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Vireo Health sees looming competition as problem

Vireo Health sees looming competition as problem

CEO says it's premature to license more growers
Vireo Health sees looming competition as problem
Assistant cultivator Emily Errico checks plants in the grow area in 2015.
Photographer: MARC SCHULTZ

Vireo Health of NY CEO Ari Hoffnung, in his comments to a group of Fulton County officials and real estate brokers at the Tryon Tech Park during a recent visit, expressed concern over the state Department of Health’s effort to bring additional companies into the state’s medical marijuana program.

The company produces five strains of cannabis oils at their Tryon facility that are used to treat different ailments, from neurological disorders to chronic pain, the latter of which was recently added as a qualifying condition under the state’s medical marijuana program. 

RELATED: Fulton County launches commercial development push

The fledgling program is administered by the DOH, and there are five companies currently licensed under the program in New York. Hoffnung said Vireo has recently come into conflict with the DOH over the state’s push to add an additional five licenses to the program, bringing the total number of medical marijuana companies in New York to 10.

Hoffnung said the market is simply too fragile, with a limited customer base, to support that many companies.

“It certainly wouldn’t be good for our business,” said Hoffnung. “We just think that it’s premature and the market is a little small.”

Hoffnung said none of the existing medical marijuana companies in New York are yet profitable, and how fast Vireo NY gets to that point is tied to how many other companies they have to compete with.

The DOH said recently that five additional companies have been granted conditional registrations under the state’s medical marijuana program. These companies include New York Canna, Fiorello Pharmaceuticals, Valley Agriceuticals, Civita Medical and PalliaTech NY.

“The department anticipates issuing full registrations to these five organizations within the next month,” said a DOH spokesperson.

The companies must still meet additional statutory and regulatory requirements to be granted a full license.

The DOH said their rationale for bringing more companies into the fold is to increase patient access, increase geographic distribution of medical marijuana across the state, make medical marijuana more affordable for patients, and increase the amount of medical marijuana products available.

Hoffnung said every medical marijuana company in the state, as well as the DOH, wants to enhance patient access to the product in New York, “but I think there’s some disagreement on how to do that.”

“We want more patients to benefit from medical marijuana in New York, and we have some strategic differences,” he said. “It’s just premature, let it grow a bit over time.”

Hoffnung said the best way to expand the company and medical marijuana use statewide is to get more practitioners enrolled in the state program.

“We need more patient adoption, we need more patients in New York to explore whether or not medical marijuana is the right choice for them,” he said. “And we need more healthcare practitioners, there are about 1,000 now that are registered with the state.”

Those 1,000 practitioners include those registered to prescribe medical marijuana via “telemedicine” -- online consultations that are designed to streamline the process of getting a marijuana prescription.

Hoffnung added that there are probably 100,000 healthcare practitioners in the state, meaning only about .01 percent are licensed to prescribe medical marijuana.

“What will help the program grow is we definitely need more healthcare practitioners,” he said.

Hoffnung added that there persists a “huge stigma” around medical cannabis in the state, which Vireo NY and other companies are seeking to overcome.

“The only way to combat that stigma is through education and more awareness and more healthcare practitioners enrolling in the program,” he said. 

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