Strict regulations, low patient enrollment and political infighting all contributed to a slow start for medical marijuana in Illinois. However, while the fledgling program still faces a wide range of challenges, business owners and investors have a renewed sense of optimism with the expectation of several legislative changes that provide an economic boost and, more importantly, options for patients.
In May, lawmakers approved Senate Bill 10, which would extend the Illinois Medical Cannabis Pilot Program until July 2020. Licensed growers and dispensary owners now hold their breath as they wait for Governor Bruce Rauner to sign the bill into law. At the time of publication, the governor had not done so.
“We expect the governor to sign this legislation quickly,” said Tim McGraw, CEO of Revolution Enterprises, one of the largest state-licensed cultivators in Illinois.
The extension provides some assurance for the state’s slow-moving program, which had been set to expire at the end of 2017 and had received little in the way of help from a deadlocked state Legislature.
Despite the challenges ahead, the industry is far too young to write off just yet, said Larry O’Hern, CEO of Nature’s Grace and Wellness.
For O’Hern, it’s been fun to run his state-licensed cultivation business, even with all the problems, he said.
“This industry has provided me with everything I could ask for,” he said. “It’s got risk. It’s got controversy. I feel like we’re in a wagon train heading west. It’s the new frontier.”
Several key provisions of Senate Bill 10 breathe new life into the Illinois Medical Cannabis Pilot Program, including:
– Extending the pilot program to July 1, 2020 (the program had initially been set to expire in 2017).
– Adding post-traumatic stress disorder and terminal illness as qualifying medical conditions.
– Making patient and caregiver cards valid for three years instead of one.
– Eliminating the fingerprint requirement upon renewal of patient and caregiver cards.
– Changing details about required doctor-patient relationships; doctors will only have to certify that there is a bona fide doctor-patient relationship and that the patient has a qualifying condition, rather than specifically recommending the use of medical cannabis.
– Allowing minors who are patients to have two caregivers.[/themify_box][/themify_col]
The state’s first medical marijuana dispensaries opened in November 2015, but as of June, there were only 7,000 patients enrolled in the system. A total of 9,200 people had submitted applications. Businesses say the program needs about 20,000 to 30,000 patients on the books in the next six months to keep their doors open.
The Illinois pilot program includes about 40 qualifying ailments, but chronic pain isn’t among them, which has contributed to the slow start.
By comparison, one-third of all patients in Arizona indicate “severe and chronic pain” as their only debilitating medical condition. Chronic pain, either by itself or in conjunction with another ailment, affects about 90% of Arizona’s nearly 80,000 medical marijuana patients.
However, assuming Rauner signs SB 10, patients suffering from post-traumatic stress disorder and those with terminal illness will now qualify for medical cannabis — rectifying two glaring omissions from the original legislation.
The addition of PTSD means thousands of Illinois veterans and other residents who have suffered traumatic experiences, such as rape or abuse, will have access to medical marijuana, McGraw said.
“Quite frankly, this will save lives,” he added.
Recent legislation has also accelerated the authorization process for patients with terminal illnesses whom doctors give less than six months to live. Their approval time will be shortened to 14 days, compared to time frames of up to seven weeks previously.
Many in the industry have seen Rauner as an opponent of the marijuana industry; the first-term governor has rejected the addition of several other qualifying conditions.
“That’s cut down on the size of the patient population,” said John Kagia, director of industry analytics for New Frontier, an informatics company focused on cannabis.
Another issue is that most of the larger HMOs and physician groups have banned their doctors from recommending cannabis to patients. A handful of doctors who have made recommendations face lawsuits from the Illinois Department of Financial and Professional Regulation for recommending treatments without legitimate doctor-patient relationships.
“Politics clearly plays a role,” Kagia said. “One of the reasons why a market like Colorado has been so successful is that there has been very broad consensus and collaboration, so the program was implemented successfully. Collaboration makes any system stronger. Illinois had enough consensus to pass the law, but it needs more buy-in from state leaders.”
Tackling the issues
Some dispensaries are taking matters into their own hands to increase the number of patients, said Brad Zerman, director of the Illinois Cannabis Industry Association and CEO of the Seven Point Dispensary in Oak Park.
