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Report: 90% of Virginia Med Patients Obtain Weed Outside of State’s Medical Market

It’s not uncommon for residents of states yet to enact cannabis laws to travel and obtain their weed through out-of-state dispensaries. However, one Southern state appears to be experiencing this issue when it comes to medical cannabis, even though it’s had legal, operational medical dispensaries since 2020.

A new 78-page report released by the Virginia Cannabis Control Authority (CCA) takes a closer look at the state’s medical cannabis market, most notably finding that the state’s high prices are driving consumers to bordering states to purchase their cannabis products.

The report is the result of a request on behalf of the CCA from earlier in 2023, to study Virginia’s medical cannabis program with a focus on patient access and “determining the necessity and feasibility of adding new licenses to the existing program.” The study involved a population survey of past-year cannabis consumers and patients, an assessment of supply based on patient experiences and a policy analysis.

High Prices Push Virginians Out of State, Alternative Means

“The study found that the Virginia medical cannabis program is struggling to capture patients amid evolving local policies as well as adult-use policies in bordering states, resulting in prices remaining high,” the report notes, adding that 12% of patients report traveling to obtain cannabis from other states or jurisdictions, largely Washington, D.C. and Maryland.

According to the report, medical cannabis patients in Virginia spend more on cannabis than non-medical cannabis patients in the state. It also notes that patients in Virginia report spending an estimate of $19 per gram on average for medical cannabis flower, which is higher than the national average for medical cannabis flower — though looking at the publicly available price data, the report found that the average price of a medical gram in Virginia was closer to $14, which is still higher than average.

By comparison, the average price per medical gram in D.C. was $8/73 in September 2023; in Maryland, adult-use cannabis is $9.27 per gram on average.

Looking broader, 90% of patients purchased cannabis from sources other than the Virginia medical market, and the largest proportion of grams were obtained from “an unregulated, but not necessarily illicit, market.”  Additionally, 57% of medical patients obtained their cannabis by growing at home, while 65.2% of patients received cannabis from a friend or family. 

Virginia MMJ Program’s Low Barriers, Low Participation

Despite low barriers to patient participation, Virginia’s estimated patient enrollment encompasses 0.5% of the total state population, which authors say supports the assertion that patients can meet their need for medical cannabis elsewhere. 

Of those past-year consumers who are not patients, 22% said they did not need to become medical patients because they already had access to cannabis.

“Virginia’s restrictive policy framework, including limited licensing and the Health Service Area (HSA) segmentation, coupled with the widespread availability of cannabis from out-of-state markets, home cultivation, and illicit channels, has created an environment in which Pharmaceutical Processors are operating at their profit-maximizing supply quantity,” the report states. 

“In other words, licensees may have no expectation of increased profits if they expand their supply and lower prices because substitute markets have recently taken root.”

Solutions Needed to Sustain Virginia’s Medical Program

The report notes that the high prices of Virginia’s medical cannabis are “likely necessary” for Pharmaceutical Processors to stay afloat due to the current state market and policies that accompany it, rather than intentionally overcharging medical patients.

Authors also lay out five potential pathways to improve patient access to medical cannabis, with the shared objective to increase supply, lower prices and shift patient demand to regulated Pharmaceutical Processors.

The pathways include a mix of potential options, like issuing the remaining Pharmaceutical Processor licenses in the HSA or adding limited standalone medical cultivation, manufacturing and dispensary licenses allowed to operate within any HSA while allowing Pharmaceutical Processors to expand beyond the current six-store minimum within their area.

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