Most medical cannabis programs experience a few growing pains when they’re ramping up, struggling with delays, supply chain hitches and the occasional lawsuit.
On top of those typical snags, Utah’s medicinal marijuana industry is in the unenviable position of putting down roots as a pandemic rages around it.
It’s been three months since patients who rely on the once-illicit substance could finally apply for a state-issued card demonstrating their medical need for it. March also marked the arrival of the state’s first medical cannabis pharmacy on Salt Lake City’s State Street, a straight shot from the Utah Capitol, where political battles had raged for years over marijuana.
Pharmacy owners say they’re proud of the program, created after a ballot initiative forced the state Legislature to allow medical cannabis. But they are frustrated with aspects of its rollout.
The software that acts as the backbone of the state’s cannabis program has crashed or otherwise slowed down business too often, they say, and their requests for technical help don’t always receive a swift response. They also complain about a product testing bottleneck that has created gaps on their shelves.
“There’s a slew of product just sitting there from a number of different growers that haven’t gotten test results,” said Narith Panh, chief strategy officer for Dragonfly Wellness, the Salt Lake City pharmacy.
These delays mean pharmacies aren’t able to offer a full array of treatments, particularly raw cannabis flower, he continued.
“We’re constantly out of stock of product,” he said. “As soon as we get it in, we immediately sell out of it.”
Greta Brandt, who helps run Utah’s two other open medical cannabis pharmacies, said her company is running into problems with the software the state has chosen to keep track of marijuana products in the supply chain. Making matters worse, the company, MJ Freeway, isn’t acting quickly to correct these bugs as they crop up, she added.
“I don’t believe that they have enough resources set aside for Utah, and it’s really scary from an operations standpoint to think about when all these pharmacies come online and all the cultivators come online,” said Brandt, president of True North of Utah. “They are just going to be even slower to respond.”
Connor Boyack, a medical cannabis advocate and founder of the libertarian Libertas Institute, said the state’s program as a whole is reeling from the unexpected onset of the coronavirus pandemic, which has thrown off business plans and prevented more pharmacies from opening. But he said he’s sympathetic about the barriers Brandt and Panh have faced so far.
“We certainly share these frustrations and want to make sure that government hurdles are low and infrequent so that the market can respond to the needs of the patients, which is the entire point of this program,” he said. “This is, however, a very young market. We’re basically creating an entirely new industry in Utah.”
The ultimate plan is for private labs to handle the cannabis product testing, a system that is anticipated to streamline the seed-to-sale process. But it takes expensive equipment to check cannabis for safety and analyze each batch for its concentration of THC and other cannabinoids, and no local private labs were equipped and ready for the task when the state’s program launched earlier this year, according to Cody James of the Utah Department of Agriculture and Food.
While the state waits for private labs to ramp up, James said, state agriculture officials have been handling the product testing. The social distancing precautions required to curb the spread of the coronavirus has created another challenge, limiting the number of chemists who can work in the lab at any one time, he added.
Right now, it’s taking seven to 10 working days for product to move through the state lab, estimated James, who helps supervise Utah’s medical cannabis cultivation at the agricultural agency.
Tom Paskett, executive director of the Utah Cannabis Association, said as officials and industry hustled to launch a medical marijuana program in the state, they focused primarily on growing cannabis, putting it into a treatment form and opening pharmacies to sell it to qualified patients. While testing wasn’t ignored, Paskett said, it “wasn’t deemed No. 1 priority right out of the gate.”
Panh said the pharmacy workers who are on the front lines are taking the blame for the crawling pace of resupply. He said he understands patients’ frustration — people rely on medical marijuana treatments to ease their pain and chronic conditions.
“And you guys have nothing? What kind of pharmacy is this?" Panh said patients might wonder.
The pressure on the state’s three existing cannabis pharmacies has only grown with the coronavirus, he added, as Utah patients accustomed to traveling to Nevada dispensaries began turning to local retailers instead.
But James says any new program has hiccups and predicts that relief is coming for upset industry members. Utah agriculture officials recently met with a private lab that seems prepared to take some of the cannabis product testing off the state’s hands, potentially speeding up the process of getting treatments from cultivators to pharmacy shelves, he said. James expects more labs will step forward.
“With all eight cultivators coming onboard and growing and multiple processors coming on and hopefully this independent lab and maybe a few more coming on board," James said, “I think we’re about to hit stride.”
Brandt voiced frustration with problems with the software the state selected to follow cannabis from the time it’s a seedling to the point of sale. The digital platform, supplied by the Denver-based company MJ Freeway, has crashed multiple times since True North opened its cannabis pharmacies in North Logan and South Ogden, she said.
Each crash halts sales, she said, as the pharmacies wait for the system to get back up and running. There are also smaller problems with the software — for instance, products don’t always ring up properly — and she said MJ Freeway is slow to respond to her businesses’ requests for fixes.
Both she and Panh have the perception that MJ Freeway pays relatively little attention to Utah, devoting more of its resources to the larger markets it serves in other states. Moreover, there’s little incentive for the software firm to focus on her company, whose pharmacies operate under the name Perfect Earth Modern Apothecary, because the state has effectively given MJ Freeway a monopoly over seed-to-sale tracking in Utah, Brandt said.
“They’re not necessarily keeping Utah as a priority," she said, “because there’s no competition.”
Other states that have used the MJ Freeway software have reported problems with outages, crashes and hacks, with The Philadelphia Inquirer calling it “chronically glitchy." Utah selected the vendor last year largely because the company offered its services for less than half the price of the other finalist for the state’s five-year contract.
Richard Oborn, director of the health department’s Center for Medical Cannabis, said the system has gone down a few times but reports that “those issues have been addressed quickly.” A program in its infancy is bound to experience a few challenges, he said.
“I don’t think it’s at a point right now where the frequency is alarming,” Oborn said. “But I really empathize with [the pharmacies]. It’s a frustrating situation for them to be in, and it’s frustrating for us as well. But I feel like the times it’s gone down, it’s been quickly remedied.”
A spokeswoman for MJ Freeway did not respond to a request for comment.
Panh said Dragonfly Wellness, the first pharmacy to open in the state, has worked through most of the bugs with the seed-to-sale software. However, he shares with Brandt the sense of being overlooked by MJ Freeway, a particularly unwelcome feeling, given the $100,000 in annual fees he said his pharmacy has to pay for the software.
“We’re paying them a hell of a lot of money,” he said.
That’s on top of the $50,000 to $69,500 cost for a state license to run a pharmacy, Panh noted. With up to 14 cannabis pharmacies allowed in Utah, his retail establishment and the two Perfect Earth locations are at the state program’s vanguard, a position that increases their exposure and requires big front-end investments without an immediate return, he added.
“The first entire month that we were open, we lost a lot of money," he said, “just to keep the doors open.”