Price-gouging complaint highlights stubbornly high costs for medical marijuana in N.J.

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Patient advocates filed complaints with the state Division of Consumer Affairs earlier this month to accuse medicinal marijuana operators of price-gouging, charging as much as $480 for an ounce of cannabis.

A state investigator replied promptly to say there was no legal recourse.

“The Division has reviewed the materials you submitted. We thank you for letting us know about this matter. Unfortunately New Jersey is not a price regulated state,” Kevin Noland, a supervising investigator for the office’s consumer service center wrote in Jan. 6 letters to Chris Goldstein and Edward “Lefty” Grimes and shared with NJ Cannabis Insider.

Goldstein and Grimes are members of the Coalition for Medical Marijuana New Jersey, a citizen organization and self-appointed watchdog for the medicinal cannabis program. They’ve been complaining about the price the program’s 121,000 patients pay for medicine since the first dispensary opened a decade ago. For most of the program’s history, consumers paid $500 after taxes, unless they qualified for discounts some dispensaries offered veterans or people who relied on SNAP or disability benefits.

In his complaint to Consumer Affairs, Goldstein compared Curaleaf’s prices in New Jersey and Maine.

“Curaleaf has a facility in Ellsworth, Maine and menu prices for medical cannabis are two to three times less expensive than New Jersey. A variety of ounces can be purchased for $75-$115,” Goldstein’s complaint said.

“Curaleaf locations in New Jersey offer one ounce of dried flower on a special discount for $200. Two to three strains are available for that price. However most Curaleaf NJ menu prices start at $37.50 per 1/8 ounce, and average about $400 per ounce,” Goldstein wrote.

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A spokeswoman for Curaleaf released a statement late Thursday that attributed the price point to New Jersey having “some of the highest real estate taxes and operational costs in the country.” That said, Curaleaf offers discounts for minors, veterans and terminal patients, among others, the statement said.

“New Jersey pricing is aligned with the local market and is similarly priced to neighboring regulated medical markets in CT, NY and MA. Maine is a unique, medical market which is supplied by over 4,000 caregivers and is not comparable to the New Jersey regulated market,” according to the statement.

According to previous analyses by The Star-Ledger/NJ.com and other comparisons, New Jersey patients have paid the highest prices for cannabis in the country.

As of September, patients in New Jersey paid $320 to $480 per ounce, according to a report released by the Cannabis Regulatory Commission in December.

Commission Executive Director Jeff Brown agrees prices remain out of hand and a reason why people quit the program or buy far less cannabis than they need to control their pain, muscle spasms, anxiety and other symptoms.

“The market may be producing more medicinal cannabis than ever before, however, CRC staff are still receiving the same complaints from patients: prices are unaffordable, and dispensaries cannot keep high demand products in stock. In fact, when assessing whether ATCs are adequately serving the patient population, the Commission must look beyond raw supply and also look at price and access points,” the report said.

“While current ATCs may assert that they are adequately serving the market, the fact that so many patients are leaving the medicinal program, and so many still complain about being unable to afford their medicine or find the products they want, tells a different story,” the report said.

Brown vowed to take price-busting steps two years ago when the medicinal marijuana program was run by the state Health Department and he was assistant commissioner.

“Following the passage of Jake Honig’s Law, which authorized non-profit ATCs to convert to for-profit businesses, the Department of Health requested price reduction plans as part of the conversion application process,” Brown wrote in an email. “ATCs that converted to for-profit enacted those conversions throughout 2020.”

The “Jake Honig Compassionate Use Medical Cannabis Act” Gov. Phil Murphy signed in July 2019 expanded the medical marijuana program in myriad ways, which included eliminating a one ounce limit on cannabis purchases per patient per month and allowing terminally ill patients to buy as much cannabis as they want.

So, does Brown think those price-reduction plans are working? He said it’s too soon to tell. Prices “rose slightly” from 2019 to 2020, and his office has not analyzed the data yet from 2021, he said.

“The industry certainly failed to live up to them (the price reduction plans) in 2020, but conversions generally occurred mid to later in the year,” Brown said. “Once we have full 2021 data that will provide better context for whether the for-profit conversions/transfers delivered any value to patients.”

Brown has said the most important thing the commission has done to reduce prices is to issue more licenses to growers and sellers in the medicinal market, and to authorize existing operators to add satellite shops. Today, there are 23 retail locations. The commission gave preliminary licenses to 15 additional growers and 30 sellers in October and December, respectively.

Goldstein said more aggressive steps ought to be taken.

In the last legislative session, Sen. Joseph Vitale, D-Middlesex and Assemblyman Herb Conaway, D-Burlington, introduced a bill that would cover the cost of medicinal marijuana for people who receive benefits from the Catastrophic Illness in Children Relief Fund, the Pharmaceutical Assistance to the Aged and Disabled and Senior Gold plans, and Victims of Crimes Crime Compensation Office.

Another bill by Vitale and now-former Assemblyman John Burzichelli, D-Gloucester, would have required coverage for people receiving workers compensation benefits and auto accident victims covered by the personal injury protection plans under the car insurance policy. Both bills failed to advance, but they have been resubmitted for the new session that began on Jan. 11.

Goldstein and the coalition won’t give up on convincing lawmakers that allowing patients to grow a few of their own plants is a solution, as well.

“My hope is to simply keep NJCRC apprised of the ongoing and serious financial burden for patients trying to utilize dispensaries,” Goldstein said. “Perhaps the Commission can schedule a listening session for registered patients and caregivers to discuss pricing and other concerns about the program.”

“We hope that legislators will take these concerns seriously as well. The hope is that one day New Jersey will regulate the prices for medical cannabis to prevent price gouging by permit holders,” Goldstein said.

This article first appeared in NJ Cannabis Insider.

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Susan K. Livio may be reached at slivio@njadvancemedia.com. Follow her on Twitter @SusanKLivio.

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