Saturday, December 15, 2018

[Editorial] Flower Power To Go…Up in Smoke?

By on October 5, 2018

Editor’s note: The following editorial originally appeared in the Oct. 4-10, 2018, issue of Caribbean Business.

“Up in Smoke,” the classic comedy from High Times noir, starring Cheech Marín and Tommy Chong, works well as a title because it rang true with a pot-smoking population in the 1970s and for decades to come. It is not an attractive phrase, however, when tied to the potential tanking of the medicinal cannabis industry in Puerto Rico—as in ‘The Island’s Medicinal Cannabis Industry About to Go Up in Smoke.’

You read right; the Top Story in this edition of Caribbean Business reports that Puerto Rico could become the first jurisdiction to fail in its implementation of a medicinal cannabis industry that is thriving across the continental United States. Seríamos los primeros — the very first to fail.

Sadly, Puerto Rico’s government has done everything in its power to bury a potential treasure trove that other states—Colorado, California, New Mexico, Florida—proudly showcase as huge tax windfalls from the plant’s recreational and healthcare derivatives.

From the outset, when the debate centered largely on legalizing marijuana for recreational use, states such as Colorado and Washington touted the enormous tax haul on combined $2.57 billion in sales in 2014 alone. The decriminalization of marijuana in the mainland U.S. has taken pot mainstream in what has become a $10 billion industry in 2018. With those revenues, many more states are jumping into the trend started by Colorado and Washington—where both medical and recreational marijuana is legal—as states look for ways to add revenue streams to struggling bottom lines.

As was expected, Puerto Rico’s politicians would not jump on that bandwagon for all the wrong reasons, foremost among which was playing to the religious right among their constituents.

Evidence of the benefits in regulating the sale of pot—helping Hacienda capture money from the underworld—far outweigh any concerns over usage by adults in our society. Local politicians refuse to bend to those mary-janeconomics.

Sound public policy today could generate as much as $700 million annually in local sales of cannabis-derived products that have proven to have tremendous medicinal benefits for the treatment of certain illnesses. There’s now a ton of evidence pointing to the medicinal properties of cannabis in the treatment of cancer and AIDS. Many cancer patients, for instance, explain how cannabis reduces nausea and stimulates appetites to help recover weight lost during aggressive chemotherapy.

If properly regulated, cannabis medicines would contribute significantly to Puerto Rico’s economy. Although they have been paying lip service to the medicinal benefits of cannabis, there is too much doublespeak and foolhardy planning keeping the industry from flourishing. The forked tongues were employed when legislation to regulate the medicinal cannabis industry made its way to the Senate—the puritan issues then had to do with the use of the marijuana flower in treatment; the pols said it had no medicinal benefit.

As the law stands today, dispensaries are able to distribute cannabis products—oils, foodstuffs, gum and balms—for medicinal use. Unfortunately, there are market forces at work—namely a glut of dispensaries outpacing patients that threaten the local industry because of skewed supply and demand. The president of the Medicinal Cannabis Industry Members (MiCam, as it is known in Spanish), José Rivera Jiménez, explained that the law, originally passed under the administration of former Gov. Alejandro García Padilla, took into “consideration…population, geography, location of patients, and all that data marked what would be the development and growth of the industry in an organized way.”

Unfortunately, the original law that established a moratorium on new dispensaries until the market reached the 100,000-patient threshold was amended with approval of Law 42 and Regulation 9038. Thus, amendments to the law are permitting the haphazard establishment of dispensaries that are too close in proximity and other startups without sufficient seed cash— the requisite minimum is $250,000.

The local Health Department, says Rivera Jiménez, has received more than 70 requests for cultivation licenses, 52 for manufacturing and 261 for dispensaries for a market of 37,000 patients.

To put matters in perspective, Puerto Rico also has 18 manufacturing centers to serve a population of 3.3 million people. In stark contrast, Florida has 17 manufacturing centers to serve a population of 22 million people. If the government doesn’t proceed with caution, there is a real threat that the many manufacturers and dispensaries will wind up in a cannibalized market much like the underworld, dog eating dog, in a fight for the 37,000 patients.

The medicinal cannabis industry is flourishing in other markets because there is a healthy balance of supply and demand. The sooner we understand that in Puerto Rico, the sooner we can begin to create desperately needed jobs.

Puerto Rico Medical Cannabis Industry Teeters on the Brink

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