Louisiana’s nine existing medical marijuana pharmacies would have a near-exclusive right to open new locations in the fast-growing marijuana space, under a bill that was heavily rewritten by the state Senate Thursday.
Sens. Patrick McMath, R-Covington, and Jay Luneau, D-Alexandria, who are among the lawmakers who have negotiated over the bill in recent weeks, pushed through the rewrite. McMath said the proposal “enhances the patient outcome for a program that this body has supported for years now.”
Originally, HB697 by Speaker Pro Tem Tanner Magee, R-Houma, would have let the nine existing pharmacies open one satellite location apiece, based on patient count, before letting new prospective licensees into the program. It would also have given the 10th license, which is on the books but hasn’t been awarded yet, to a yet-to-be-named business in Jefferson Parish.
Luneau’s amendments raised the cap on pharmacy locations to 30, but still limited the operations to the nine existing pharmacies and the forthcoming 10th. Under his changes, new pharmacies could open a location only if an existing company passed on the chance after hitting a 3,500-patient threshold. The 10th license would go to a new business in the New Orleans health region, which encompasses Jefferson, Orleans, St. Bernard and Plaquemines parishes.
Most regions would likely qualify for satellite locations immediately, though pharmacy board figures for the most recent quarter weren’t immediately available Thursday.
“We made some implied promises to these guys that we were going to give them an adequate amount of time to recoup their investment,” Luneau said in an interview. “I don’t want to pull the rug out from under them now.”
Luneau was backed by Gov. John Bel Edwards, a Democrat who has said he doesn’t favor a dramatic expansion of medical marijuana companies. At a news conference Thursday, Edwards said it would be “fundamentally unfair” to add new pharmacies to the program soon after allowing flower sales. He said he asked lawmakers he’s working with to “preserve the existing architecture” of the program.
But opponents questioned why existing license-holders should be given exclusive access to open new locations. Sen. Jay Morris, R-Monroe, cited concerns that costs are too high, and said disallowing competition won’t help that.
“Maybe we can pass a law where I can have the only law firm in Ouachita Parish,” Morris said. “Whoever has these licenses sure doesn’t want to share. And I can’t blame them.”
“Why is government guaranteeing, or wants to guarantee, a return on investment?” said Sen. Patrick Connick, R-Marrero.
Luneau countered that the pharmacies don’t have a monopoly because it’s not one company dominating the market statewide. He added that the amendments were a compromise after being “bombarded with requests from various groups.”
In an interview, he noted that he tried to “push toward the middle,” especially with the 3,500-patient threshold that must be reached before a new location can be opened.
Once narrow and heavily regulated, Louisiana’s medical marijuana program has come to resemble those in other states, especially after lawmakers allowed pharmacies to sell the smokable flower beginning this year. That brought a huge increase in the number of patients.
Unlike some other states with medical marijuana programs, though, Louisiana only has two growers and nine pharmacies. The growers are private businesses partnered with LSU and Southern University, an unusual arrangement.
There is one pharmacy apiece in each of the nine regions used by the Health Department. They are located in the Capital region, New Orleans, Acadiana, Houma-Thibodeaux, Lake Charles, Alexandria, the north shore, Monroe and Shreveport.
Magee said he would review the amendments and discuss them with lawmakers and the governor. He said he would “see what the temperature is” and decide whether to ask the House to approve the changes or send the bill to a conference committee, where lawmakers would craft a compromise behind closed doors. The governor would need to approve the bill for it to become law.
In addition to changing the licensing for pharmacies, the bill would also change the chief regulator of marijuana growers from the Louisiana Department of Agriculture and Forestry to the Louisiana Department of Health. That comes after years of tense relationships between the agriculture department and the two growers, which have complained of regulatory slowdowns.
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