Certification Blues: Medical card providers have seen a big drop in business but hope for a better tomorrow.

While pot-related business in the state has exploded to a billion-dollar-a-year industry that is likely to increase for the foreseeable future, the trend on the patient certification side has dropped at an alarming rate.

But these referral businesses—which help patients get the recommendation they need to get a medical marijuana card—remain optimistic that Arizonans will still want medical cards even though recreational cannabis is now available in the state.

As reported in the Tucson Weedly column two weeks ago, the number of patient applications for medical cards saw a precipitous drop statewide in the first few months of 2021 over the same period in 2020.

Between Jan. 1 and April 30, 2021, fewer than 14,000 qualifying patients applied for medical cards, compared to the first four months of 2020, when nearly 95,000 qualifying patients applied, according to reports from the Arizona Department of Health Services.

While the number of people applying may have dropped significantly, overall the number of qualified patients in the state increased in the past year. At the end of April 2020, there were about 236,000 qualified patients, while April 2021 ended with nearly 308,000 qualified patients.

ADHS recently released its numbers for May 2021, reporting 2,236 new applications, so the total number of qualified patients increased to more than 310,000 within the past month.

What really sticks out though, is the drop in the number of renewals. Through May 2020, there were nearly 46,000 renewal applications compared to two reported by ADHS for the same time period in 2021. Yes, two.

"We're still on track for the average amount of new patients were seeing," said Dr Reeferalz Arizona Operating Manager Taryn Tia. "Where we got hit the hardest is (Prop 207) went into effect at the same time the two-year card was also in effect."

Dr Reeferalz has five certification clinics in the Phoenix area and one in Tucson, located at 4120 E. Speedway Blvd., and according to Tia, the number of new referrals has remained fairly static, but it's the reduction of returning patients that has really affected the business.

The number of certification renewals has naturally decreased in the wake of the passage of SB1494, which Gov. Doug Ducey signed into law in June 2019. The bill created the electronic card system that streamlined the process, but also extended the life of certifications from one to two years beginning on Aug. 27, 2019. That two-year anniversary is rapidly approaching.

Medical Miracle

In 2020, while the COVID pandemic led to record-setting marijuana purchases throughout the state (Arizonans purchased nearly 106 tons of various forms of medicinal weed, a significant increase from 2019, which weighed in at almost 83 tons), the certification business received a triple-whammy from the extended life of cards, the passage of adult-use recreational and a dearth of winter visitors, as many didn't travel to Arizona while the state was a global hotspot.

But with the relaxing of COVID protocols nationwide, a confluence of factors is giving referral clinics hope, as the expected return of snowbirds will line up roughly with the two-year mark of the new rules surrounding certifications.

"I definitely believe that we are going to start getting busier because people can get recertified 90 days before Aug. 27," Tia said. "May 27 is when we started doing our renewal emails and calls, so we're already having patients come in to renew their cards. But I definitely believe, especially closer to when they expire, most of them will return."

Tia said that Dr Reeferalz staff has received positive feedback from a significant portion of their patients—85% to 90%—who expect to renew medical certifications.

She added that although the number of patients seeking new cards has remained fairly steady, the renewal situation has reduced traffic substantially and she's had to make adjustments in staffing as a result.

"Seeing five to 15 patients a day, as opposed to when we were seeing 40 to 50 a day with new patients and renewals, was a huge hit to us, of course," Tia said. "We have brought our staffing down a little bit, which is tricky, because I know we're gonna get busy again. So it's like a double-edged sword. We've maintained the same days and the same hours, because we think it's important to stay consistent, especially with older clientele and people that rely on our hours."

Another stream of business for your local clinic is referrals from pain clinics, probation officers and those seeking protections on the job and in housing.

The CBD business has been good as well, which has also helped keep Dr Reeferalz afloat.

But the elephant in the room is the legalization of recreational cannabis. While recreational economic activity has exploded out of the gate since adult-use sales began in late January, many in the certification business believe patients will return after trying out the legal marketplace.

"People are seeing the rec program for what it is: No protections, less medicine and lines to buy product," said Tumbleweeds Health Center owner Kim Williams. "The pandemic, the two-year cards and adult-use recreational have been a triple threat. We're hoping when the anniversary comes around, we will get a lot of returning business."

Tumbleweeds will celebrate its 10th anniversary on Nov. 11, making it one of the oldest certification centers in the state, so Williams says they are holding steady and making plans to grow in the future.

"We're always coming up with new ideas and new ways to keep going," she said. "Medical will always be around. There is an educational aspect to the certification business that helps our older patients."

Tumbleweeds has five doctors on staff and, along with Dr Reeferalz, has a telemedicine program for those who cannot get out of the house or are still squeamish about going out in public.

Williams is also set to celebrate the ninth anniversary of her radio program, Belle Star & The Cannabis Kid, which streams every Wednesday morning from 8 to 9 a.m. A link to the broadcast can be found at tumbleweedshealthcenter.com.

Another feature Tumbleweeds can boast is an American Sign Language interpreter for patients with hearing impairments.

Both Williams and Tia believe the educational aspects of referral clinics and their ability to help patients learn about cannabis and demystify the process of medicating will be the cornerstone of business moving forward.

"The doctors and staff are helpful and make our patients feel comfortable with what some of them see as a big, scary process," Williams said.

Both women also expect to see the return of medical patients who have abandoned the medical card for the adult-use alternative.

Friends With Benefits

Among the benefits of carrying a cannabis card are higher possession limits, employment and housing protections, and a break in cost, as cardholders pay a lower sales tax rate.

Recreational product is only available at lower concentrations and is limited to one ounce for non-medical users, compared to 2.5 ounces for cardholders. There are also limits on non-medicinal edibles at 10mg per piece and 100mg per package, and concentrates at 5 grams. Those limitations affect many patients, including those suffering with cancer or veterans dealing with the effects of PTSD, who might use upwards of 1,000mgs per day.

Medicinal products have a current tax rate of 6.6% for the state and an additional 2% to 3% depending on local jurisdiction. Recreational sales include a 16% excise tax, so without a card the average cannabis buyer pays upwards of 25% when state and local taxes are figured in.

In order to show the difference in stark fiscal terms, Dr Reeferalz is installing a widget on its website that will tell consumers how much they can save over the course of the life of their medical cards.

Tia says that $250 worth of medical marijuana would cost about $310 on the adult-use marketplace and if a patient spends about $150 per month during the life of a card, they could save about $594.

"I think a lot of it is people tried [adult-use], and saw the cost, allotments, the potency differences, you know, the legal side of things," Tia said. "They wanted to try it and I think they're still just making their way back to get certified."

But ultimately, particularly for elderly patients and veterans, it's about security, protection and education.

"We expect to see the medical program survive," Williams said. "It's important and if it went away the anxiety level would be high. And old people like to talk to doctors."

For information about Dr Reeferalz and the services they provide go to drreeferalz.com.

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