Ultra Health has been serving New Mexico’s medical cannabis patients since 2015. While there is arguably more money to be made by serving customers in states with recreational cannabis—and there’s a chance New Mexico’s legislature may legalize adult use before long—the company remains optimistic that the medical market will find a way to evolve and survive.
That said, Marissa Novel, Ultra Health’s chief marketing officer, told Marijuana Business Magazine that more reforms are needed to keep the MMJ sector viable. Not only is further product research and development key to the future of the market, the bigger necessity is lower barriers for patient access to medical cannabis products.
Marijuana Business Magazine spoke with Novel about how she believes medical-focused marijuana companies will fare in an increasingly recreational cannabis trade.
What are some of the business differences between being a medical-only marijuana company and a recreational player?
There are a few differences with being medical-only, and a lot of the differences are regarding how these products are prepared. We have a GMP (Good Manufacturing Practice) facility at our Bernalillo campus, where we produce pharmaceutical-grade, accurately dosed medical cannabis products. And that’s a product of being in a medical-only state for so long.
Some of these states have had a shorter time frame for their medical programs, like Nevada, which switched gears into recreational so quickly I think they lost that focus on how a lot of medical products should be prepared.
Accurately dosed products are a major difference. We have oral and sublingual tablets that come in 10-milligram pills, so when you take that pill, you know you’re getting 10 milligrams, whereas if you buy a 100-milligram chocolate bar and you break it up, you’re not really sure (how many milligrams may be in one piece).
So, not only is accurate dosing important, having those serving sizes is really key—especially because that’s how a lot of pharmaceuticals come: They come in individual pills, they’re sealed and they look clinically elegant.
We also have to consider that a lot of these medical patients already have compromised immune systems and other health conditions, and that can be a factor that’s really overlooked if the medical and rec markets are blended together.
Do you see business benefits in being restricted to medical applications and products?
When it comes to traditional health care, access to urgent care or a hospital is really the most important aspect of keeping communities healthy and safe.
What people don’t really know about the population (in New Mexico) is about two-thirds of the population resides outside the metro areas. So we have cities like Albuquerque and Santa Fe and Las Cruces, but not a substantial amount of the state population lives in those cities.
Being in medical, we want everyone to be able to access us, so we know that we have to go out to these rural communities that are underserved. And what people didn’t really understand about those communities is they have a high number of people who qualify that otherwise wouldn’t use cannabis because they didn’t have a provider in their area. So we’ve seen patient numbers in these counties turn around—from 100 patients, and after we’ve (visited) the county, they’re up to 1,200. It’s a blessing in disguise, really, because with rec markets the focus seems to be these cities and metro areas being the most prime locations when, in our reality, being medical-only, these rural areas are actually a lot more in need.
We do see that there’s a need for more standardized production and more clinical production. That’s why we sought to build one of the country’s first pharmaceutical-grade labs of this caliber. And eventually, this is something that all (MMJ providers) should have: some sort of FDA guidance or GMP guidance on how they produce these products, because unfortunately I’m not sure that all of them will take the initiative to do that themselves—or know what to do.
How has being medical-only helped or hindered your business’ long-term plans?
Being medical-only has helped us create a more widely distributed network of retail dispensaries. How the licensees work in New Mexico is we’re all vertically integrated, and a lot of what our strength is in the market is our retail distribution network, given that we understand that the (patient demographic) is in rural markets.
I’m not sure we would have realized there was such great need out there if we had such an influx of activity in metro areas, if everyone 21 and up could buy, or all these tourists could come through and purchase cannabis.
How do you think the medical marijuana space will shift, as recreational cannabis becomes increasingly the norm for the industry?
Ultimately, I think for the medical trade to survive, there needs to be changes in how medical cannabis is treated today—both in the state markets and nationwide. Patients need an incentive to reapply for patient status.
Out of pocket, in Arizona, it’s $150 for an exam and another $150 for your (MMJ patient) card. So you’re looking at $300 annually that you need to pay, along with making the appointment, getting the exam done, filing the paperwork. It’s all pretty cumbersome, even when you don’t account for the pricing scheme.
And patients with chronic conditions, cancer patients, have to annually prove that they still have cancer. That’s not very typical for traditional health care. Even the annual visit, I think, needs to be thrown out; we need to lengthen the life of the (MMJ patient) card.
Patients obviously need to be able to buy medical-grade products with higher potency. There’s over-the-counter Tylenol, but there’s also medical-grade Tylenol that’s much stronger. There does need to be a distinction there.
But most importantly, there needs to be a distinct pricing advantage for the patients. That could be in the form of reduced taxation on medical products, or special pricing for those products, but what we think would make the real difference is some sort of reimbursement. Patients that use a high volume of high-potency products, they’re the ones who need that financial relief. If you could reimburse them for cannabis—just like any other pharmaceutical—then you’ll see a lot of retention in the medical programs. If that isn’t there, I do unfortunately see the medical industry dissolving into recreational, because you do really have to incentivize patients. State regulations and statutes need to reflect patient needs, otherwise they’re going to turn to the recreational or black market.
I think there’s way more potential out there (for medical applications of cannabis). It’s incredible what we’ve learned so far, given that we’ve not been able to clinically research cannabis. But what we’ve learned so far is amazing. Flavonoids in cannabis have been shown to help reduce the effects of cancer, one of the hardest illnesses to treat. There’s a lot of research that really needs to be done to understand how these compounds work together, how they work in isolated form, so once there’s substantial widespread clinical research, we’ll see much more innovation coming from the medical market than the rec market, and we’ll see more diverse product types, product delivery methods that are more effective and therapeutic than flower or oil or edibles.
How do you see product differences impacting your business, and how do you foresee that affecting Ultra Health?
I think for Ultra Health, particularly, if it comes down to a potency scheme, we could manage that pretty quickly. For other operators, I’m not sure if they’d be able to pick up the more specialized medical (production), but there are wholesalers and other ways for retailers to get those medical products.
We’re always looking to expand our product line with what we can do now, but I think once it becomes legal for adults 21 and over to buy (in New Mexico), we will have even more ability to research those further and get those products to market, just with that influx of revenue we’ll get from rec.
This interview has been edited for length and clarity.