Dec 06, 2019

Texas DPS Slows Licensing of Medical Marijuana Dispensaries

Reporting Texas


At the end of the legislative session earlier this year, supporters of medical marijuana hailed the state’s expansion for its use with passage of the Compassionate Use Act.

But now the Department of Public Safety, through its licensing regulatory authority, is saying not so fast – but the circumstances around this decision remains hazy.

The Texas Department of Public Safety announced it would be accepting applications for the licensing of new medical cannabis dispensaries from October 1 to November 1 of this year. However, DPS unexpectedly closed applications for additional dispensing organization licenses after a week of welcoming applications.

“The Department’s Compassionate Use Program is not accepting applications at this time,” says the DPS website. And two months after the suspension, the department still has not provided a clear explanation to the public.

Heather Fazio, director of advocacy group Texans for Responsible Marijuana Policy, said DPS’s official story is that it had failed to analyze the market prior to announcing the opening of an application period for businesses. According to Fazio, DPS reconsidered the need for additional medical cannabis dispensaries and put a suspension on the application process.

DPS did not provide a fuller explanation for the decision on its website and has to respond to a request for an interview.

However, pro-cannabis advocates, entrepreneurs and patients raise suspicions on the DPS’ reasoning.

“It doesn’t make a lot of sense to me because the individuals at DPS who have been working on this program have done a really good job within their statutory confinement, especially with how restrictive the program is and how much political pressure they are under,” Fazio said. “So, why wouldn’t they have done their due diligence and looked at the legislation passed earlier this year and how many potential patients there could be?”

Some critics point at the government’s ability to gate keep and control the profits of the medical cannabis industry.

“Perhaps they recognize the power of this plant, and are attempting to keep it in the hands of the powerful to control cash flow,” said Nathaniel Czerwinski, who studies hemp science as an offshoot of his own medical use of cannabis to treat his epilepsy.

Medical cannabis industry has the potential to bring millions, if not billions of dollars into the state. The cannabis industry may be so profitable that estimates show the market would generate $41 billion nationwide by 2028, according to Barclays.

The potential for more medical dispensaries to open in Texas was a response to the expansion of House Bill 3703, commonly referred to as the Compassionate Use Act.

Stephanie Klick, a Republican state representative from Fort Worth, spearheaded the push to expand the list of medical conditions to include all forms of epilepsy, seizure disorders, multiple sclerosis, autism, terminal cancer and neurodegenerative disorders that can be legally treated by cannabis. Her bill was passed and signed by Texas Gov. Greg Abbott on June 14, and became effective immediately.

Texas’ Compassionate Use Act of 2015 exclusively applied to patients with intractable epilepsy. The program provided a registry of physicians who are willing and able to prescribe low THC-hemp products. Medicinal hemp products may not contain more than .5% THC.

Eligible patients were required to receive a cannabis prescription from two physicians before purchasing the prescribed cannabis oil, but the expansion of HB 3703 eliminated this requirement.

According to data from the Epilepsy Foundation of Texas, there are about 150,000 cases of intractable epilepsy statewide. However, with the expansion of the program, medical cannabis may now be legally provided to an estimated 1.5 million Texans.

“We went ahead and did a cursory look at how many people have ALS in Texas, how many people have terminal cancer – and we looked at how many people died from cancer each year in Texas  –  and more,” Fazio said. “The state of Texas has not published a firm number though. That’s just our precursory look.”

DPS’ main obligation is to ensure reasonable statewide access to all those in need. With only three operating medical dispensaries across the state, questions are raised about the motives behind the suspension of the application process.

The three licensed dispensaries, including Compassionate Cultivation located south of Austin, were licensed in 2015 with the initial passing of the Compassionate Use Act. DPS was mandated to accept a minimum of three applications out of the 43 applications received. According to Fazio, the other 40 were not rejected, but rather had “pending status.”

“They (the operating dispensaries) know they are losing millions of dollars because of how restrictive the program is, but finally they’re going to get more patients in and they’re finally going to start to see a return on their investments and the state of Texas won’t license more businesses for them to compete with,” Fazio said.

However, DPS said the pause on the application process is only temporary, and Klick seems to think this is only a bump in the road.

“Hang tight for now,” Klick said in a public statement. “This is likely just a temporary delay until we know which of the incurable neurodegenerative conditions are appropriate to be included on the list.”

A list of over 100 neurodegenerative disorders and its symptoms was published by the Department of State Health Services on December 2.  Examples of neurodegenerative disorders include Alzheimer’s and Parkinson’s diseases, and several neurotransmitter defects. These additional patients are now able to receive medical cannabis under the law.

Pro-cannabis advocates are hopeful these additional patients will put pressure on DPS to re-open the application process.

“A longer hold or even a backpedal on this road to legalization would do more harm than good,” Czerwinski said. “The fact is, the resistance to this industry has everyone from the most laid back hippie to the most high-powered suit scratching their heads.”