Elaine Keevin took morphine for eight years to battle what was later diagnosed as complex regional pain syndrome, a chronic condition the McGill Pain Index rates more painful than childbirth.
The opiate – along with a variety of other prescribed medication – helped Keevin with the pain but not her livelihood.
“I was a medically supervised junkie,” Keevin told state lawmakers at a March 20 House Finance Committee meeting. “It’s called the ‘suicide disease’ because … people who have it try to commit suicide. I tried when I was on the opiate.”
The former EMT worker says a switch in medication to marijuana helped save her life.
Keevin is now a patient and caregiver in the Rhode Island medical-marijuana program. She’s licensed to grow marijuana at her home – legal for medicinal use under state law – for herself and other patients.
She is one of 19,299 medical-marijuana patients in the state, a number that’s grown 1,541 percent from 1,176 patients in 2009. Roughly one in every 44 adults – about 2 percent of the state’s population – participate in the program that has helped patients such as Keevin but, according to state regulators, has also spawned a burgeoning black market.
Based on state-authorized “plant tags,” the program has the capacity to produce 14,164 pounds of marijuana per year beyond what patients are allowed to have (73,336 pounds) under current law, according to a Providence Business News analysis. At about $220 per ounce, which regulators say is an average price on the black market, the potential excess capacity is worth $49.9 million. Regulators, who don’t track the excess production, say it is most likely going to the illicit market.
“Rhode Island is one of the biggest producers of black-market marijuana in the Northeast,” said Norman Birenbaum, the state’s top medical-marijuana regulator.
Hoping to fix that legal loophole – and plug projected multimillion-dollar deficits in upcoming fiscal budgets – Gov. Gina M. Raimondo has proposed tighter growing restrictions and a rapid acceleration of the program in her fiscal 2019 budget.
Her proposal to create new licenses and allow the number of regulated marijuana dispensaries, dubbed compassion centers, in the state to expand from three to 15 could raise an additional $5 million for the state’s general fund.
To make the math work, however, the patient count needs to nearly double.
The program would also have to move away from the loosely regulated homegrown operations – such as Keevin’s – to the more controlled and heavily taxed compassion centers.
In addition to trying to rein in the illicit market, the state’s proposal is designed to concurrently drive down in-program costs, expand accessibility and make the overall program safer, Birenbaum added.
“We’re really trying to offer consistent, safe, dependable medicine that’s more accessible,” he said.
For the private sector, the proposed expansion signals a potential boon for entrepreneurs eager to profit from the industrialization of a nascent market that’s rapidly growing patients. It could also lay some groundwork for the eventual legalization of recreational marijuana, should lawmakers decide to join a growing number of states, including Maine, Massachusetts and Vermont.
But Rhode Islanders already participating in the medical program are concerned the market will not support an expansion, especially as the Bay State inches closer to allowing the commercial sale of recreational marijuana beginning July 1.
“Border communities [such as] Attleboro and Fall River will be destinations for people to purchase many of the same products they could buy at our facility,” said Chris Reilly, a spokesman for Thomas C. Slater Compassion Center Inc., a compassion center in Providence.
Because the federal government considers marijuana to have “no accepted medical use,” under the Controlled Substances Act, the Rhode Island medical-marijuana program has gone through some growing pains since the General Assembly first passed legislation allowing it in 2005.
After the program became permanent in 2007, the state allowed qualifying patients and caregivers to grow the medicine at home. Administered by the R.I. Department of Health, the program was essentially unregulated, as the state allocated no staff or funding toward regulating it until compassion centers could operate, beginning in 2009.
The setup was ideal for caregivers and patients, who could grow their own medicine at a low cost, and home-growing operations began cropping up with little-to-no-involvement from the private sector.
Today, home-growing operations account for about 60,000 tags issued by the state (comprising one mature plant and one immature plant) compared to 10,000 tags at licensed facilities. By some estimates, each homegrown tag has the potential to produce about $4,400 worth of marijuana each year and the licensed facilities’ tags can yield much more due to the controlled environment. Patients and caregivers have argued for the homegrown-to-licensed-facilities ratio to be maintained.
“We need to allow this program to run as it has been, not to make it more complicated,” said Ellen Lenox Smith, a patient and caregiver from Scituate. “Why replace what is not broken?”
But regulators and law enforcement insist the program is broken and have proposed a slew of changes to limit home-growing operations.
The lax oversight of home-growing operations, Birenbaum explained, has resulted in bad actors setting up commercial-size operations and selling illegally outside of the program. The state’s proposal would reduce the allowable limit of tags for home-growers to eight, from 12.
“There’s a reason we have the highest per capita [marijuana] use in the country,” Birenbaum said.
The program also allows for “gifting,” which permits participants to give away excess marijuana to other patients. Patients and caregivers argue the gifting gives patients with low incomes access to otherwise expensive medicine. Law enforcement sees it as a gateway to illicit behavior. The state has proposed eliminating gifting and the R.I. State Police has endorsed the decision.
