Nick Brozman hadn’t touched weed for the better part of a decade. But two and a half years ago, after medical marijuana became legal in New York, Brozman’s doctor recommended he try it, to reduce the amount of opioids he was taking to alleviate his chronic pain. A cornucopia of medical issues have plagued the now 35-year-old, so he was intrigued but dubious.
It all started with scoliosis when Brozman was young. Over the years, his spine continued to deteriorate to the point it was basically collapsing upon itself. It got so bad that part of his spine was problematically close to his kidney.
“My spine looked like cooked spaghetti,” says Brozman, a marketing professional. “It just was mush.”
Doctors were able to set Brozman straight through a surgery, in which they built a cage-like structure that fused his spine in place from the bottom of his skull to right above his waist. But then came another hit: He was later diagnosed with arachnoiditis, a pain disorder typically caused by the inflammation of one of the membranes that surrounds and protects the nerves of the spinal cord. The condition required even more surgeries, after which Brozman spent almost a year in an outpatient program at Burke Rehabilitation in White Plains, relearning how to walk.
“I made a full recovery, but it’s a very painful condition,” says Brozman.
To combat the intense day-to-day pain, he was taking a growing cocktail of opioids. As he began trying to wean himself off the pills he had become immune to, his pain-management doctor suggested he try medical marijuana and referred him to a colleague, who wrote Brozman a certification. So, after registering with the state and obtaining his registry card, the White Plains resident drove five minutes down the road to Vireo Health, a medical-cannabis dispensary that sits on the t-bone corner of East Post Road and South Broadway.
Medical marijuana companies are grappling to survive, thanks to too few patients, even fewer doctors willing to prescribe it, and overhead costs that make products prohibitively expensive…
The building is inconspicuous, to say the least. There’s no façade and no pronounced signage. You’d have to be looking specifically for that building — or, better yet, the few square inches on the door that holds the company’s decal — to find it. In fact, it just may be the most mundane building on that stretch of road right off of Mamaroneck Avenue, a notion that proves New York Assembly member Richard Gottfried (D-Manhattan) was right all along. “A dispensary will be about the most boring thing in town,” Gottfried said when he spoke to Westchester Magazine back in 2015. Gottfried, one of the most vocal and active supporters of legalized medical marijuana in the New York legislature, made that statement mere months after Governor Andrew Cuomo signed into law the Compassionate Care Act, a bill Gottfried had fought for for more than a decade.
But that’s not the only bit of Gottfried’s foresight that proved correct, as he also bemoaned the bill’s restrictive nature. The bill that was passed (signed by Governor Cuomo in July 2014, put into effect in January 2016) looked something like this: Only those diagnosed with cancer, HIV infection or AIDS, amyotrophic lateral sclerosis (ALS), Parkinson’s disease, multiple sclerosis, spinal-cord injury with spasticity, epilepsy, inflammatory bowel disease, neuropathy, or Huntington’s disease could qualify for treatment; patients, who need to be certified by their practitioners as eligible, must apply to the Department of Health to obtain a registry identification card, which they’ll need in order to obtain medical marijuana; and the bill allowed only for five licensed companies to each establish one grow facility and four dispensaries throughout the state to produce and sell oils and capsules containing CBD and THC (the chemical properties of marijuana), as the smoking of marijuana remains illegal. In 2017, five more companies were added as the bill now allows.
New York Assembly member Richard Gottfried has proposed legislation that will help bring down costs for both patients and providers. Photo: New York State Assembly Photography
As it turns out, those myriad restrictions have kept New York’s legal medical cannabis program hamstrung from the get-go. What the original bill created was an industry in which companies, including two operating in Westchester (Vireo in White Plains; Etain Health in Yonkers), are grappling to survive, thanks to too few patients, even fewer doctors willing to prescribe it, and overhead costs that make products prohibitively expensive to some that are looking for relief.
As a result, the Vireo dispensary in White Plains isn’t exactly a hub of activity. Brozman is one of 100 or so patients who shuffle in and out throughout the month. He visits the dispensary once every 10 days to pick up his medications —or when he is bedridden, he uses Vireo’s free home-delivery service. His Vireo medications have helped him do a lot of the things he’d long wanted to but couldn’t because of his back. “I was able to begin exercising and actually stick to it, because it brought my pain down enough where by building muscle I was actually preventing further pain, strengthening my core, strengthening my back and my upper body again,” he says.
Medical Marijuana By The Numbers
While medical marijuana has been near miracle-like for patients like Brozman, the industry continues to falter because of a lack in demand. According to figures supplied by the New York State Health Department in October, there are only 4,351 patients in Westchester, making it the fifth-largest patient pool in the state, behind Erie, Suffolk, New York, and Kings counties. Westchester patients comprise just 5.6 percent of the nearly 78,000 certified patients across the state.
That number, though, is a bit deceiving. Only about half of medical marijuana patients are repeat customers, according to data released by the Department of Health. Many patients cite the exorbitant costs of medications, which can range from $100 to $400 per visit out of pocket, as no insurance companies in the state are willing to cover medical marijuana.
