MU study: State doesn't need as many medical marijuana licenses

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COLUMBIA - The Department of Health and Senior Services released its draft applications for medical marijuana facility applications Wednesday, but a new study shows the state might not need as many suppliers as currently planned. 

Voters passed Amendment 2 in November. The law requires the state to give out more than 300 business licenses for Missouri's medical marijuana industry. This includes at least 60 for cultivation, 80 for manufacturing and 192 for dispensaries. 

However, an MU study suggests the law might be over-shooting the demand for medical marijuana. The DHSS asked Joe Haslag, an economics professor at the University of Missouri, to find data to predict the medical marijuana industry's supply and demand. 

"The key force is how many patients are going to have qualifying conditions and become cardholders, and then how many of these growers and dispensaries do you need to meet their needs," Haslag said.

Haslag's study showed the state would need: 

  • Between 10 and 14 cultivators in 2020, 18 to 24 cultivators in 2021, and 24 to 29 cultivators in 2022
  • 115 and 132 dispensaries by the year 2022

He said he used data from 19 states before 2015 to determine the number of medical marijuana patients Missouri might see. 

Based on his research, Haslag predicts there will be about 22,5000 over the next few years. That's less than .5% of the state's population. Others do not agree with that finding. 

"What we’re seeing from some of the advocacy groups is they’re jumping to 2% of the population, but the evidence is really clear that it takes a while for most states to begin to see the fraction of the population that grows for 3-5 years," Haslag said. 

One of those advocacy groups is the Missouri Cannabis Trade Association. Jack Cardetti, spokesman for MoCannTrade, said Haslag's study dramatically under-estimated the number of potential patients. 

"There’s one fatal flaw in that data that essentially then corrupts the rest of the study. The flaw really comes in when the economist relies on really old, really stale data to try to predict how many Missouri patients will have a medical marijuana id card," Cardetti said. 

Cardetti said MoCannTrade has predicted to see nearly 2-2.5% of Missouri's population become a medical marijuana patient. He said the trade association is excited to see analysis of the medical marijuana industry, but said the 4-year-old data is not applicable in today's industry.

"The professor themselves, they know this is a problem, because they used old data and they’re under-counting the possible patients here," Cardetti said. 

Haslag said he understands the idea that his prediction might be too low. 

"Any time you do a forecast, you’d be a fool not to say, of course, I could’ve under- or over-forecasted what’s going on," he said. 

Haslag said he struggled to find data he needed in the time frame he was given to produce the study.

"Had I been able to get the data easily from these states across time and across states, I would’ve done a much better job on it, but given the structure I had, I’m comfortable putting forward the number that I have," he said. 

The study states a 66% confidence in its findings. Cardetti said most studies should provide nearly a 95% confidence. 

"Essentially, what 66% confidence means is that I’m slightly more confident than a coin flip that number will be correct," Cardetti said. 

The Department of Health and Senior Services said the study provided good information and it appreciated the work Haslag put into it. At the time of this report, the DHSS director had not extensively looked at the study. 

Lisa Cox, the chief public information officer with the DHSS, called the study "helpful, but debatable." 

Cox said the department must comply with the standards of the law and will give out the required number of business licenses for cultivation, manufacturers and dispensaries.

As of Wednesday, the DHSS received 478 application fees for those planning to apply for a facility license in August.

The DHSS plans to request proposals for an independent scorer for the applications this month.