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Why is Medical Marijuana in Louisiana So Expensive?


Medical marijuana in Louisiana - why is it so expensive?

Medical Marijuana in Louisiana is Just Getting Off the Ground - Stand By for Lower Prices


If you ran right out to get your medical marijuana card as soon as it was legal in Louisiana, then you probably experienced a major case of sticker shock at the pharmacy. In the beginning, products were outrageously unaffordable.


Hopes that therapeutic cannabis could be an accessible relief for patients across the Bayou State were put on hold for many in the early days.


However, prices have begun to drop in the last several months. Wellcana announced in July 2020 that it would reduce its prices, just days after marijuana competitor Ilera Holistic announced that it was finally ready to put its products on Louisiana pharmacy shelves.


Now, after two major price reductions, producers are saying that their profit margins are “razor thin,” and they will remain that way in order to help patients in the state access the benefits of natural plant medicine.


At this point, you may be wondering why medical marijuana is still so expensive if the companies that make the stuff are not getting rich off of sales. The answer is not a simple one, and there are several factors at play that determine the price of products on pharmacy shelves.


In this article, we are going to take a look at why medical marijuana is still so expensive, how and when we can expect to see products become more accessible to the average consumer, and what you can do to help the process move along.


Why Does Medical Marijuana Cost So Much?


In order to really understand the cost of medical marijuana in Louisiana, we need to look at everything that goes into its production both from a national perspective and on a state level.


Federal Laws That Keep Cannabis Prices Up

Despite public sentiment that marijuana should be legal (two-thirds of the US population thinks marijuana should be legal in some form, and 33 states have legalized medical marijuana), it is still federally prohibited.


This means that even companies that produce marijuana for medicinal use do not have the same benefits and protections that most businesses in the United States enjoy. Many banks are not willing to work with cannabis companies, insurance is fairly non-existent, and there are few tax breaks for business expenses.


Between licensing fees, proof of asset requirements, building facilities, and hiring specialized attorneys, getting a cannabis business up and running costs hundreds of thousands to several million dollars. Since banks are unwilling to lend money to marijuana businesses and there is no Federal support for the industry, all the money needs to be produced up-front.


Many marijuana companies have higher prices in the beginning just to recoup some of what was spent to get started. Then, when business starts to pick up, they reduce their prices to match the demands of a more mature market.


Louisiana’s Medical Marijuana Regulations Elevate Prices

In addition to all the financial complications that bump up the cost of medical marijuana from a national perspective, individual states play a role in pricing. States can either help bring prices down or elevate them to the point where therapy is inaccessible.


Right now, Louisiana’s regulations are making medical marijuana more expensive, but prices will likely start to come down in the future as the state figures out what works and what does not.


Competition is Non-Existent

As of right now, only two producers are legally allowed to grow and manufacture medical marijuana in Louisiana. The growing and production facilities are operated by private companies in partnership with Louisiana State University and Southern University.


The first two companies that signed up faced so many challenges getting started that they ultimately sold their rights to having a medical marijuana presence in Louisiana. GB Sciences sold out to Wellcana, and Advanced Biometrics sold its business to Ilera Holistic Healthcare.


These two companies have seen a bit more success, and they are still refining their relationship with customers and with the state. However, since they are the only companies allowed to grow and produce medical marijuana products in Louisiana, there is little motivation to bring prices down.


Wellcana did lower its prices early on because no one was buying, and the company brought its pricetag down a second time after Ilera announced that it was ready to introduce its products to the market. Imagine what bringing even one more producer to Louisiana would do for prices.


Demand Affects the Price of Medical Marijuana

Because medical marijuana producers are mostly just trying to recoup their initial startup investment, the cost of their products is directly affected by demand and sales. As demand increases, prices come down so long as supply remains consistent.


Demand for medical marijuana in Louisiana has been lower than initially projected for a few reasons:

  1. Louisiana’s list of qualifying conditions for medical marijuana was originally very short. Most people either didn’t qualify or didn’t know that they qualified.

