Utah Looks to Drastically Change Medical Cannabis Delivery

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Utah Looks to Drastically Change Medical Cannabis Delivery

Medical cannabis patients in Utah can legally accept home delivery of their medicines. As a practical matter, it is not that easy. A number of state lawmakers are hoping to push through a bill that would drastically change how home delivery is accomplished. If they succeed, they could lay the groundwork for other states seeking to improve delivery options.

The bill aims to create what some are calling ‘Amazon for marijuana’. Utah’s licensed medical cannabis pharmacies are wholeheartedly against the bill. Cannabis processors and delivery providers are for it. The bill ultimately becoming law would probably harm pharmacies while being a boon to processors. At the core of the issue is where home deliveries originate from.

Home Delivery Is Necessary

Utah lawmakers approved home delivery a couple of years ago. It was necessary, given the fact that Utah is a largely rural state. Consumers living in the most remote areas would have to drive long distances to get their medicines prior to legalized home delivery. Those living on borders with more friendly states were known to cross said borders, buy their cannabis, and illegally transport it back into the state.

Both advocates and proponents of the recently proposed reform bill agree that home delivery is a good thing. They agree that it needs to continue and that lawmakers need to find ways to improve it. They simply disagree on what this particular bill would do. Again, it goes back to delivery origination.

Originating With Pharmacies

As things currently stand, all medical cannabis home deliveries must originate with licensed pharmacies. Let’s say a patient wants to purchase products from the Deseret Wellness pharmacy in Provo. The delivery must originate from that location. The order must be filled by Deseret Wellness from their Provo location, then sent out from there.

This is good in the sense that it maintains the pharmacy’s exclusive right to sell retail products under state law. But it is bad in the sense that there is very little incentive for pharmacies in urban areas to send deliveries to the most far-reaching parts of the state. There just is not enough money in it. Not only that, but a pharmacy located in Provo or Salt Lake City also undertakes a logistical nightmare when it attempts to cover the entire state.

Under the bill currently being considered, home deliveries would not have to originate with pharmacies. Medical cannabis processors, which are essentially the wholesale distributors, would be able to fill home delivery orders themselves. They could offer a direct-to-consumer model that could ultimately save customers money. But such a plan could also pull the rug out from underneath licensed pharmacies.

Pharmacies Couldn’t Compete

A direct-to-consumer delivery program would be brutal for pharmacies unable to compete. They already need to charge higher retail prices to cover their costs. There is no way they could sell as cheaply as a processor. On the other hand, processors could sell direct to customers at the same wholesale prices they charge pharmacies. Combine lower prices with home delivery’s convenience, and from whom do you think consumers will purchase?

Utah has only licensed fifteen medical cannabis pharmacies to this point. There are no plans to license any more. By the same token, state law does not limit the number of available processor licenses. That means a processor willing to pay for additional licenses could theoretically set up distribution operations throughout the state and ultimately dominate home delivery.

Utah is looking to change the way medical cannabis is delivered to homes. Unfortunately, the one plan currently in the pipeline has the potential to do more harm than good.

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About the Author: John M. Romine