Vermont: Word Of Mouth Drives Medical Marijuana Business

Jacob Redmond

Well-Known Member
Since Shayne Lynn opened his first medical marijuana dispensary in June 2013, demand for products has eclipsed his five-year business plan.

The executive director of Champlain Valley Dispensary and Southern Vermont Wellness is opening a 28,000-square-foot cultivation and research center in Milton that will double capacity for the number of patients the two dispensaries can serve.

"After two years, we are basically in our fifth-year business plan," Lynn says. "That was the impetus here. I didn't want to get constrained again."

Demand for medical pot for patients with cancer, HIV, AIDS, multiple sclerosis, wasting syndrome, severe pain, severe nausea and seizures has outpaced projections of lawmakers who crafted the original medical pot law and dispensary founders. Growth has stemmed from perennial expansion of the law and word of mouth from enhanced confidence in safety and reliability of dispensary products, according to those involved in the industry.

With growing confidence in their products, dispensaries could be well positioned to sell recreational pot if lawmakers advance legislation to legalize it next year, said Sen. Joe Benning, R-Caledonia. The Senate Committee on Government Operations, of which Benning is a member, is holding public hearings starting this week on recreational pot and plans to present a legalization bill in January.

A six-fold increase in patients

Since 2013 when the first medical marijuana dispensary opened, the number of Vermonters using dispensaries increased sixfold.

Champlain Valley Dispensary in Burlington started with 124 patients in July 2013. Southern Vermont Wellness in Brattleboro opened in February 2014. By July 2014, the two dispensaries were serving 400 patients. The two dispensaries now serve nearly 1,000 of 1,628 Vermonters who use the state's four dispensaries. The other two dispensaries are in Montpelier and Brandon.

The Burlington and Brattleboro dispensaries rely on marijuana harvested from a grow operation and laboratory in South Burlington.

The executive director of Chittenden County operations had planned on the South Burlington site being able to meet clients' needs for five years. Several months ago, he knew demand would surpass the site's capacity.

"That has been the biggest surprise, and one of the bigger challenges has been keeping up with demand at the pace at which things are moving," Lynn says.

He began searching for another location with growth potential for at least another three years. The Milton building in the Catamount Industrial Park was a good fit because the previous tenant had been using the building to produce pharmaceuticals. The building already had installed security systems and clean rooms, for instance.

The Milton building, owned by Cynosure Inc., will double the number of patients the Burlington and Brattleboro dispensaries can serve from 1,000 to about 2,000, Lynn says.

Patient growth, physician reservations

Patients, rather than physicians, are fueling the boom in business at Vermont dispensaries, says Joe McSherry, a neurologist at University of Vermont Medical Center.

"Medical marijuana hasn't been taught in medical school since 1941 or 1942 so none of us have a good medical basis for knowing what to prescribe," McSherry says. "I think across the country, patients try marijuana, find it works and then go ask their doctors."

Many health care providers still have questions about whether medical marijuana is safe and effective, says Justin Campfield, spokesman for the Vermont Medical Society.

The medical society has standing resolutions calling on increased research on medical efficacy of medicinal marijuana, Campfield says.

Since 1981, the medical society has opposed marijuana legalization and use except in cases when treatment offers a medical benefit, Campfield says. In the medical society's survey earlier this month, 52 percent of 113 physician respondents supported keeping that stance. The medical society has a total of 2,000 members.

The physician community is divided over whether marijuana is medically beneficial, and divisions fall largely according to age, McSherry says.

"It seems there are a number of physicians who believe the evidence says that it is medically beneficial," Campfield says. "There are also members who feel this issue needs much more research."

The medical society plans to offer a continuing education class on medical marijuana at an annual meeting in November, Campfield says. The exact topic has yet to be determined.

Growth drivers

The growth in dispensary use has happened without advertising, says Lindsey Wells, marijuana program administrator in the Vermont Department of Public Safety.

