New York’s next medical marijuana licensees leap into embattled market

By Bart Schaneman

New Yorks health departmentannounced Tuesday it hasdoubled the number of medical marijuana businesses from five to 10, despite a pending lawsuit aimed at preventing such a move.

The increase in licenses makes the question at the heart of the suit even more pertinent: Can the state support its MMJ industry?

The new license holders enter the New York market believing theyll be able to build the patient pool when theyre up and running, likely in early 2018.

However, industry observers say the real stumbling blocks are lack of physician participation and promotion of the program by the state, not competition from other dispensaries, as the suit alleges.

There are more than 25,000 certified patients in New Yorks MMJ program, according to the health department, but only a little over 1,000 medical practitioners are registered to write recommendations for them.

The state has tried to grow both groups by adding chronic pain to its list of treatable conditions and allowing nurse practitioners to recommend cannabis as medicine, among others.

The growth trajectory has really changed, said Eric Sirota, co-CEO of Fiorello Pharmaceuticals, whose dispensaries will be situated in four counties New York (Manhattan), Nassau, Monroe and Saratoga.We believe the addition of five additional registered organizations is going to further accelerate that growth.

Licensees can coexist

With about 20 million residents in the state, Sirota believes theres a grand opportunity for both the existing and new license holders especially with the significant increase in the patient pool hes seen in the past four months.

Sirota disagrees that the five new licensees will have a negative impact on the states industry.

The market is growing quite substantially, he said, and I believe the introduction of five additional organizations will only further fuel that growth.

He envisions more product innovation and lower prices resulting from more business entities in the market, and the state concurs.

The addition of these registered organizations will make it easier for patients across the state to obtain medical marijuana, improve the affordability of medical marijuana products through the introduction of new competition, and increase the variety of medical marijuana products available to patients, Health Commissioner Dr. Howard Zucker said in a news release.

Big plans

Our goal is to establish medical cannabis as an effective and well-accepted therapeutic option within the mainstream medical community, said Sirota, a former executive at pharmaceutical giant Pfizer.

Sirota plans to use his experience in the pharmaceutical industry to focus on certain areas to help grow the New York market.

His objectives, while branding Fiorello as a pharmaceutical MMJ company, are to:

• Develop affordable products to give patients more options.
• Expand the number of registered practitioners through recruitmentand conducting educational meetings.
• Locate dispensaries in medical facilities.
• Conduct in-house research and development.

We believe it will help drive additional growth within the market along with the efforts of the new market entrants, Sirota said.

Lingering issues

Thats all fine, said one industry observer, but the real bottleneck in the program is the lack of physician participation.

I dont think it would matter if you had one or 100 (licensed businesses). The issue is that not enough doctors are on board and recommending marijuana as an alternative for treatment, said Matt Karnes, founder of New York-based GreenWave Advisors, a financial research and advisory firm for the cannabis industry.

Then theres thelawsuit filed byEtain, MedMen (formerly known Bloomfield Industries), PharmaCann and Vireo Health of New ...