interviews with the Associated Press in my role as coordinator for the medical cannabis program.  I vividly remember the interview because I was quite nervous, and because it took place over a weekend while I happened to be on vacation in Utah, attending the Sundance Film Festival for the first time.

The interview started well, with anticipated questions and corresponding straightforward answers.  I was walking down Main Street in Park City, the home base of activity for the Festival, and it was fairly chilly outside.  Holding my cell phone with gloves on, I was feeling good about the interview until it happened.

I turned to see three adult men walking down the street in their underwear…and nothing else.  It was at this exact time that the AP reported asked me how many patients I expected for the 4-year pilot program.  I was frozen both literally and figuratively.  I asked the reporter to repeat the question to buy myself some time to get a grip.  I blurted out – “thousands of patients in the first year, and hopefully tens of thousands of patients over time.”

And there it was.

The projection stuck as a basis for many future press stories, and what many applicants used on their financial estimates when applying for state licenses later that year.

The numbers game played out in other instances too.  There was the time Illinois sought a contract to print I.D. for patients.  In the procurement documents we needed to indicate the maximum number of patients that we expected in the next few years – and we projected up to 100,000.  This, too, became a headline and added to the folklore of the pilot program.

As of this blog there are about 4,000 people registered with the Illinois medical cannabis program.  There are undoubtedly hundreds of thousands that are eligible with conditions like cancer, multiple sclerosis, and severe fibromyalgia (there is no exact count of eligible patients since there is no accurate statewide tracking of all relevant medical conditions).  So my answer several years ago is still my answer today – I expect tens of thousands of participants in the medical cannabis program over time.  There are variables that will impact the numbers – whether the Illinois Department of Public Health adds new medical conditions, whether physicians become more comfortable with the program and start recommending participation in greater numbers, etc.

But I believe the best answer to the numbers game would be – total numbers don’t matter if even one person is denied access who would benefit from medical cannabis.  If even one person is denied, then our job isn’t done.  The Pilot Program will only be a legitimate success when we are no longer arbitrarily blocking Illinois residents from relief.