"Overall, there is a lack of knowledge about dispensaries, and one reason for that is they are not allowed to advertise," Wells says. "If you are only allowed to reach so many people, that limits the growth."

Word-of-mouth and expansion of the medical marijuana law are largely driving demand.

"I really think it's a matter of patients going home and having a good experience with the dispensary, staff and products and getting symptom relief," Lynn says. "They talk to other people, who tell their health care professional."

Meanwhile, the Legislature has repeatedly modified the law to make marijuana more accessible to those who are in need.

In 2007, lawmakers lowered the application fee from $100 to $50 for a medical marijuana card. In 2011, the Legislature expanded the definition of a health care provider, which was previously restricted to a physician.

Then, in 2014, lawmakers eliminated the cap of 1,000 patients the four dispensaries were allowed to serve at a given time.

Medical pot cardholders turn to dispensaries

To join the medical marijuana registry, patients must obtain a form from their health care provider verifying they have a qualifying medical condition and that reasonable efforts were made to relieve the symptoms.

The patient also must have received care from the health care provider for at least six months, unless the patient is terminally ill, has cancer that has metastasized or has AIDS.

A majority of medical card holders in Vermont use marijuana to treat severe pain, according to the Department of Public Safety. Cancer is the second most common condition treated with medical marijuana.

Before dispensaries started opening in 2013, patients on the medical pot registry had to either grow their own marijuana or obtain it illegally.

After dispensaries opened, the percentage of patients who obtained marijuana outside of dispensaries gradually decreased from 73 percent of patients on the registry in June 2013 to 14 percent in June of this year.

"The medical community is realizing this has been beneficial for patients, that we are here, that we are offering a service and that products are of the highest quality," Executive Director Lynn says. "Doctors and patients can start to count on it. There is consistency in what we're doing."

Robert Merriam of Marlboro says he received his medical marijuana card a year ago for severe pain. Merriam says he chose to buy his marijuana from the Brattleboro dispensary because the dispensary can provide better quality, consistency and variety than what he could cultivate himself or buy on the street.

The dispensary has "more knowledge than I do," Merriam says. "Knowledge is another key thing, not just about cultivating but about every aspect of use."

"It allows me to test different varieties to determine what is most effective in relieving my symptoms. What I thought was going to work for me when I first went in there wasn't right. I had to try at least half a dozen to find ones that worked for me."

Vermont law requires dispensaries to be nonprofit. The businesses are ineligible for 501c3 tax-exempt status because federal law still defines cannabis as an illegal controlled substance with a high potential for abuse.

Congress in December barred the Justice Department from spending money on investigating medical marijuana operations.

CVD move

Champlain Valley Dispensary's main offices, including customer service representatives, commercial kitchen, cultivation, laboratory, research and development center, and delivery services will be located out of the Milton facility.

The laboratory in South Burlington is being moved to Milton. The South Burlington location will continue as a grow site until the Milton site is in full operation, which could take 12 to 14 months, Lynn says.

Five new positions have been added so far to staff the Milton site, bringing the two dispensaries' staff to 30. In the next three years, another 12 to 40 employees will be added to the staff to meet demand.

The dispensaries offer a rotating menu of 21 strains of marijuana, including five strains high in CBD and low in THC. The last is the intoxicating chemical in pot. CBD is short for cannabidiol, a compound with the medical benefits but no psychotic effects.

"We will be germinating another 10 in the new building to bring additional strains to the dispensary," Lynn says.

Staff in the research lab will develop a variety of other new products, including trans-dermal patches, CBD capsules and supplements that can be added to a smoothie or other foods and beverages. The dispensaries already offer salves, lotions, tinctures, lozenges, edibles, teas, concentrates and flour.

Lynn says the dispensaries are still focused on medical products, but he would consider selling recreational pot, depending on what policies lawmakers put in place.

"If it can be parallel, then, of course why wouldn't we do that?" Lynn says. "But it cannot come at the cost of diminishing the services we are giving our patients, and that is back to this really fast growth."


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