There is speculation amongst patients that Utah is in the midst of a cannabis crisis, but the limited supply of products was expected to occur at the beginning of Utah’s medical cannabis program by those involved in its development. This shortage has frustrated consumers, who are voicing their displeasure to local pharmacies where operators’ hands are tied by how fast cultivators can grow more products and expand operations.
Pharmacist Fern Hardin, left, discuses products with Utah medical cannabis patient Angi Flemming during the grand opening of Ogdens first medical marijuana pharmacy, Perfect Earth Modern Apothecary, on Friday, May 1, 2020, in Ogden. Photo Credit – Matt Herp
We are now 72 days into the legal sale of medical cannabis in the state of Utah, and there is still a shortage of products to choose from on pharmacy shelves.
There are three pharmacies open in Utah where patients can purchase medical cannabis. One of these is Dragonfly Wellness, where the Chief Strategy Officer, Narith Panh, predicts the current product shortage will likely continue through the next few months.
In July of 2019, Utah awarded licenses to companies that would allow them to either cultivate, process, or distribute medical cannabis. According to Rich Oborn, Director for the Center for Medical Cannabis at the Department of Health, some companies who were awarded these licenses have yet to start operations – and, oddly, have shown little interest in doing so.
“It will still be four or five more weeks until we get any substantial amount of (cannabis) flower, and people are going to continue to get more and more upset, not the other way around,” said Panh. “So if anything, we need to up our communication about product availability even more, so patients can know the real reason we have a shortage.”
Sundae Driver, an exclusive medical cannabis strain grown by Robert Allen, Dragonfly Wellness lead grower. Salt Baked City Staff Photo
Dragonfly Wellness, and lead grower Robert Allen, are in the process of flowering their third harvest of medical cannabis since the state started allowing cultivators to grow late last year.
At the end of the first Dragonfly wellness harvest, the state didn’t have its testing facilities set-up to examine products. According to Panh, this lack of preparedness by the state resulted in products needing to be frozen for a later date. This fresh frozen harvest was used for products such as vape cartridges, salves, and tinctures.
“If you remember when we first opened, we didn’t have any flower available for sale,” said Panh. “We hadn’t planned to open our doors until the end of March when we would have another fresh harvest ready. Since none of the other pharmacies were ready to open their doors, the state asked us to step-up to the plate and open on March 2. We took a hit opening early because we didn’t have as much product or inventory as we expected to, but we wanted to at least deliver something to our patients who waited so long for this.”
To date, three out of 14 state licensed pharmacies have opened their doors. Although pharmacies have until the end of the year to open, officials at the Utah Department of Health report that no opening dates have been set by any of the remaining 11.
“I think that as the program matures, and more pharmacies come in, home-delivery components mature, and the cultivation and processing comes along, we’ll see the program and the industry mature to a point where products aren’t running out as quickly and there are just more options available,” said Oborn.
Right now, in the program’s infancy, an unbalanced number of products can be expected, and experts are saying that this, along with the COVID-19 pandemic, is to blame for the shaky start to the industry.
There are four key components that make the Utah medical cannabis program work: patients, pharmacies, processors, and cultivators. Each of these participants is required to have a license to play their part in the program.
According to the DOH, there are 3,162 active medical cannabis card holders, and each week the department is seeing 200 to 400 new cards issued.
It’s still unclear how many defense letters have been issued, but registered letters at pharmacies are scheduled to be reported to the DOH by the end of this week. With the two patient groups combined, the state is likely approaching 10,000 total patients participating in the new program. This is another reason products are so hard to keep on pharmacy shelves.
“Based on what I’ve been seeing, I think it’s realistic to expect 25,000 patients by the end of this year,” Panh said. “Our own projections were anywhere between 18,000 and 20,000 patients when we started planning. Those projections were based on medical cards; defense letters were never a part of the equation, so when those came into play it escalated everything. If we didn’t have letters in the equation, we’d still have plenty of supply.”
Although they haven’t yet reported their patient numbers to the DOH, Panh estimates Dragonfly Wellness has over 4,000 patients registered in their system – and 1,500 of those are defense letter holders.
Patient Katelyn Beers glands at a product menu during the grand opening of Ogdens first medical marijuana pharmacy, Perfect Earth Modern Apothecary, on Friday, May 1, 2020, in Ogden. Photo Credit – Matt Herp
Perfect North has two pharmacies open, one located in Logan and the other in South Ogden. Both have been operating for less than a month, but according to staff, they’re building a solid network of patients that is growing every day.
“We’ve been seeing over a 100 patients a day at our South Ogden location since we opened the doors,” said Tim Pearl, director of operations at Perfect Earth.
