Dispensary Owners Redefine Ugly Competition

The owners of Thomas C. Slater Compassion Center medical marijuana dispensary in Rhode Island have taken the idea of working together, brothers-in-arms, and friendly competition, and thrown it into the trash. This brash and unfriendly group just offered the state of Rhode Island $5 million if state regulators change their plan to hike the number of state-licensed pot dispensaries from the existing three to 15.

Apparently, the dispensary can't stand the heat of additional competition.

Chris Reilly, a spokesman for the state’s largest medical marijuana dispensary offered a thinly veiled and rather disingenuous explanation: “We’re very sensitive to the state and its challenges,” Reilly told members of the House Finance Committee. “And if there is a way to find the $5 million that you need to plug the budget hole that you need for the coming fiscal year, we’d like to be part of the solution.”

Regulators say the plan would increase competition among dispensaries, lower prices, offer a wider array of tested marijuana strains and improve access for patients, whose numbers keep growing.

But dispensary representatives say the expansion would cost them money.

Massachusetts competition “is a market force that’s going to strain our program considerably,” Reilly told lawmakers.

Seth Bock, the CEO of the Greenleaf Compassionate Care Center, said he had hoped the state would approve home delivery of medical marijuana to help blunt expected competition from Massachusetts recreational sales.

And Terence Fracassa, a principle with the Summit Medical Compassion Center in Warwick, questioned the need for more dispensaries since the existing three are currently meeting patient need and could further expand their growing facilities if needed.

Clearly this band of three dispensaries want to make sure that no one else is allowed into their club.

But state regulators differ with the dispensaries over whether the state’s patient need is being met.

In an interview, Norman Birenbaum, the state’s top medical marijuana regulator, said that the 60,000 tagged plants growing in private homegrows — compared with 10,000 plants growing in the three dispensaries — are a true indicator of need.

They exist because those private grows offer a wider variety of marijuana strains, better consistency and sometimes better quality than the dispensaries — all important factors to a patient.

But some of that product feeds into the black market. That’s why Raimondo’s proposal calls for limiting home grows and encouraging patients to use the two dozen newly licensed cultivators whose products eventually will be tested for contaminants and closely controlled.

Regarding the cash offer from Chris Reilly of the Slater dispensary, Birenbaum said, “From a business standpoint I understand the impulse to continue to protect the market share that they have.” But the “proposed reforms are not being offered to fill a gap in the budget. They are not being offered to raise revenue or push the industry in a particular direction. They are being offered to address the very real problems we have in the medical marijuana program.”