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Maryland: Regulators Advance Discount Cannabis Plan For Vets And Medicaid Recipients

Maryland cannabis regulators have advanced a framework for providing discounted cannabis to eligible registered patients, including veterans and state Medicaid recipients.

The Policy Committee of the Maryland Medical Cannabis Commission unanimously approved a proposed framework for the Compassionate Use Fund on Thursday. The fund, established through a broader industry-expansion bill in 2018, allows registered patients enrolled in the Maryland Medical Assistance Program or the Veteran Affairs Maryland Health Care System to purchase medical cannabis at a lower cost from dispensaries.

The proposal will now go up to the full commission for a vote. It outlines how the fund will be administered, including how much licensed cannabis businesses must contribute each year, the minimum discount dispensaries must offer to eligible patients, and how those stores will get reimbursed by the state.

The proposed regulatory framework includes:

  • A minimum discount of 20% on all cannabis products for eligible patients (dispensaries can go further, the regulations note)

  • A schedule of fees for licensed businesses to pay in, amounting to either 1% of a full year’s revenue or (if lesser) $60,000 for processors, $75,000 for growers, $95,000 for growers also operating a dispensary and $20,000 for dispensaries

  • A process by which dispensaries can be reimbursed by the MMCC for the discounts they provide

Under the proposed rules, newly licensed businesses won’t need to contribute to the fund for their first two years in operation.

MMCC Executive Director Will Tilburg said setting rules for the fund “has been a long time coming.” He stressed that “it was an important legislative priority” following two legislative session discussions with industry partners, patient groups and members of the General Assembly, adding that the framework was discussed at three public meetings and a workgroup session in the State House.

Despite being established by law in 2018, the Compassionate Use Fund has remained empty in the absence of a framework for funding it. The Maryland Department of Health was initially entrusted with drawing up those rules, but HB 870, enacted in 2020, moved those duties to the MMCC specifically. An MMCC report from December 2018 estimated the fund would need “at least $5.6 million in FY 2020 to provide a 15% discount, and $7.5 million to provide a 20% discount to Medicaid enrollees and veterans, based on current patient enrollment figures.”

At the time, the state’s industry had about 75,000 registered patients and 71 dispensaries, and had generated just shy of $100 million revenue after its first year up and running, per a year-end Baltimore Business Journal report. It has since exploded, with nearly 142,000 patients now registered, more than 90 dispensaries licensed and a pace to surpass over $575 million in revenue for 2021, per a recent projection provided by Tilburg.

“Having this regulatory proposal move on is important for us being able to operationalize this fund and enable certain low-income qualifying individuals to receive discounts for their medicine,” he said Thursday.

The committee also approved two other motions for consideration by the full commission at an upcoming meeting. One allows registered nurses and licensed naturopathic doctors to become a dispensary’s clinical director, and another creates a framework for using a cannabis business license as collateral for a loan.

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