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I need research done on the PA medical cannibis industry potential.
Hello, and thanks for your question about the PA medical cannibis industry potential. I have found that the medical marijuana market in Pennsylvania is set to start off at a value of $125 million and increase to over $1 billion by 2020. My calculations estimate that there are potentially around 120,343 patients in the state who may utilise the service. Below you will find a deep dive into my research, along with all the details as to how I came to this conclusion.
METHODOLOGY
I have searched for articles and data from news sites as well as official Pennsylvania organisations which give information on the projected market of medical marijuana in Pennsylvania, as well as laws regarding dispensaries as well as general information. For the projected market I have done a few back of the envelope calculations which I have detailed below.
OVERVIEW
Last April a bill was approved which means that from now on patients in Pennsylvania who possess a signed recommendation from their doctor may purchase medical marijuana. The recommendation must that that use of marijuana “may mitigate” his/her debilitating medical symptoms, from this the patient must register with the Pennsylvania Department of Health for a Pennsylvania medical marijuana identification card.
Patients with serious medical disorders such as Amyotrophic Lateral Sclerosis, autism, cancer, Crohn’s Disease, damage to the nervous tissue of the spinal cord with objective neurological indication of intractable spasticity, epilepsy, glaucoma, HIV (Human Immunodeficiency Virus) / AIDS (Acquired Immune Deficiency Syndrome), Huntington’s Disease, Inflammatory Bowel Syndrome, intractable seizures, Multiple Sclerosis, neuropathies, Parkinson’s disease, post-traumatic stress disorder, severe chronic or intractable pain or sickle cell anaemia will be those eligible for registering for a Pennsylvania medical marijuana identification card.
In Pennsylvania medical marijuana prescriptions are illegal. Instead medical marijuana physicians are allowed to give patients medical marijuana to those with a medical marijuana recommendation in the form of a pill; oil; gel, creams or ointments; a form medically appropriate for administration by vaporization or nebulization, excluding dry leaf or plant form.; tincture; or liquid in compliance with state law.
PROJECTED MARKET
An article published in 2016 estimates that the Pennsylvania market will start off fairly small, at around $125 million. From this it is expected to grow at 180% annually until it accounts for 9.2% of the US market by 2020. With these figures I can calculate that by the end of 2017 we should see the market being valued at $225 million, in 2018 this should rise to $405 million, 2019 to $729 and it should reach just over $1.3 billion by 2020. The 5 year projection for 2022, using the annual grow rate of 180%, is $4251.52 million.
In addition to this some experts have predicted that legalisation of medical marijuana in the state of Pennsylvania would lead to an industry that would some day have a net worth of more than $600 million. This source also claimed that day one would begin at $125 million.
While there are no exact figures as yet published for how many patients this may represent I did find an article which explains how 5,000 patients are helping give their input in order to split the state into locations for growing and dispensing. This number of 5,000 may indicate how many people may be seeking to benefit from medical marijuana in the state.
Further to this I found statistics showing the number of patients of medical marijuana per state, along with the percentage of the population that this tallies to. I took an average of all the percentages, totalling to 0.94% of the population on average using medical marijuana in states where this is legal. The population of Pennsylvania is 12,802,503, 0.94% of this gives us 120,343 potential patients who may be looking to use medical marijuana.
DISPENSARIES
Obtaining a license to become a dispensary of medical marijuana in Pennsylvania is expected to be expensive. It is reported that the application fee would be $200,000. In addition to this it is stated that banks are not allowed to take deposits related to the sale of medical marijuana. Only being able to receive cash payments will pose a problem to those wanting to become a dispensary. Another site, which was updated just a few days ago confirms that this is still the case in Pennsylvania.
As for the number of growers/processers I have found an article on the Pennsylvania Department of Health website which states that only 25 growers/processors will be issued a permit and only 5 of these will be issued a dispensary permit.
Finally I have found an article which tells us that only marijuana plants grown in Pennsylvania may be sold there. There will be a 30 day window for growers to import seeds for their first crops but then subsequent plants must be grown from seeds, clones, or grafts from the first crop.
PAYMENT SYSTEMS CO & CA
After a thorough search I could not find information listing the top payment system providers of dispensaries per state. However, I did find a list of accepted providers by state. The following are accepted in Colorado: Adherence Information Management; Authorized Credit Card Systems; B.A.M.M. Virtual Services LLC; BankCard Brokers; Cannabis Payment Services; CanPay; Central; Payment; DiamondBL; GetBanking; Install; Med Cannabis Pay Pro; MEYERS ASSOCIATES LP; Oakwood Park Associates, LLC; Online; Debit Solutions, Ltd.; Payment Alliance International; Preferred; Merchant Services; Prime Capital Connections; Total ATM; Ultimate Payment Solutions; Vaniso; Vericomm Corporation; World Wide Marijuana Investments. The following are accepted in California: 420 Merchant Solutions; AztecATM; BankCard Brokers; Cannabis Cashier; Cannabis Payment Services; Citadel eft inc; DiamondBL; First American Merchant; GetBanking; Knoxcard; Law offices of Gregory Rutchik; Marijuana Merchant Account; Med; Cannabis Pay Pro; MMJ Compliance Group; Oakwood Park Associates, LLC; Online Debit Solutions, Ltd.; Preferred Merchant Services; Ultimate Payment Solutions; Vaniso; Vericomm Corporation; World Wide Marijuana Investments.
Further to this I have sought information regarding how healthcare providers connect with dispensaries. In fact, it is possible and also advisable for dispensaries themselves to register as a healthcare provider through The Health Insurance Portability and Accountability Act of 1996 (HIPAA). According to legislation dispensaries must transmit any health information in electronic form in connection with a covered transaction, which is actually the legal requirement in most states.
CONCLUSION
Overall it can be estimated that by 2020 the medical marijuana market in Pennsylvania may be worth around $1.3 billion, and there may be around 12,802,503 patients using the service. Further to this I have discovered that dispensaries are set to face a few obstacles, they will only be able to accept cash transactions, and they will only be permitted to sell crops grown in Pennsylvania. On top of this they will have to pay an application fee of $200,000.
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