The Legalization of Louisiana’s Medical Marijuana Is Finally Getting Started, So Expect Price Drops Soon.
If you rushed out to the drugstore the second medical marijuana became legal in Louisiana, you may have been met with some severe sticker shock. Initially, prices were ridiculously high.
Many people in the Bayou State had their hopes dashed in the beginning, when they thought medical cannabis may be a remedy they could easily obtain.
But in the past few months, prices have begun to fall. In July 2020, Wellcana offered pricing cuts after rival Ilera Holistic declared it was ready to begin selling its marijuana products in Louisiana pharmacies.
As a result of these two significant price reductions, manufacturers have stated that their profitability is “razor thin,” and they intend to keep it that way so that patients in the state can benefit from natural plant medication.
If the corporations producing medical marijuana are not becoming rich off of sales, then why are the products still so expensive? This question does not have a straightforward solution because many variables go into setting the prices of items sold at pharmacies.
In this post, we’ll discuss the factors that contribute to medical marijuana’s high price tag, as well as the steps you may take to make this industry more accessible to the general public.
The High Price of Medical Marijuana: Why?
The true cost of medical marijuana in Louisiana can only be appreciated by considering the full scope of its production, from both a national and local level of analysis.
Reasons for High Marijuana Prices at the Federal Level
Despite widespread support for marijuana’s legalization (66 percent of Americans agree that it should be decriminalized in some way, and 33 states have approved medicinal marijuana), federal law prohibits the drug.
This implies that, unlike other U.S. businesses, those that grow marijuana for medical purposes do not enjoy the same legal protections. Financial institutions are hesitant to cooperate with cannabis businesses, there is a dearth of suitable insurance coverage, and tax credits for related expenditures are slim pickings.
Building premises, engaging specialized attorneys, paying license fees, proving assets, and other charges add up to hundreds of thousands to millions of dollars for starting a cannabis firm. It is necessary to generate all of the capital upfront because neither banks nor the federal government will lend money to cannabis firms.
Prices for new marijuana businesses are sometimes higher than average at first so the business may return part of its initial investment. Then, when demand rises, they lower prices to meet the standards of the established market.
Strict regulations make medical marijuana very expensive in Louisiana
Medical marijuana is more expensive on a national scale due to a number of factors, not the least of which is the fact that prices vary from state to state. The cost of therapy is something that states may either help bring down or drive up to unaffordable levels.
Currently, Louisiana’s rules are raising the cost of medical marijuana, but as the state learns what policies work and which ones don’t, costs will probably start to decline.
There is no competition
Only two companies in Louisiana are authorized to cultivate and produce medical marijuana at this time. In cooperation with Louisiana State University and Southern University, private enterprises manage the growing and production facilities.
Since the initial two applicants had such a hard time getting going, they decided to sell their rights to operate in the Louisiana medical marijuana market. Advanced Biometrics was sold to Ilera Holistic Healthcare, and GB Sciences was acquired by Wellcana.
These two businesses have found more success and are working to improve their connections with both consumers and the government. Due to the fact that they are the only businesses in Louisiana legally permitted to cultivate and manufacture medical marijuana products, they have no incentive to reduce their costs.
Wellcana did drop its prices at first because nobody was purchasing, and the business did so again after Ilera declared that it was prepared to launch its items on the market. Envision the impact on costs of adding just one additional Louisiana producer.
Demand for Medical Marijuana Drives Its Costs
Since most medical marijuana growers are just breaking even, the price of their wares fluctuates in response to market conditions. If supply remains unchanged despite rising demand, then prices will fall.
Louisiana’s medicinal marijuana market has seen lower-than-anticipated demand for a number of reasons.
- The initial list of medical marijuana-eligible ailments in Louisiana was minimal. In most cases, persons either did not qualify or were unaware that they did.
- Nine pharmacies are designated as official distributors of medical marijuana. They may serve the state’s more populous areas, but this can be inconvenient for those who live further from a dispensary.
- There has been a severe dearth of customer education and outreach. Neither pharmacies nor their patients are allowed to promote their prices, and the negative connotations attached to cannabis mean that many people are unaware of the health benefits it can provide.
- The high cost of medical marijuana products is a recurrent problem. Overpriced goods and services are rejected by consumers. When there are no buyers, prices must stay high to pay manufacturing expenses.
Expenses and Taxes on Medical Marijuana in Louisiana
Taxes and fees for medical marijuana are determined at the state level. Thankfully, citizens of Louisiana do not have to pay sales tax. Yet, even at the wholesale level, there are still significant taxes due. The exact amount that Ilera and Wellcana are spending is unknown, but a 2019 story in The Advocate suggests that it might be as high as seven percent.
The licensing costs for Louisiana’s medical marijuana producers are astronomical on top of the state’s already high tax rate. Again, solid data on license fees assessed to Louisiana’s medicinal marijuana growers is hard to come by, although estimates put the annual cost at several hundred thousand dollars.
How will Louisiana’s Medical Marijuana Cost Drop?
As medical marijuana programs expand and develop, prices tend to decrease in most states. There is less of an emphasis on following the rules, which benefits both businesses and patients.
Louisiana’s List of Eligible Conditions Expands
While the list of ailments that qualified for medical marijuana was extremely short at first, Governor Bel Edwards signed a law in June 2020 that greatly expanded eligibility. The revised list includes a wider variety of ailments, and doctors can now recommend medical marijuana to anyone dealing with severe symptoms.
Louisiana dispensaries can deliver Medical Marijuana
The new regulations allow pharmacists in Louisiana to distribute medical cannabis to patients who meet the new requirements. Even though there are only nine pharmacies in the state, they can ship to every voting location. Because of this, there is now a dispensary within convenient driving distance of everybody who needs medical cannabis.
Medical marijuana is tax-free
As a result of the bill’s first language, medical marijuana in Louisiana was taxed at the point of sale. Even while doctors in Louisiana are allowed to “prescribe” prescription drugs, they cannot do so for medical marijuana. We only “recommend” it, at best.
But now that this snag has been resolved, Louisiana’s legalization of medical marijuana and the removal of the sales tax on it both go hand in hand.
Reducing the Cost of Medical marijuana in Louisiana
The price of medical marijuana in Louisiana can be kept low in part by patients like yourself who seek recommendations from doctors and buy only as they can afford to. Although it might seem contradictory, taking part in the program benefits you in three different ways.
- At the outset, it will demonstrate to Louisiana’s lawmakers the need for and interest in medical marijuana. There will be increased pressure on state lawmakers to ease restrictions on who can cultivate and produce the state’s cannabis if vendors hit their inventory limits and run out of product.
- It will show legislators why they should back a healthy market. When demand exceeds supply, yet sales fall short, it’s clear that more work needs to be done before cannabis can be made available to everyone.
- It will aid in lowering the taboo around medical marijuana. To many, the idea that cannabis has any medicinal value at all seems absurd, but witnessing loved ones flourish under the care of this plant medicine is enough to change their minds. This may make consumers more open to trying this healthier, more efficient option.
Making your opinion heard is as important as “voting with your dollars,” and it all starts at the neighborhood level. Make sure medicinal marijuana is easier to get a hold of in Louisiana by contacting your lawmakers.
Are You Ready to Get Your Recommendation for Medical Marijuana in Louisiana?
“Louisiana Medical Marijuana Doctors” is here to assist you in obtaining your medical marijuana recommendation. Our doctors are caring and empathetic, and our staff has the most extensive expertise in the field.