Now That Weed Is Legal, Oregon’s Medical Marijuana Program Is Facing An Existential Crisis

Mercury Staff

Nobody else in Oregon has the same job as Erich Berkovitz.

Berkovitz is the owner of PharmEx, a medical cannabis processing company in Salem. Licensed medical growers and patients bring their plants to PharmEx, where the cannabis is infused into oil concentrates, edibles, suppositories, and other forms that make it possible for patients to take their medicine in high doses. Those products are then either given back to growers and patients, or sold at one of Oregon’s three cannabis dispensaries that only serve medical marijuana patients.

In January 2018, Oregon had 13 licensed medical cannabis processors. Now, PharmEx is the last one standing—and Berkovitz isn’t sure if his business will make it to 2020. It’s not that he doesn’t want it to, but according to Berkovitz, he’s stuck in a bureaucratic system that’s designed for failure: the Oregon Medical Marijuana Program (OMMP).

“They’re making it more and more difficult to participate in the system,” Berkovitz says. “They’re basically forcing out the mom-and-pop farms and making it impossible for people to stick around. So I’m really just the holdout here. It’s not a very profitable place to be.”

Berkovitz’s declining profits are a symptom of a bigger problem with OMMP: Growers, a key link in the supply chain of medical cannabis, are being driven out of the system by increased regulation and fees, making it harder for patients to access affordable cannabis. And a lack of sustainable funding for OMMP makes this a difficult problem to solve.

Berkovitz’s frustrations with OMMP are shared by patients, growers, doctors, and advocates in the program. Criticism of the system has intensified each year since 2014, when Oregonians passed Measure 91 and legalized cannabis for recreational use.

OMMP, which is overseen by the Oregon Health Authority (OHA), was created in 1998, shortly after Oregon legalized medical cannabis. The program wasn’t built to co-exist with a legal recreational market, and changes made to OMMP since legalization have left many of the patients who rely on medical cannabis—such as those with debilitating medical conditions, many of whom are on a fixed income—struggling to access the medicine they need. As OMMP continues to hemorrhage patients, growers, and businesses, many in the world of Oregon cannabis are searching for solutions—and wondering if it can continue to exist in its current form.

The conversation around OMMP wasn’t always so dire. Oregon was among the first wave of states to legalize medical cannabis in the late ’90s, and the system—in which patients had designated growers who provided them with free cannabis—was functional, if imperfect.

OMMP worked on a financial level, too. The program was self-funded by registration fees and, in the pre-recreational days, was so lucrative that lawmakers siphoned off surplus funds to pay for other things the state needed, like clean drinking water programs and school health centers.

That all changed after Measure 91. In 2015, 72,000 people were registered as OMMP patients; by 2019, that count had dropped to 27,000. The program has witnessed a similar decrease in the number of licensed growers and dispensaries for medical cannabis in the state.

Oregon cannabis experts agree that a good chunk of those patients probably left because recreational products suit their needs just fine, and they didn’t want the hassle or the $200 expense of having to register with OMMP every year. Likewise, plenty of medical growers, processors, and dispensary owners saw dollar signs in the recreational market and switched over of their own accord.

But that mass exodus, along with new oversight regulations, has left OMMP’s remaining patients and growers in a tough spot. Medical growers now face new annual fees of $200 per patient. With a maximum of eight patients allowed for each grower, registration fees can climb to $1,600 a year. There’s also a new $480 annual fee to use Marijuana Enforcement Tracking Reporting Compliance (METRC), the OLCC’s “seed to stem” online tracking system.

“If you are in an area that’s banned recreational sales, you might have to drive over an hour to get to a recreational shop. And some people can’t afford to buy a whole month’s worth of medicine at once.”

Under OMMP rules, medical growers can sell any leftover products they have—which, according to most growers, usually isn’t much—to the state’s three remaining OHA-licensed dispensaries. And each grower can sell up to 20 pounds of cannabis a year to the state’s recreational industry, which is overseen by the Oregon Liquor Control Commission (OLCC).

But Sarah Duff, who, along with her husband, owns and operates Oregon cannabis consulting company Duff Johnson Consulting, says those incentives don’t do enough to offset registration costs and encourage medical growing.

Many growers also take issue with having to using METRC. Despite the OLCC’s efforts to train growers to use the system, many say it’s unnecessarily complicated and expensive to use. And while METRC is intended to help prevent medical product from ending up on the black market, it’s an issue that, on some level, still exists. And, says OHA’s Ourso, the state lacks “any data to quantify the magnitude of the problem.”

This money and regulation crunch on cannabis providers has resulted in a scarcity problem for patients looking for designated growers. Duff Johnson Consulting operates a grower-patient matching service, but they haven’t been able to take on any new patients for the last two years because growers are opting out of OMMP.

“It’s difficult—we almost need growers that are independently wealthy to be able to afford the fees,” Duff says. “I’ve only got a handful of growers that still grow for patients, and I’m so grateful that they do. I try to help them in any way I can.”

If having a designated grower or growing your own cannabis isn’t possible, there are other ways for OMMP patients to get cannabis. They can go to an OHA-operated medical dispensary or visit any recreational dispensary where they are exempt from paying state and local taxes. But a quarter of current OMMP patients are also on the Oregon Health Plan (OHP)—a strong indicator they’re on a fixed income and can’t necessarily afford dispensary prices.

Cannabis prices can vary based on product and quality, but an average medical cannabis patient needs to consume much more than a typical recreational user—meaning the costs at a dispensary can add up quickly. One former chemotherapy patient and OMMP cardholder told the Mercury she estimates the average chemo patient might spend more than $200 a week for medicine from a recreational shop.

