The number of medical marijuana patients in Texas has quadrupled since 2021. However, Medical Marijuana companies in Texas are still finding it difficult to keep up with the rapid growth of patients, the current 1% THC cap restrictions, and the competition from the thriving marijuana markets in Texas’s neighboring states, Oklahoma and New Mexico.
Due to the numerous restrictions in Texas, the state hasn’t been able to develop into a full-fledged medical marijuana market, costing the state significant tax revenues which other states gain from the medical marijuana markets.
Marijuana advocates say the biggest obstacle that the industry faces is Lt. Gov. Dan Patrick, who has used his position and power within the nation’s second-most populous state to kill any marijuana reform measures. However, the fall elections could change that dynamic.
The Long Game
Medical marijuana companies within Texas have to resolve to play the long game, find creative solutions and ways to serve customers, and create business models to adapt to a less restrictive and more robust market in the future.
For example, the current regulations allow an operator to store medical inventory at only one location. In response to this regulation, two of the three licensed businesses within Texas are offering pickups a few hours each week at local physicians’ offices and other pickup locations across Texas.
Lisa Sewell, director of operations for Texans for Responsible Marijuana Policy – a coalition working to reform marijuana laws within the state – stated that “by opening pop-pup locations, the licensed operators are able to expand their delivery efforts.”
“We have to be creative because of the regulations,” explained Morris Denton, CEO of Manchaca-based Texas Original Compassionate Cultivation, a Texas-founded and leading Medical Marijuana operator in Texas.
Denton further explained that they are only increasing their losses if they can’t figure out a way to be more efficient.
The only other licensed Medical Marijuana operators within Texas are Parallel/Surterra Wellness (Atlanta-based), operating under the name Goodblend, and Fluent ( Florida-based).
Impressive Medical Marijuana Patient Growth
According to the patient registry operated by the Texas Department of Public Safety, the number of medical cannabis patients totaled 26,687 in May 2022, more than quadrupling the meager 6,051 medical patients recorded in May 2021.
The medical cannabis program has seen this growth in the past year after lawmakers increased the THC limit from 0.5% to 1% and added cancer and PTSD (post-traumatic stress disorder) as qualifying conditions for patients to enter the program.
Chronic pain, a primary leading medical reason for sales of medical marijuana, isn’t at this moment a qualifying condition, resulting in many chronic pain patients having to visit neighboring states to receive treatment.
With patient growth and Texas’ Compassionate Use program, there currently aren’t enough sales to offset the upfront costs of the three licensed operators.
Competition From Cross-Border Neighbors
To make things complicated for Texan cannabis companies, more liberal marijuana programs in states such as Oklahoma and New Mexico have cut into sales.
Before New Mexico allowed marijuana to be used for recreational purposes, Texas Original, every other week, made 30-40 deliveries in El Paso near the New Mexico border, according to Denton. However, since New Mexico launched its recreational marijuana program on April 1,the company now only makes 10 deliveries every other week.
The 2023 legislative goals include;
- Removing the THC cap or at the very least increasing the cap from 1%.
- Allowing doctors to recommend medical cannabis as an alternative to opioids.
- Adding chronic pain as a qualifying condition to the medical cannabis program.
Medical marijuana companies are also pushing to be allowed to store inventory where it makes logistical sense instead of having only one location.
This may be achieved through the regulatory process and without legislation.
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