“[The] change would make it harder for children and teens to get marijuana,” wrote Col. Ann C. Assumpico in a letter to lawmakers.
Despite all the issues raised surrounding home-growing operations, however, state officials are not seeking to entirely eliminate the cottage industry. Instead, the strategy is to expand private-sector involvement, which Birenbaum predicts will increase competition, expand access and drive down costs.
“By expanding the number of compassion centers, we think, it will create a stable and robust market that serves patients,” Birenbaum said. “Making it more accessible is going to be far more effective in combating this less-regulated supply than simply outlawing the homegrown operations.”
The three current compassion centers can sell medical marijuana similarly to how pharmacies sell pharmaceuticals. Unlike home-growing operations, the centers are closely regulated by the state and generate tax revenue through the 7 percent sales tax and an additional 4 percent surcharge. (The state currently collects no tax from home-growers and does not record caregiver-to-patient sales).
At the same time, the state wants to create a manufacturing license, which would be required of any entity making medical-marijuana products, such as edibles.
Beyond the goals of expanded access and lower costs, the state’s proposal would also give more business to licensed growers known as “cultivators,” who would welcome more compassion centers to supply.
Raimondo in 2016 used her budget to establish licenses for cultivators, which are businesses that grow marijuana exclusively for compassion centers. The private sector jumped at the opportunity and 117 aspiring entrepreneurs have applied for cultivator licenses. The state has since issued at least 25 licenses and tentatively approved about 40 more. The rest are awaiting consideration and there’s currently no limit to how many can be approved.
CULTIVATING AN INDUSTRY
Karen Ballou and Beth Charlebois were among the first 10 business owners to receive a cultivator license. The duo was already selling as caregivers, which would no longer be allowed to sell to compassion centers, so they took a leap of faith, paid the $5,000 application fee and started Cultivating RI LLC.
“We believe in it,” Charlebois said during a recent tour of the operation.
The small business, which has eight employees and volunteers, operates out of the second floor of a West Warwick commercial building. The highly controlled and closely monitored space was defunct for decades before the duo invested their own money to renovate it.
Fans hummed in the background as LED lights shone brightly overhead, all constant reminders of the monthly $5,000 electricity bill. The cannabis is grown in various rooms, following strict tracking guidelines. Cultivators, unlike home-growers, are regulated and must account for product through a so-called “seed-to-sale” tracking system, which law enforcement applauds for purposes of tracking the drug.
Ballou and Charlebois see no difference between their cultivation business and any other manufacturer in the state, and they want to contribute to the local and state economy.
“We’re working in the town we live in and we’re hiring local vendors,” Ballou said. “We’re doing all the right things to support the Rhode Island business community.”
But the state may have put the cart before the horse, to some degree, because while there’s plenty of interest in becoming a cultivator, there isn’t much in the way of opportunity when it comes to selling the product because there are only three buyers in the legal market: the compassion centers.
“Due to a lack of outlets to sell to, [compassion centers] have a tight hold on the market and price accordingly,” said Ryan Holt, a spokesman for the Rhode Island Cannabis Association, which represents more than 20 cultivators. “As it exists today, the program is flawed. Access is not what it should be, and prices are out of control. Bottom line: It’s not sustainable. … Without any expansion, the program and the cultivators will cease to exist.”
J. Russell Jackson is a lawyer for Coastal Farms LLC, a cultivator that acquired land in Richmond to develop and build. He said the state has allowed regulated growers to join the program but has done little to allow for them to succeed.
“As a result, there is a bottleneck in the market,” Jackson said. “Allowing this market condition to continue gives these three entities too much power and market influence in the program.”
The compassion centers – for the most part – also cultivate, which adds to the growing saturation of licensed product.
Rep. Scott A. Slater, D-Providence, is a proponent of legalizing recreational marijuana and isn’t impressed with the proposed expansion of the medical-marijuana program. The proposal, he said, is a knee-jerk solution to a self-made problem.
“This is in response to a problem we created last year,” he said. “We created all these cultivator licenses and we now need to find a way [for them] to distribute.”
Slater said the problem could be solved if lawmakers would follow Massachusetts’ lead and legalize a recreational market.
“That’s the only way you’re getting to address the fundamental issues with the program right now,” he said.
Charlebois and Ballou largely agree and feel like everything the state was doing in terms of regulating the market pointed toward imminent legalization of a recreational market.
“We were led to believe that cultivators were being set up in the state to get ready for the recreational market – for this industry to become fully recreational,” Charlebois said. “Everything was moving in that direction.”
Indeed, the legislature last year was entertaining multiple marijuana-related bills, including one to legalize the recreational market. The state instead set up a special commission to study the issue. The group was supposed to make recommendations this year but has since decided to wait until next year – after the November election.
