Medical marijuana may not be kind to hospitals

Gov. Andrew Cuomo’s plan to legalize medical marijuana program could put hospitals in a bind. Marijuana advocates say hospitals in other states where medical pot is legal have steered clear of distributing the drug for fear of running afoul of federal laws—and possibly losing government funding.

An executive order Mr. Cuomo intends to announce at his State of the State address Wednesday in Albany would use a 1980 state law to allow 20 hospitals in New York to distribute the drug to patients suffering from cancer, glaucoma or other “approved” diseases, according to the law named after Antonio Oliveri, a former city councilman and assemblyman who died from a brain tumor and advocated marijuana as a drug that could relieve the side effects of chemotherapy.

The law, however, does not explicitly allow hospitals to buy the drug or to sell it to patients. Medical marijuana advocates say the “Olivieri law” only allows for the use of marijuana that comes from the federal government or local drug busts, which may not be medical grade marijuana. That could make it difficult for hospitals to make money on a pot program. It would also mean a medical marijuana program would have to be funded through the state Department of Health, health care industry experts said.

“They would presumably have to find money somewhere for testing the purity and safety of the seized marijuana and packaging it,” said Assemblyman Richard Gottfried (D-Manhattan). “There would be considerable staff and administrative expenses for the department.”

Mr. Gottfried, who supports the executive order, is the author of a bill to create a regulated, private medical marijuana industry. His bill to legalize medical marijuana passed the Assembly last year but has been stalled in the State Senate, where it is being sponsored by Diane Savino (D-Brooklyn).

For the time being, medical industry groups declined to comment, saying they are awaiting details on the proposal, which has been reported by several news outlets citing Cuomo administration sources but not commented on by the governor himself.

Using hospitals as a distribution network for marijuana would be a first, said Gabriel Sayegh, New York State Director of the Drug Policy Alliance, a group that advocates for the legalization of medical marijuana.
“There’s nowhere in the country right now where medical marijuana is being distributed out of hospitals,” he said. “How that’s going to operate is an open question.”

There is, however, one state where this is legal. Maryland allows academic medical centers to establish programs distributing marijuana to patients, but none have yet shown interest.

Other states’ experience suggests that many hospitals will likely steer clear of distributing medical marijuana, even with the governor’s blessing, for fear of losing federal funding.

“Most hospitals are probably not going to be interested in doing it,” said Patrick McManamon, managing director at Cannasure, which sells insurance for the medical marijuana industry in the 20 states where it is legal.
Marijuana remains illegal under federal law, although the Department of Justice has said it will not challenge state laws permitting its use.

Medical marijuana advocates said the executive order’s limitations underscore the need for new legislation that would create and regulate a private medical marijuana industry.

“The governor’s endorsement of the concept gives an enormous boost to legislation,” Mr. Gottfried said. “It becomes almost inevitable.”