Like Dragonfly Wellness, Perfect Earth possesses the trifecta of state licenses. They hold pharmacy, cultivation, and processing licenses in the state of Utah. This allows them to do everything in-house.
“That was the whole idea from the beginning,” said Pearl. “We wanted to grow it, process it, and sell it. I mean, we’re going to be able to have lower prices and still have the same or higher margins. I think it’s going to work out for everybody, but it’s just a matter of getting over this hump in the beginning.”
So, if you’re a medical cannabis pharmacy operator in Utah, how do you keep up with the demand as patient numbers surge?
When asked, staff members at Perfect Earth say they don’t have the supply issues Dragonfly Wellness is experiencing. They state that they have a steady inventory of cannabis flower, vape cartridges, salves, and tinctures available for patients.
Edibles are reportedly difficult to keep on the shelf at both locations because of high demand, and lack of product available.
“We’ve got plenty of inventory, it’s not even an issue really,” said Pearl. “I think for us, it’s understanding and balancing the supply chain of what needs to come in, and then, timing it right. When you get hit hard like we did during our first week (in South Ogden), we’ve made sure we have product in the pipeline; instead of bringing product over on Friday, we needed to bring it over today.”
According to Panh, while there are five or six pounds of cannabis flower still available from state licensed growers, the quality isn’t up to par with Dragonfly’s standards so they can’t, in good conscience, put it on their shelves. Pahn says that this has added to Dragonfly’s struggle to keep cannabis flower in stock.
“Look, we know what our vision is as a company, and we stand by our vision to bring high quality products at an affordable price to Utah patients,” said Panh. “So, if you have a low quality product at a high price, we’re not going to carry it. We will not put products on the shelf just because they’re available.”
While both Perfect Earth and Dragonfly Wellness have licenses to cultivate, they are currently relying on a handful of other state growers for product. Those growers are Standard Wellness, Zion Cultivator, and Tryke.
Utah medical cannabis plants are grown at Tryke, a company in Tooele County, one of eight cultivators approved by the state to bring product to the public as part of Utah’s medical cannabis program.
Photo Credit – Mother Liquor
Tryke, a company based in Tooele County, is one of eight cultivators approved by the state to bring cannabis product to the public. So far, they have served as the main supplier to both dispensaries.
Cannabis professionals are enthusiastic about working with Tryke, given the company’s size and experience in the industry. “We’re excited that a larger producer like Tryke has come out here, so that we can have access to plant material with which to start pressing and making products,” said Dashiel Kulander, co-founder of Boojum Med, a company that will be making extracts available at Utah pharmacies in the coming weeks.
According to Panh, some of the state growers are still relying on growing in tents and pods, rather than building the 50,000 square foot facilities allowed by the state.
“Literally, us and Tryke are the only ones producing any type of volume with our grows,” Panh added.
Much like pharmacy licenses, the state of Utah has issued all of the licenses for medical cannabis production, yet, according to the DOH, there are still some companies that have yet to start growing.
“I’m not going to point fingers, but the reality is, there are some big companies, with plenty of money, who have done nothing,” Panh said. “They don’t even have a building, don’t even have a permit for a building, yet licenses were awarded back in July of 2019; the same time Dragonfly was awarded its license. We built our facility in five weeks, so it’s not a matter of will or ability, it’s a matter of choice. They made a conscious decision to not be ready, and you have to ask yourself, why?”
Staff at the DOH have acknowledged that most of the growing pains associated with the new program have been focused on Dragonfly and Perfect Earth, but feel confident that, as the program matures, pressures will relieve and the market will level out.
Those who have yet to make progress in Utah’s medical cannabis program have until the end of 2020 to present plans to the Department of Agriculture.
“Once we get to July, we’ll never have this product shortage issue again,” said Panh. “Now that we’re rolling, we have a grow room that’s turning over 60 pounds of cannabis a month. So we’re sticking with our moral obligation to provide medicine for the entire state of Utah. That’s something we feel like we have to do because I haven’t heard a whisper of any other pharmacies opening soon to help out.”
The DOH anticipates that the remaining pharmacies will start opening throughout the summer, shortening the drive for those patients living in St. George, Cedar City, Pason, Lindon, and Provo.
“I think that COVID-19 has impacted the timing of when some pharmacies will open up and that’s the nature of what’s happening with business in general, not just medical cannabis pharmacies,” Oborn said from his office at the Department of Health. “I think we’ll see some additional pharmacies open up this summer, and at that point, I would hope we’ll see a jump in the number of medical cannabis card holders.”