Recreational growers and dispensaries can legally donate a portion of their products to medical patients. But the OLCC does nothing to incentivize this option, and no growers have applied to do it. Only a handful of recreational dispensaries in the state offer donations to medical patients.

“The patients that are hurt the most are the ones who cannot afford to spend money at a dispensary,” says Duff. “Legalization has been good for patients that can afford to go purchase at a dispensary because the prices have dropped significantly. But it still has not dropped enough for some people who basically have to choose between their medicine and rent or food.”

Even if they can afford to pay, some patients face other hurdles to access: medical conditions that make it difficult to get to a dispensary, living in remote areas where recreational dispensaries remain illegal, or living far from Oregon’s three remaining medical dispensaries. Licensed caretakers can pick up medical cannabis from a grower or dispensary for a patient, but even in those cases, distance can still be a problem.

“If you are in an area that’s banned recreational sales, you might have to drive over an hour to get to a recreational shop,” says Berkovitz of PharmEx. “And some people can’t afford to buy a whole month’s worth of medicine at once.”

There are also challenges for those patients who live in a dispensary-dense area like Portland and can absorb the cost of paying out of pocket for their medicine. Since recreational dispensaries tend to cater to customers looking to get high for fun, it can be difficult to find products that come in consistent doses or edibles that aren’t packed with calories.

Such issues are why so many medical patients and growers turn to Berkovitz who makes low-sugar edibles that are “as small and as strong as possible,” while still keeping to the 100-milligram limit set by the OLCC.

“They don’t look pretty or taste good,” he says, “but if you’re taking 2,000 milligrams a day at 100 milligrams per edible, I don’t need you eating 20 candy bars.”

If Berkovitz closes his business this year because of lack of profitability, patients will either be forced to use recreational products or make their own edibles, tinctures, and other products.

“At the end of the day, it’s one plant, and all of it should be held to the same high-quality standard. Why are we working so hard to try to find a way to regulate it separately, in different ways?”

With a decline in registrants and the fees they would normally pay to be in the program, OMMP is facing financial problems as well. A 2018 state report cited “insufficient funding and staffing resources to meet the demands of robust regulation.” And without proper regulation, it’s more likely that substandard or potentially harmful product will make its way to patients and that some growers will sell their extra product on the black market.

Many longtime medical cannabis advocates also resent what they perceive as an unwillingness from recreational businesses to help solve the problem. Their anger is reinforced by the notion that medical cannabis was only important as a stepping stone to full legalization, both in Oregon and in states across the country.

“[Medical cannabis advocates] are the people that got them to where they are,” says Compassionate Oregon’s Taylor. “Yet... the overwhelming majority of those licensees refuse to stand tall and take care of the patients that got them there.”

Mike Getlin, a recreational grower and the founder of cannabis policy lobbying group, the Oregon Industry Progress Association, says the frustration goes both ways. He has firsthand experience with medical cannabis growers who routinely sell their pot on the black market—something that annoys him as a recreational grower who faces more regulatory scrutiny than medical growers.

“We’re pinching pennies on my farm, trying to do things the right way and having to replace [security] camera coverage and all the things that go into having a licensed business,” Getlin says. “And every day I drive past this [medical] farm that’s making millions of dollars selling products on the black market.”

Still, Getlin and many of his colleagues feel what he calls a “responsibility to work towards better patient outcomes for medical patients.” He works with state lawmakers to develop cannabis policy, and one bill he helped pass in Oregon’s 2019 legislative session will establish a pilot program that will explore ways to improve access for medical cannabis patients.

Taylor also sits on the Oregon Cannabis Commission, an advisory committee that reports to OHA. Earlier this year, the commission released a list of recommendations to improve OMMP, including better testing to make sure the cannabis isn’t tainted, investment in medical research, and expanded access for low-income patients.

All those recommendations, however, would require a new funding source, which has yet to be identified. Medical cannabis advocates are hopeful the Oregon Legislature will address OMMP’s problems before the 2021 legislative session. But some problems might be addressed as soon as this fall when the OLCC is set to consider changes to how it regulates cannabis.

Oregon’s medical cannabis program may be confusing, messy, underfunded, and poorly regulated—but it’s hardly alone. Rachel Knox, a Portland doctor and cannabis advocate who specializes in cannabinoid medicine, says she doesn’t “think there’s a state yet that has built a medical program in the right way.” (Knox is also on the Oregon Cannabis Commission, but told the Mercury she was speaking on her own behalf, not as a representative of the commission.)

“I think all these states are going to have to start from scratch if they want to maintain a medical program that fits alongside, or can be encompassed by, an adult-use [recreational] marketplace,” says Knox. “I think they can survive together—I really do—but you have to establish it in an ecosystem built for that.”

Knox envisions a system in which growers, processors, and retailers are regulated under the same system—with no distinctions for “medical” or “recreational”—but patients who have a doctor’s approval will have access to more potent products and be eligible to pay reduced prices. She compares it to how we buy aspirin now: low-dose is available over-the-counter, while people with prescriptions can buy it in a stronger form.

There’s now at least some precedent for such a system: Earlier this year, Colorado merged its recreational and medical cannabis systems, though it’s too early to tell if the change has been successful. A similar proposal is in the Oregon Cannabis Commission’s list of recommendations from earlier this year.

“At the end of the day,” Knox says, “it’s one plant, and all of it should be held to the same high-quality standard. Why are we working so hard to try to find a way to regulate it separately, in different ways?”

Unless cannabis is legalized nationally, it’s unclear if such a future will be possible. Still, Knox is optimistic about the future of medical cannabis in Oregon—especially if the vast network of users, growers, researchers, and sellers work together.

“It’s going to take every supply chain member and stakeholder who is gaining something from this industry to reform it,” says Knox. “And that is a lofty, lofty challenge. But it can be done.”