High cost is one of the main reasons why Kate Hintz, whom we spoke with back in 2015, has yet to enroll her daughter, 7-year-old Morgan Jones, who suffers from intractable epilepsy, in the New York State program. Instead, she orders for her daughter Hailey’s Hope, a CBD oil from Colorado. “The prices in New York are just so high compared with what they are in other states,” says Hintz, who, when medical marijuana became legal here, did a cost analysis of her own to compare products. “CBD products comparable to what Morgan uses are 11 cents per milligram in Colorado; in New York, similar products start at 30 cents and go all the way up to $1.10 per milligram,” she says of the 2015 costs.
That’s why Gottfried is working to bring down costs with a host of proposed legislation. “I have a bill that would allow registered organizations to contract out for parts of the growing, production, and distribution processes, which would help them function more like ordinary businesses and lower costs,” he says. Additionally, he’ll be “introducing legislation to add medical marijuana to the Medicaid program, though it would have to be funded by state-only dollars, without the usual matching funds we get for Medicaid expenditures.”
“Medical marijuana is the only drug where the state does not defer to medical professionals to decide which medication is appropriate for which conditions.”
—New York Assembly member Richard Gottfried (D-Manhattan)
Costs aside, the few patients who are registered don’t have many options to get prescriptions in the first place. That’s because, so far, only 110 doctors across Westchester have enrolled in the program, which is still nearly 6 percent of the state’s 1,858 registered medical-marijuana practitioners. That’s a dismal number, considering there are roughly 75,000 physicians in the state.
Lawmakers and industry insiders see a number of reasons for the lack of participation. For one, practitioners have to enroll and pay for a course to be eligible to recommend medical cannabis to their patients. To help incentivize doctors, the state cut the course in half, from four hours to two. Another reason, some say, is that under federal law, marijuana remains illegal, even for medical purposes, and doctors don’t want to butt heads with federal officials. Vireo, for its part, is working directly with doctors in the area to get them on-board and enrolled in the program. “I’m on the phone with and visit doctors all the time to explain the scientific nature of what we do, to give them the best information we can to get them onboard,” says Stephen Dahmer, MD, chief medical officer for Vireo.
As the industry continues to try and find its footing, companies are failing to make any type of profits. “It’s certainly been a struggle,” says Dahmer. Vireo Health of New York’s CEO, Ari Hoffnung, goes even further, saying last year, no company involved in medical marijuana in New York State had made a penny in profits. More recently, he says, “While New York’s medical marijuana market is economically headed in the right direction, it is still very small compared to other states, and operators, like Vireo Health, remain far from recouping their investments.”
Though neither Vireo or Etain would disclose official numbers, state and local tax records help paint a bleak enough picture. According to state tax-collection data, the five original companies licensed under the state’s medical marijuana program brought in a combined $16 million before any taxes, expenses, or other overhead costs were paid, from April 2016 to August 2017. New York State, which charges the companies a 7 percent excise tax on all sales, collected $585,000 during the 2016-2017 fiscal year. Considering the fact the state projected taxes of $4 million in marijuana revenue in 2016-2017, the companies are performing well below expectations.
Westchester took in just $40,000 in taxes from the sale of medical marijuana in 2017, according to numbers provided by the county executive’s office. While those numbers are expected to rise, the county is only on pace to collect around $55,000 for 2018.
Vireo, which runs a dispensary in White Plains, offers oils, capsules, and other medical marijuana products.
There have been some efforts, mostly by lawmakers like Gottfried, to make the program less limited in scope, and therefore, more profitable. For example, the state has expanded uses for medical marijuana to include chronic pain, PTSD, and to replace opioids in some instances. While that’s resulted in thousands of new patients enrolling in the program, Gottfried would like to see further progress. “Medical marijuana is the only drug where the state does not defer to medical professionals to decide which medication is appropriate for which conditions,” he says. “I have a bill that would remove the conditions list, putting medical decisions back in the hands of practitioners, who know their patients best and whose judgment the law respects for much more dangerous drugs.”
But it’s not only the present limitations of the program these companies are contending with. They also have to confront the growing likelihood of the full legalization of recreational marijuana, something some lawmakers see as being only a year or so off in New York. That, some say, could be a death blow to the already struggling medical-marijuana industry, as many patients would instead opt to buy the cheaper, smokable form of the product.
“There are probably some patients in the medical program who could find appropriate products cheaper under an adult-use program — for example, someone who wants to smoke marijuana for pain, which is actually prohibited under the medical program’s prohibition on smoking, and has to buy a much more expensive pharmaceutical product,” says Gottfried.
Dahmer, though, doesn’t seem too worried, saying that he doesn’t “think too many patients will leave us. We offer scientifically, medically based products that help patients in ways smokable forms won’t.”
Despite the industry’s many shortcomings, Brozman offers perhaps the best argument for why companies like Vireo may succeed in the long term: “Vireo’s products have really allowed me to live my life in a way that I didn’t really think was going to be possible.”
Scott Simone is a Brooklyn-based investigative journalist and managing editor of The Hatch Institute, a nonprofit center dedicated to enterprise reporting and journalism education.