With premium dried weed at $500 an ounce since the first dispensary opened seven years ago, the state program’s 58,000 participants are complaining. As long as marijuana is illegal under federal law, no insurance company will cover the cost. The financial burden create limited options since costs remain high with few approved facilities. The supply and demand curve favors the dispensaries. With only six medical marijuana dispensaries, prices will remain high and give the black market further incentive to participate.
The proposed solution is being addressed by the state subsidies scheme. State Sen. Joseph Vitale, D-Middlesex, said he’s drafting a bill that would enable state-funded programs to pick up some of the tab. “Until the federal government gets its act together, we should be looking at what we can do” as a state," said Vitale, chairman of the Senate Health, Human Services and Senior Citizens Committee.
He’s examining whether the laws governing the State Health Benefits Program and the State Health Education Program could be changed to allow coverage of medicinal cannabis. The Catastrophic Illness in Children Relief Fund — which helps families in all income brackets defray the costs of care not covered by insurance — is another option, Vitale said.
The court decisions requiring the state Workers Compensation program to pay for medical expenses paves the way for a state-supported program, he said. (One case has been challenged and is pending before the state Supreme Court.)
Patients can write-off some of the cannabis costs on their state tax returns — but only when these exceed 2% of their annual income, however. Assistant Health Commissioner Jeff Brown, who oversees the state’s medicinal marijuana program, agrees the price remains a barrier for patients, especially those who do not qualify for the various discounts dispensaries offer to minors, veterans and low-income patients on public assistance programs. “I’d like to see more discounts offered,” Brown said.
The department’s cost analysis in its latest biennial report found bud prices varied from $360 to $500 an ounce. There are seven retail dispensary locations operating across the state, serving a patient base of 58,000 that grows by about 2,000 a month. Prices are depressing sales, according to the report. Patients on average are buying a half-ounce every month, far less than the 2-ounce limit allowed at the time, the report said. “For a patient in New Jersey, buying an ounce of whole flower per month without a discount could cost as much as $6,000 per year,” according to the report.
Gov. Phil Murphy’s administration in December granted permits for six new growers and retailers to join the market, but none has opened shop, citing issues with acquiring local approvals and securing financial backing. The health department is expected to announce a new round of winning applicants soon.
Solution from SP+GTM algorithm is to increase the supply and increasing competition. More ATCs must be sanctioned.