Medical marijuana companies in Minnesota are going through bad times after registering a substantial financial loss in the past two years. Companies manufacturing medical marijuana in Minnesota have recorded a loss of $11 million in the past two years.
In financial documents, obtained by the Associated Press, LeafLine Labs admitted losing $4.7 million last year and $2.2 million in 2015. Another company, Minnesota Medical Solutions, disclosed a loss of $1.2 million in 2016 and $3 million in 2015.
The companies are reeling under immense financial crisis with much of the loss happening in 2015 compared to 2016. Stating in an email, a spokesperson from MinnMed said, “From a financial perspective, 2016 was a much better year than 2015. Revenues increased from less than $500,000 to more than $2 million, while losses decreased from approximately $3 million to $1 million.” However, the company spokesperson said that the firm was not in a position to predict anything for the current year as it was too early to do so.
Business dipping despite growing clientele
The companies are experiencing a dip in sales despite growing number of users in the state. In 2016, the Minnesota health department allowed cannabis medication for people who suffer from stubborn pain. This move almost doubled the visits of patients to Minnesota’s eight dispensing clinics until August last. Companies have welcomed this move by the state health department, as it would increase the access to marijuana for those who need to assuage their pain.
“As a physician-led company, we embrace Minnesota’s medical model, as it helps ensure that patients have access to high-quality medical cannabis,” said MinnMed in an e-mail. “We also applaud (the Minnesota Department of Health) for adding intractable pain as a qualifying medical condition. This decision helped provide more Minnesotans with greater access to medical cannabis and offers a safer alternative to those patients currently using opioids.”
Loss incurred in setting up business
Companies said that they had put patients over profit, and were thrilled in helping relieve their pain. Several companies like MinnMed and LeafLine Labs have lost the majority of their money in the bumpy debut year while setting up their operations. MinnMed invested $5 million in 2015. Trying to grasp the patient requirement, the viability of the market and people’s response is a huge challenge for cannabis companies as they venture out into the market.
It is due to its restrictiveness also that these medical marijuana companies are not reaping dividends yet. Companies like these two depend a lot on the increase of pain patients to break even and gain profits from their business of selling medical marijuana. However, with the health department’s policy to extend the periphery by inducting patients with intractable pain, the companies are hopeful of sunny days ahead.
Pain and addiction
Marijuana is addictive and for that matter, any painkiller is. People tend to continue using their pain medication long after it is not needed or beyond the doctor’s prescribing period. This is primarily because they get addicted to them. Today, opioid addiction is the biggest public health concern in the U.S. However, with treatment people can wean off addiction and lead a sober life.
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