“As soon as I was awarded a license last year, I hired a licensed social worker to do outreach to new patients,” he said. “And that’s just grown, so now we’re doing seven or eight patient workshops a month in different towns. There’s clearly a lot of negatives in Illinois that have been reported over and over, but I’m actually really positive.”
The workshops help patients fill out paperwork, navigate the state system, have an FBI background check and get fingerprinted — all requirements for the program. Attendance has been full to bursting so far, Zerman said.
“We’re trying to make it a one-stop-shop for patients,” Zerman said. “People are sick, and they don’t know how to handle the system. So we have a team of people on these workshops, and so far it’s working.”
SB 10 should help alleviate this pain point as well, by streamlining the doctor certification process.
“Essentially, doctors will no longer be required to recommend medical cannabis treatment for patients, but will just need to certify that a patient has a qualifying condition,” McGraw explained. “This should help accelerate patient population growth as well.”
“We also work with patients to help them educate their doctors. We have materials we give them,” he said. “And we can follow up with those doctors and educate them.”
The outreach is a way for the dispensary to grow its own client base, he added.
“There are a lot of critics, but to me it’s about finding all the positive parts of the program and working to expand them,” Zerman said. “We’re spending a lot of money, but I think it will be worth it.”
He estimates the company spent between $40,000 and $50,000 on outreach in the past year.
Meanwhile, Larry O’Hern said his cultivation facility is actually running well and supplying medical marijuana to a handful of the 37 dispensaries that have opened thus far.
The farm is one of 21 licensed cultivation centers, but several have yet to begin producing crops. “We’re one of the few cultivators that is locally owned and self-funded, which has helped us,” O’Hern said. “We saw it as an agricultural enterprise, and we think it’s been well-received so far.”
Some cultivators have scaled back production or held off on construction because they’re waiting for more patients to be registered. Patient enrollment and dispensary revenue have both shown steady growth, ranging between 10-20% per month. During the month of May, Illinois dispensaries sold nearly $2.3 million worth of cannabis, bringing the program’s total up to $10.8 million over its first seven months.
“Our hope is it’s going to get better,” said Tim O’Hern, chief operations officer of Nature’s Grace and Wellness and Larry O’Hern’s son. “The patient count has improved slowly, but steadily. They’re approving about 400 new patients a month right now. But it’ll be interesting to see what total patient number is needed to support the industry.”
Tim O’Hern said he thinks at least 100,000 patients will ultimately be needed to sustain the program.
“Illinois has a population of 13 million people, and as things move forward, we think we’ll have a viable industry with what we’ve got here,” he said. “We’re still working things out, but I don’t think it’s as much gloom and doom as people foresee. It’s really just about increasing patient access and helping them find doctors who are willing to work with the system.”
For now, one of the biggest goals for the young industry has been achieved with the extension of the Illinois Medical Cannabis Pilot Program.
Scott Miller, the owner of Salveo Health & Wellness in Canton, said the political climate has been a mess. Politics being what they are, marijuana is largely an afterthought for state lawmakers, Miller said.
There’s still a lot of skepticism about medical marijuana, particularly among Republicans, Miller said.
“From a party standpoint, they’re going to go slower rather than faster,” he said. “But there’s been so much money spent here by sophisticated people that know their state reps, that have fundraised for state reps, that we don’t think they’ll leave us high and dry.”
But SB 10 is a game-changer for Illinois, McGraw said.
“Although we had a slow start because of some early vetoes by the administration, we are confident about the long-term success of the program,” he said.
“I think, initially, the biggest issue was that the pilot program wasn’t really on the current administration’s radar; there may have also been a lack of support as the pilot program was inherited from former Governor Pat Quinn’s administration. With the signing of this bill, that all changes,” he added, applauding lawmakers on both sides of the aisle for negotiating a fair, but ultimately beneficial compromise for the industry.
Zerman said adding more patients to the program is still critical.
“I think it will be harder for the Legislature to reject the program extension if there are 20,000 or 30,000 patients in the program,” he said. “And I think we have to do that as an industry.”
Marijuana Venture editor Garrett Rudolph contributed to this story.