While the medical marijuana industry is booming in many states across the US, startup operations are struggling to survive in New York. Since medical marijuana was legalized in New York last January, industry insiders estimated that the program should be preparing for at least 200,000 patients, but to date only 14,000 have enrolled. Fewer than 900 doctors have signed on to certify patients for the program.
For the five companies selected by the state to grow and produce medical marijuana, the lack of participation in the program is financially disastrous. “Our company is not close to break-even yet,’’ said Ari Hoffnung, president of Vireo Health of New York, which has a grow-op in Fulton County. “And based on my understanding, no one has made a dime here in New York.’’ New York Senator Diane Savino stated that “every single one of” these new businesses “is financially struggling.”
Illinois-based company PharmaCannis has opened a $30 million growing facility in Orange County, but only sells to a few hundred patients. An entire acre of the company's facility is empty due to lack of demand. “I hate to complain about economics because this is and ought to be about patients,’’ said Jeremy Unruh, general counsel for PharmaCannis. “But we’re terrified they’re going to allow new production operations.’’
Despite the lack of demand, the state is planning to grant licenses for five more grow-and-distribution operations. Savino said that the administration has no idea how the medical marketplace works and that adding more growers is “a big mistake.” The five currently-licensed companies agree. “Any of the five organizations could alone supply the entire market as it exists today,” Hoffnung said. “It’s going to be financial devastation not only for the existing operators but eventually for the new ones. What they’re doing is instead of creating more patient access, they’re creating more supply, and that supply is not needed in any way, shape or form.”