California Weed

Marijuana doctors get new business buzz from legalization in California

A customer browses products in February at the Orange County Cannabis Club, a medical pot dispensary in Santa Ana. California voters legalized marijuana for recreational use Nov. 8, but it could be months before the state has regulations in place for legal retail sales.
A customer browses products in February at the Orange County Cannabis Club, a medical pot dispensary in Santa Ana. California voters legalized marijuana for recreational use Nov. 8, but it could be months before the state has regulations in place for legal retail sales. Sacramento Bee file

In the weeks since Californians voted to legalize marijuana for recreational use, the phones have been ringing more intensely and the flow of walk-in patients has picked up at 420 Med Evaluations, a midtown Sacramento clinic specializing in medicinal pot referrals.

The passage of Proposition 64 on Nov. 8 instantly allowed adults 21 and older to consume marijuana, regardless of medical need. Along with that, went the thinking, people seeking pot for pleasurable pursuit no longer had to endure the inconvenience of going to a doctor and citing a physical ailment to get a medical recommendation to legally light up a joint.

But the cannabis hopefuls showing up at marijuana dispensaries got a bummer of a realization: Marijuana stores won’t be selling recreational weed anytime soon. Proposition 64 will be phased in over the next year, as state officials and willing local governments set up regulations for retail sales. Estimates are that retail licenses could be available by mid-2017 – or maybe as late as Jan. 1, 2018.

The upshot? Instead of business plummeting for pot doctors in the wake of legalization, some medical cannabis clinics are noticing an uptick in business as consumers realize they still need a physician’s recommendation to browse dispensary shelves of glistening marijuana buds, honey-hued concentrates and pot-infused brownies.

“It’s been a crazy spike,” said Jill Beaver, office manager for 420 Med Evaluations, whose physicians have been giving out marijuana recommendations for eight years. “Normally, this is the slow season for us. But we’re averaging 50 to 60 patients a week.”

In the long term, legalization of recreational marijuana is expected to pose challenges for cannabis doctors. To keep clients, many medical pot clinics are planning to rebrand to broader holistic services. Some also are counting on new consumers wanting a physician’s guidance before trying pot, even as a recreational experiment.

“I do feel there is going to be greater interest,” said Dr. Jean Talleyrand, founder of MediCann, a network of medical marijuana clinics in California. “The nature of the patients whom we seem to be seeing now has changed to people who in the past weren’t comfortable coming in.

“Maybe in the past, they felt cannabis was just quasi-legal. Now with Proposition 64, they feel as if it is really legal.”

California’s medical marijuana law, passed in 1996, provides people a legal defense for using pot if they have a doctor’s recommendation saying they have a condition that could be relieved with marijuana treatment. Much of the traditional medical establishment was uncomfortable with issuing such recommendations, in part because of the drug’s hazy status under federal law, and also because many physicians were uncomfortable with the notion of being someone’s indirect weed connection.

That created a business opportunity for accommodating doctors whose specialized clinics flourished as people flocked in to get recommendations for conditions severe to benign. The recommendations – for ailments ranging from chemotherapy-induced nausea to psoriasis and social anxiety – helped make possible a multibillion-dollar medical marijuana economy of pot farms, retail dispensaries and production facilities.

Talleyrand, a former public health physician and urgent care doctor at San Francisco General Hospital who founded MediCann in 2004, acknowledges that medical marijuana use became blurred with recreational use. Just as many people sought out doctors for serious conditions, he said, other appeared to be seeking legal cover to consume pot. At its peak in 2011, his company had 21 clinics and had given out marijuana recommendations to more than 250,000 people.

A 2011 study published in the Journal of Drug Policy Analysis, conducted with MediCann’s cooperation, found that a small fraction of the company’s patients had AIDS or cancer diagnoses, and that the majority reported seeking marijuana for pain relief. More than half of the 1,655 patients surveyed said pot helped them relax, and 14 percent said it served as a substitute for alcohol.

The study also found the patients were disproportionally young. Eighteen percent of MediCann’s customers were ages 18 to 24, and 28 percent were 25 to 34 – age ranges when people generally are at their fittest.

Talleyrand said MediCann’s business flatlined in recent years because the network – which charged $150 for physicians’ recommendations – ultimately could not compete as cut-rate clinics emerged that doled out recommendations for as little as $25.

MediCann since has downsized to seven clinics, and Talleyrand is looking to change his business model in light of Proposition 64. He plans to rename the clinics he runs – in North Highlands, Oakland, San Francisco, Eureka, Ukiah and Santa Rosa – to “Motion Health.” They will provide medical marijuana consultations, as well as acupuncture, chiropractic care and hypnosis, targeting patients with long-term conditions.

“This should be part of a whole care program, not just about one substance,” Talleyrand said.

At 420 Med Evaluations, lead physician Dr. Deborah Klaisle said she thinks more people are coming into her clinic for medical recommendations out of a sense that pot use “is more legitimate” because of Proposition 64. Her clinic charges $55 for recommendations ($45 for repeat customers).

Klaisle said customers unfamiliar with marijuana still want advice on the effects of different strains, products and methods of consumption. But she worries many could see medical referrals as obsolete as recreational use takes hold. “I’m not confident about anything. I hope it keeps going,” she said.

In Colorado, the number of people getting medical marijuana recommendations fell off only marginally after that state legalized recreational use in 2012 and opened pot stores for non-medical consumers in January 2014. Colorado had more than 128,000 people with medical recommendations in 2011. The number stands at about 102,000 today.

One factor working against a bigger drop-off is price: In Colorado, recreational users pay a 15 percent excise tax and a 10 percent marijuana retail tax, as well as state and local sales tax for marijuana products. Medicinal users pay only the sales tax.

In California, both medicinal and recreational users will have to pay a 15 percent excise tax on retail sales under Proposition 64. But medical users can be exempt from state and local sales tax if they obtain state medical marijuana identification cards by applying at county offices in their county of residence.

Robert Cohen, who runs Cohen Medical Center in Denver, said business for cannabis doctors has remained mostly steady since Colorado legalized use.

“When recreational (marijuana) hit, we couldn’t have been any busier,” Cohen said. “We had a renaissance, a whole new demographic opening up. ... They came in because they had no idea how to use it.”

Dr. David Bearman, a Santa Barbara County physician, said he hopes Proposition 64 will be liberating for many traditional doctors who have steered clear of discussing marijuana with patients. Bearman, who is vice president of the American Academy of Cannabinoid Medicine, a group advocating for medical marijuana research, doesn’t expect there to be more pot doctors. But he said many general practice physicians and those specializing in cancer and pain management may be more willing to refer patients.

“I think there is always going to be a demand for cannabinoid medicine specialists,” Bearman said.

Dr. Deborah Malka, whose offices in Monterey and Santa Cruz specialize in herbal and alternative medicine, said she thinks Proposition 64 could be a boon for doctors with expertise in cannabis treatments. The business decline, she said, is more likely to affect the “doc-in-the-box places” – the clinics doling out cheap marijuana recommendations with little medical counsel.

“If all they’re doing is giving out a piece of paper saying you’re legal, their business will be diminished,” Malka said.

Malka has a medical degree from the University of New Mexico and a doctorate in molecular biology from Columbia, as well as herbal medicine training from the Santa Fe University of Natural Medicine. She charges $120 to counsel patients on cannabis use as part of a holistic health regimen that may include psychoactive marijuana strains or nonpsychoactive flowers, tinctures and salves. Malka hopes her model will thrive in the recreational era.

“I really hope this will move it into a more distinguished medical arena,” Malka said. “There may be a whole new niche for medical patients.”

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