Rep. Antonio Giarusso, R-East Greenwich, is a member of the House Finance Committee and the special commission. He sees all the regulations in the medical program as simply a precursor of what the Democrat-led administration is planning next.
“Is this just a prelude to recreational marijuana?” he asked rhetorically. “[The administration] wouldn’t admit to it, but in my heart of hearts, that’s where I think they’re heading.”
The compassion centers, meanwhile, are concerned about the addition of so many new competitors under Raimondo’s proposal, especially at a time when there’s such a robust and easily accessible homegrown market.
“To go from three to 15 will ensure that one of the existing centers, maybe two, will go out of business,” said Seth Bock, CEO of Greenleaf Compassionate Care Center Inc. in Portsmouth.
When asked about Bock’s comments, Birenbaum said the state is comfortable with that potential outcome.
“I completely understand from a business standpoint that less competition in the market is better for them in terms of dollars and cents,” he said. “But we’re all about patient demand right now and meeting that demand. If we get 15 compassion centers and two or three of them go out of business because we could have met the demand with 12, I think at the end of the day that’s a better scenario than if we only add another three to four compassion centers and the demand warrants [more].”
Opponents, however, question whether the state’s projected demand is realistic, especially as Massachusetts gets ever closer to allowing the commercial sale of recreational marijuana.
But R.I. expansion supporters are convinced the number of patients will nearly double once the state adds acute pain as a qualifying condition. This part of the proposal has widespread support.
“I’m all for the acute-pain proposal,” Bock said. “It will help people avoid opioids.”
The causes of acute pain are broad, but some examples include surgery, broken bones, dental work and burns or cuts. Pain-alleviating medicine, including highly addictive opioids, are often prescribed to mitigate such pain.
The state is now proposing to give doctors the legal authority to recommend patients use medical marijuana as an alternative.
“The real goal for this is to provide a tool and resource for physicians,” Birenbaum said. “We’re trying to give people options.”
If effective, it could help the state curb overdose deaths, an issue it’s deemed a public health crisis. The state recorded 323 drug-overdose deaths in 2017.
Additionally, allowing marijuana to treat acute pain could nearly double the number of medical-marijuana patients participating in the program.
The R.I. Department of Health in 2016 counted 182,663 prescriptions for opioids. Based on clinical trials, budget officials estimate about 44 percent of patients would opt to use marijuana as a substitute to opioids if legal. The state then estimates about 20 percent of that amount would go through the trouble of actually getting a medical-marijuana license.
If the state’s math is accurate, about 16,074 new patients would join the Rhode Island medical-marijuana program within one year of allowing the licenses, representing an 83.3 percent increase compared with the current 19,299. Birenbaum argues that if they don’t expand the commercial side of the program, the influx of new patients will only continue to fuel the market for homegrown marijuana.
The outside business community, meanwhile, is watching the process with interest and concerns. Workplace safety has been raised as a concern in the past, and Laurie White, president of the Greater Providence Chamber of Commerce, said the medical-marijuana program has opened employers up to new types of liability.
“Our issue isn’t with the expansion of the medical-marijuana program, per se, it is with the employers’ inability to ensure that they have safe and drug-free workplaces,” White said. “Due to the portion of the medical-marijuana law that has been interpreted by the R.I. Superior Court … prospective employees can sue their prospective employers if they are not hired due to their status as a medical-marijuana cardholder.”
The legislature is separately considering whether to codify the Superior Court decision into law, which the Chamber has opposed.
As part of the medical-program expansion, the state will not allow out-of-state physicians to approve in-state licenses, which the health department said will give it greater oversight and regulatory authority over physicians participating in the program.
The move would curb business for doctors along the Rhode Island border, who receive a couple hundred dollars for every recommendation into the program. While state officials don’t want out-of-state physicians participating in the program, they do want to provide services to out-of-state medical-marijuana license-holders to purchase marijuana from local dispensaries.
The state estimates allowing such “reciprocity” could add an additional 709 patients from Connecticut and another 2,399 patients from Massachusetts into the program.
Patient growth is key to Raimondo’s revenue projections. Nonetheless, Birenbaum insists the proposed expansion isn’t about raising revenue, but rather fixing problems and creating parity with other medical programs throughout the country.
Program participants, however, find it difficult to ignore the fact that the expansion is proposed as part of the governor’s budget, which – in basic terms – is a revenue-raising piece of legislation.
Likewise, the proposal would generate $5 million more than what’s required to run the program, making it look like a profit-making business – similar to the state lottery system – rather than a medical program.
The dynamic isn’t lost on some patients, who feel like they’re watching industrialization in real time.
“This program was once just about patients,” said JoAnne Lebanon, executive director of the Rhode Island Patient Advocacy Coalition. “It was once just about wellness. Now it’s suddenly about industry … and patients are being seen as a source of revenue.”