Off the Kuff Rotating Header Image

Texas Cannabis Industry Association

The Texas cannabis industry sure is optimistic

I remain more skeptical, at least of their short-term capacity.

“I suspect if you grabbed a random person on the street and asked them if cannabis was legal in Texas, they would probably look at you like you’re crazy and say ‘no,’” said Marcus Ruark, president of goodblend Texas, which is preparing [a site in San Marcos] for its 63,000-square-foot marijuana growing facility.

The notion that it’s “crazy” is because cannabis is still illegal in Texas, which is home to some of the strictest anti-marijuana laws in the nation. But a gradual expansion of the state’s limited medical marijuana program in recent years could soon give way to an industry that’s accessible to a broader swath of Texans.

While still relatively low, the number of Texans utilizing the state’s medicinal marijuana Compassionate Use Program has grown by 180 percent over the past year. Some estimate there are about 2 million Texas patients eligible to use cannabis, but many just don’t know about the program.

“So we’ve started making an investment in that and getting the word out and increasing awareness, and I think that’s definitely helping,” Ruark said.

For now, goodblend Texas is one of only three companies licensed to cultivate and sell marijuana in the state. The others are Texas Original Compassionate Cultivation and Fluent, which is a subsidiary of Cansortium, a publicly traded marijuana holdings company.

Statewide, just over 300 physicians are licensed to prescribe medical marijuana. And as of March, there were only 4,919 patients registered with the Compassionate Use Program, according to the Department of Public Safety. A year earlier, just 1,757 people were registered to use medical marijuana in Texas.

The number of medical marijuana patients in the state is “growing about 10 percent month over month every month, so it’s actually pretty robust growth for the patients who are accessing the program,” Ruark said.

While steadily increasing, the number of Texas patients pales in comparison to what’s seen in nearby states such as Oklahoma, where roughly 8 percent of the state’s population — over 300,000 people — are medical marijuana patients, according to the Washington, D.C.-based Marijuana Policy Project. In Louisiana, which has a population less than one-fifth of that of Texas, there were 4,350 medical marijuana users at the end of 2019.

Still, the growth in numbers of Texas patients utilizing medical marijuana is prompting the $25 million investment by Parallel, the parent company of goodblend Texas, to build in San Marcos.

That’s a good growth rate, but one of the reasons why the growth rate is so high is because it’s starting from such a small base. If the number of patients registered with the Compassionate Use Program were to grow at an annual rate of 200% from the point given above, it would take almost three years to get to 100,000 patients. It will take more than that $25 million invested in a pot farm in San Marcos to make that happen, and they’re going to need bigger numbers than that to really make some money.

Even with the medical marijuana patient count already growing, a bill passed last month by the Texas House would massively expand the pool of patients eligible to use cannabis.

House Bill 1535 would allow patients suffering from chronic pain, post-traumatic stress disorder, cancer or other conditions approved by the state health department to be treated with medical cannabis. The bill was sponsored by Rep. Stephanie Klick, R-Fort Worth.

To become law, it still must clear the Senate and be signed by Gov. Greg Abbott.

It would be a small step toward changing Texas’ status as one of the most restrictive among the 47 states that allow medical marijuana programs. When the Compassionate Use Program was created by the Legislature in 2015, it initially allowed only patients with intractable epilepsy to be treated with marijuana.

In 2019, another bill allowed those with particular diseases, such as autism and incurable neurodegenerative disorders, or people with terminal cancer, to be eligible.

HB1535 was passed out of the House on April 29, and received by the Senate on May 3. I have no idea what fate awaits it in the Senate, but as we have discussed before, the Senate in general is more hostile to any loosening of existing marijuana laws, including medical marijuana, and Dan Patrick has given no signal that he intends to allow a bill like HB1535 to come to the floor, let alone pass. Yet every cycle we get this kind of blue-sky, if-only reporting, in the same way we get breathless stories about casino interests spending money to pursue the same doomed expansion they’ve been seeking for at least the last 20 years, and I just don’t get it. I say this as someone who would like to see full-on decriminalization – indeed, I want to make that a campaign issue – but also as someone who needs evidence to buy into the idea that Things Really Are Different This Time. Wishing and hoping and a pot farm in San Marcos will only get you so far.

More medical marijuana requested

This was a pre-Harvey story.

Medical cannabis companies and investors are calling on Gov. Greg Abbott’s office and the Department of Public Safety to approve more dispensary licenses beyond the three given provisional approval in May.

In a pair of letters this week, the coalition argues that having just three dispensaries, two in Austin and one in Schulenburg, cannot ensure that patients with intractable epilepsy have easy access to the low THC-chemical strain of the cannabis plant.

The Texas Cannabis Industry Association requested in its letter that a second round of applications be taken for the 40 companies that initially applied for but failed to obtain provisional licenses. The group specifically asks for at least nine additional licenses.

The requested number stems from a recommendation made by DPS’ chief financial officer, who noted in September 2015 that at least 12 dispensaries would need to be licensed to meet the needs of some 150,000 patients with intractable epilepsy in the state.

[…]

In October 2016, DPS officials reduced their recommended number of dispensaries to three.

A DPS memo sent to at least one cannabis company last November stated that the governor’s office had requested the reduction, along with other regulatory changes to the state’s fledgling medical-cannabis program.

The companies and investors who signed the Texas Cannabis Industry letter note that both DPS and the governor’s office “failed to provide a reasoned justification for this arbitrary choice limiting the number of licensees.”

You can see the letter here and some supporting information for it here. This bill was passed in 2015, and we were supposed to have all these dispensaries set up by September 1 of this year. Obviously, there are more important issues to worry about right now, but for those who may have benefited from the passing of this law, this is where it stands now.