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Investors Are Realizing That New York’s Medical Marijuana Industry Will Be Limited


new york cityIf you are a loyal reader of this blog, than you know that I always rail against limited medical marijuana programs, and the people that invest in them. Investors don’t like investing in saturated markets where the barrier to entry is low. They want to land contracts in states where the barrier to entry is very large, and the licenses are very limited. Many, many investors have told me that. They feel it gives them ‘an edge.’ The thing that they always overlook is that just as some states program’s limit the number of business licenses, so to do they limit the amount of people that can become patients, and can even limit the forms of medical cannabis that the patient can consume.

The case that I always offer up is Illinois. People were scrambling to get a medical marijuana business license in Illinois, and were only looking at the size of the population of the state, but not the details of the legislation that legalized the medical marijuana industry. Many companies forked out as much as one million dollars to compete for a license, just to now find out that 2,800 patients for the entire state does not pencil out well when these companies are crunching the numbers. The word is getting out in other states that the ‘lucrative business licenses’ in these limited states aren’t so lucrative after all. Per Marijuana Business Daily:

Companies spent millions of dollars combined trying to win one of New York’s five coveted medical marijuana business licenses, but investors aren’t exactly bullish on the market’s potential now that permits have been awarded.

Many institutional investors are concerned with state limits on the MMJ industry in New York, expressing concerns that each licensed company can only have four dispensaries statewide (for a grand total of 20 storefronts) and that the qualifying medical conditions list is relatively short.

“We believe it’s going to be an extremely limited market,” the CEO of Invest in Cannabis told the New York Business Journal.

The investment firm has 24 companies across the nation in its portfolio and is based in New York City. Yet the CEO sees the state’s market potential as “pretty small because of… the amount of customers that actually have the potential to enter the market.”

What these companies need to do is to not just focus on profit margins, and instead fight for reform. They think that it’s lame that they can’t make as much money as they had hoped. But imagine how much more it sucks to be a patient that has to go without medicine because he or she suffers from a debilitating condition that isn’t covered by many states deficient medical marijuana laws. These companies should be fighting for those types of patients. Not only is it good business, it’s good for the greater cause of helping people. But instead they let others fight the hard battles, then come in on the tail end when there are business opportunities and try to push everyone else out.


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Johnny Green


  1. I don’t get what all those politicians are so scared of on the east coast, oh wait a sec, maybe they are scared to lose out on huge donations from big pharmacy against a plant that will replace many of their insanely overpriced and often toxic drugs

  2. Lawrence Goodwin on

    p.s. In addition to “investors,” many advocates and potential patients do complain loudly about the CCA’s onerous restrictions. But they have every right to pick up a pen and write Dr. Howard Zucker, Gov. Andrew Cuomo, or whichever obstinate public officials they wish. New Yorkers, who by law do not enjoy citizen initiatives on Election Day and are entirely subject their whole lives to the whims of lawmakers and bureaucrats, must demand a better medical cannabis program. I actually watched some talented ladies and men from all across New York get the CCA passed. They were a CONSTANT presence in the NYS Capitol building from day 1 of the 2014 legislative session (first week of January). Breast and various other cancer survivors. Mothers pleading for cannabis oil to treat their daughters’ and sons’ wretched seizures. People with fibromyalgia and ‘chronic’ pain. Doctors. Nurses. And none of those advocates, for the sake their loved ones, have given up. The struggle has merely begun. The more citizens in New York who take the time to ACT, the merrier.

    Besides, once these new medical products do become available next January, it won’t be long before New Yorkers recognize how cannabis remedies should never have been prohibited in the first place. It’s a prime example of modern tyranny, worthy of criminal charges against any public officials who prolong the very real physical and mental suffering among at least 1 million New Yorkers.

  3. Cannabis is the most useful plant on the planet, food, clothing, shelter, energy, medicine, insight, re-creation. any law against it is a crime against humanity, Big business and politicians conspired to make it illegal in order to crush competition, even changing the name and making up wicked lies to make it illegal. And they also did it thru the united nations on an international level. The people are waking up- continue to spread the truth and wake up the people

  4. Block cheese.
    20 retail shops ? That won’t be enough for Brooklyn.
    This program is designed to FAIL
    While eliminating home grows and access to whole plant cannabinoids this program is designed to make a few people rich.
    This program only encourages black market sales which will beat anything these Co produce and is available 24/7
    The sad thing here is they still treat cannabis like a dangerous drug.
    What’s going to happen to these Co when over regulation makes the product “too expensive ”
    The bottom line is access ,I can walk to over 50 shops in LA.
    CAL prop 215 was written so anyone can have medical access
    N.Y. MMJ was written by prohibitioniost
    Too bad the seniors and sickly people won’t get access

  5. Lawrence Goodwin on

    New York’s 2014 Compassionate Care Act (CCA) gave full control of the state’s medical “marihuana” program to the Department of Health’s commissioner. The commissioner, presently Dr. Howard Zucker, is efficiently managing the process–that’s according to state Senator Diane Savino, one of two truly compassionate CCA champions. It explicitly mandated that applicants come up with a $10,000 non-refundable application fee, plus a $200,000 fee, which was refunded to ALL 38 losing applicants out of 43 total. Applicants had to prove that they could acquire and finance adequate medical cannabis production facilities, including very tight security. The victorious 5 scored well over 90 percent in a “rigorous” review process. Let us be grateful, at least, that the door to RE-legalized cannabis cultivation in New York has finally been cracked open.

    Regarding the sentence, “What these companies need to do is to not just focus on profit margins, and instead fight for reform”: Each of the 5 companies is required by the CCA to start growing cannabis plants immediately until full maturity, and to then extract from their seedless, female flowers the coveted medicine for the patients. Imagine how many small fortunes it takes for just 1 company to grow, say, 10,000 cannabis plants in a warehouse, and to produce non-smokeable, pharmaceutical-quality medical products by next January? Patience, indeed.

  6. PhDScientist on

    Everyone who reads this blog should read the editorial in the New York Times about the fact that the President and Congress are moving way too slowly and should call the White House comment line and their Senators and Representative in Washington first thing Monday Morning.

  7. PhDScientist on

    We need full legalization of Medical Marijuana at the federal level now. To quote Dr. Sanjay Gupta — “Medical Marijuana isn’t just ‘good medicine’ — in many cases its the only Medicine that works”

    Medical Marijuana has an incredibly wide therapeutic index and an unmatched safety profile.

    It should be “over the counter” Its safer than NSAIDS, and much safer than Tylenol.

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