In late 2018, Utah legalized medical marijuana, and now it's developing state rules and regulations surrounding the new crop’s production and dispersion.
According to the new law, Utah will only license 10 growers to farm marijuana. These cultivation caps restrict cannabis canopies to be no bigger than four acres outdoors, or more than 100,000 square feet indoors.
Justin Arriola, a cannabis business consultant and advocate told The Salt Lake Tribune that Utah could be setting itself up for a product shortage. Pointing to other state medical marijuana programs, Arriola argued that a lack of inventory has hampered patient choice when it comes to medical marijuana pharmacies.
For example, it is estimated that New Jersey will need to increase the number of cannabis growers to 24 growers from the previous six-licensed growers to supply nearly 180,000 patients by 2022. Connecticut has also faced inventory shortages, as they only have four licensed cannabis growers to develop enough product for 26,000 patients.
“The lesson there is that pretty much always, the amount of market demand is underestimated,” Arriola said.
How much marijuana does Utah need?
According to Utah's estimates and to comply correctly with the recently enacted medical marijuana law, marijuana growers would need to grow 84,292.98 plants on an annual basis.
Assuming those plants produce perfect pot-products, they would offer 10.4 million grams of THC, which is enough to provide approximately 100,000 patients with 2 grams of cannabinoids per week for the entire year.
If those perfect 84,292.98 plants were produced in Utah, it would be the exact amount required to treat patients that qualify for medical marijuana; there would be no surplus or shortage in Utah.
Senior Policy Analyst, Melissa Ure, feels that the size allotments and growing restrictions for the marijuana growing market should produce an adequate amount of product.
“That is plenty of product the first year. In fact, it’s going to be an oversupply if all 10 [cultivators] are growing that much product,” Ure said.
The only potential “hiccup” in the system, Ure argues, is that the timing might be a bit off between when the marijuana pharmacies will open and when product will be available. Ure did say that growers may not be established in time to stock the newly licensed marijuana pharmacies.
The thing about assumptions
Legislators in Utah attempted to find that sweet spot where patients would have adequate access to cannabis without growing enough to create an excess of marijuana supplies that might end up on the illegal drug market.
The state’s agriculture department “liberally” projected patient counts at being 100,000, and assumed that the average patient would consume less than half the THC allowed by the recently passed medical marijuana legislation. Arriola believes the number is going to be closer to 180,000.
While Arriola agrees with the state cap of four acres or 100,000 square feet per license will allow for a relatively large marijuana business operation, Arriola worries that the state hasn’t adequately prepared for dispensing the cannabis.
Currently, the Bee Hive State has only licensed seven private “cannabis pharmacies.” The state central fill pharmacy will dispense the remaining marijuana distribution duties by delivering marijuana orders to local health departments for patient pickup.
Arriola feels that wouldn’t be too difficult for one patient to do but is worried about the majority of patients being able to deal with the lack of available distribution spots. “But now do that 40,000 times. How do you do that?” Arriola asked.