  2. Only nine pharmacies are allowed to sell medical marijuana products. While they are located in the more populous regions of the state, this limits access for patients who are further away from a licensed medical marijuana dispensary.

  3. Education and customer outreach has been seriously lacking. Pharmacies are not allowed to advertise their prices, and many people do not necessarily understand the therapeutic benefits of medical marijuana due to the stigma associated with cannabis.

  4. Prices for medical marijuana products are prohibitively high, creating a cyclical nature to the price/cost dilemma. When prices are too high, no one buys. When no one buys, prices remain high to cover costs of production.

Louisiana Medical Marijuana Taxes and Fees

Individual states set their own fees and taxes on medical marijuana. Fortunately, residents of Louisiana are exempt from sales tax on their purchases. But there are still hefty taxes paid at the wholesale level. It is difficult to find dependable information on just how much Wellcana and Ilera are paying, but a 2019 article in The Advocate indicates that it could be as much as seven percent.


In addition to the taxes that Louisiana’s medical marijuana producers are paying, there are exorbitant fees associated with licensing. Again, it is difficult to find dependable information about licensing fees assessed for medical marijuana producers in Louisiana, but these costs may be several hundred thousand dollars annually.


How Will the Cost of Medical Marijuana Come Down in Louisiana?


In most states, the cost of medical marijuana generally comes down a bit as the program matures. Regulations relax, businesses find their footing, and patients find confidence in their choices.


More Qualifying Conditions on Louisiana’s List

The original list of qualifying conditions may have been incredibly limited, but Governor Bel Edwards signed a bill in June 2020 that significantly relaxed requirements for who could access medical marijuana. The new list of conditions is much longer, and doctors also have the authority to recommend medical marijuna for anyone who suffers from a debilitating condition.


Dispensaries in Louisiana Can Now Deliver Medical Marijuana

In addition to the new qualifying conditions, pharmacies are allowed to deliver medical marijuana to patients throughout Louisiana. There may only be nine pharmacies in the state, but they can deliver products to all precincts within their district. This now means that no one is too far from a dispensary in order to get the relief they need.


Medical Marijuana Is Exempt from Sales Tax

When medical marijuana was first legalized in Louisiana, it was subject to sales tax due to some very specific restrictions related to the wording of the bill. Prescription medication is exempt in Louisiana, but doctors cannot “prescribe” medical marijuana. They can only “recommend” it.


This technicality has been straightened around, however, further legitimizing the use of cannabis as a method of medicinal treatment and eliminating the sales tax on medical marijuana in Louisiana.


Bringing Louisiana’s Medical Marijuana Prices Down


One way that patients in Louisiana can help bring the cost of medical marijuana down, is by getting a recommendation from a doctor and making purchases when you can afford it. This may seem counterintuitive, however, participation in the program helps on three levels.


First, it will show legislators in Louisiana that there is demand for medical marijuana products. As suppliers reach their limits on inventory, the pressure will be on lawmakers to relax rules about who can grow and produce medical marijuana in the state.


Second, it will help lawmakers understand that they need to support a robust market. When sales do not match the number of outstanding recommendations, it signals that there is more to be done in order to make cannabis accessible to all.


Third, it will help reduce the stigma associated with using cannabis to treat symptoms and conditions. Many people do not realize that medical marijuana has legitimate therapeutic benefits, but seeing their friends and family feeling their best as a result of plant medicine will open their minds. This may help people feel more comfortable with seeing out this more natural, effective form of treatment. In addition to “voting with your dollars,” it’s always helpful to make your voice heard—and the work begins locally. Contact your representatives to ask them to help make medical marijuana more accessible to the citizens of Louisiana.


Ready to Get Your Louisiana Medical Marijuana Recommendation?


If you are ready to get your medical marijuana recommendation, Louisiana Marijuana Card is here to help. Our staff is the most knowledgeable in the industry, and our doctors are compassionate and understanding. Give us a call at 833-253-2943, or schedule a telehealth appointment online today!

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