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Marijuana News Roundup: Legal Pot Could Save $1 Billion in Medicaid Expenses

Paul Ausick

Published: April 23, 2017 10:31 am

Last Updated: January 12, 2020 12:44 pm

If all 50 states and the District of Columbia had legalized medical marijuana in 2014, the savings in fee-for-service Medicaid would have totaled $1.01 billion. According to research published last week in “Health Affairs,” the use of prescription drugs in fee-for-service Medicaid was lower in states where medical marijuana was legal than in non-legal states.

Researchers Ashley C. Bradford and W. David Bradford had conducted a similar survey on the impact of medical marijuana on Medicare Part D (prescription drug coverage) enrollees. In that study, their findings “suggested that patients in states with such laws were substituting medical marijuana for prescription drugs.” We took a look at marijuana use, both medical and for recreational purposes, among people aged 65 and older in another story this morning.

The authors concluded that in the states where medical marijuana use was legal in 2014, Medicaid savings ranged from $260.8 to $475.8 million, or about 2% of total Medicaid spending. That’s an average of $19.825 for the 23 states and the District of Columbia where medical marijuana use was legal in 2014. They note:

Given that total spending observed in the fee-for-service Medicaid State Drug Utilization Data for 2014 was just under $23.9 billion, the observed savings related to the laws were equivalent to about 2 percent of the total spending. If all states had had a medical marijuana law in place in 2014, the national savings for fee-for-service Medicaid would have been approximately $1.01 billion.

Who’s the New Drug Czar? Here Is What He Means for Marijuana
After months of speculation, President Donald Trump apparently has found [his] drug czar. Congressman Tom Marino, an early and vocal supporter of Trump’s run for the White House, reportedly will be nominated director of the Office of National Drug Control Policy (ONDCP).

According to CBS, the first news outlet to  break the news of the pending announcement, reported that “Marino is in the final stages of completing his paperwork and an official announcement is forthcoming.” If true, Marino will resign from his seat in the House, which he has held since 2011.

The position is not a cabinet post, but requires a Senate confirmation. Historically, the ONDCP advises the executive branch on drug-control issues and coordinates activities to combat drug-related issues. The agency’s charter includes fighting to reduce illicit drug use, putting a stop [to] illegal narcotic manufacturing and trafficking, reducing drug-related crime and violence, and improving drug-related health consequences.

“My understanding is that Tom has a deep understanding of the issue and is excited to get started,” Kevin Sabet, who served for three presidents as an ONDCP adviser, told CBS News.

The National Organization for the Reform of Marijuana Laws (NORML), a leading cannabis advocacy group, gives Marino a “D” grade for his positions. The former prosecutor has a long record of voting against progressive marijuana legislation, including opposing amendments that would have allowed Department of Veterans Affairs doctors to recommend cannabis to veterans suffering from post-traumatic stress disorder.

Read more at Salon.

Marijuana Convention Highlights New Products in World of Weed
Thousands of marijuana enthusiasts and pot shop entrepreneurs are swarming the John B. Hynes Veterans Memorial Convention Center this weekend to check out the budding industry’s latest innovations, including state-of-the-art fertilizers, indoor grow set-ups and the latest extraction methods at the New England Cannabis Convention.

The event, which organizers say is expected to draw more than 5,000 visitors and 150 exhibitors this weekend, is the first since [Massachusetts] legalized marijuana for recreational use in November and comes a little more than a year before state legislators expect the first retail shops will be able to open their doors to customers.

It also comes at a time when many would-be entrepreneurs are worried about a federal crackdown on a booming marijuana industry that has been legalized for both recreational and medicinal purposes in eight states, but is still illegal in the eyes of the federal government, though many who gathered yesterday were undeterred by federal threats.

“As bad as it is to say, it’s similar to gay marriage,” said Marc Shepard, who helped organize the event. “The progressive ball goes down the hill. It never goes back uphill. I think the tipping point has been reached when a quarter of the country legally allows it. How much longer can it remain illegal federally when it is legal in all the states?”

Read more at the Boston Herald.

Homeland Security Sec. Kelly Says Marijuana Is a Gateway Drug
According to The Washington Examiner, Department of Homeland Security secretary John Kelly said that marijuana is a gateway drug during a speech at George Washington University on Tuesday. “And let me be clear about marijuana. It is a potentially dangerous gateway drug that frequently leads to the use of harder drugs,” says Kelly. “[U.S. Customs & Border Protection] will continue to search for marijuana at sea, air and land ports of entry and when found take similar appropriate action.” The DEA recently dropped any mention of the gateway drug theory. Many argue it is a myth propagated by drug war stalwarts and even the National Institute on Drug Abuse won’t call it a gateway drug anymore.

During a crime committee meeting this morning, Attorney General Jeff Sessions mentioned a link between the illegal marijuana trade and cartel violence. “We have quite a bit of marijuana being imported by the cartels from Mexico- this is definitely a cartel-sponsored event,” says Sessions. According to The Washington Times, Sessions mentioned violence involving marijuana distribution in the nation’s capital, Washington D.C., where cannabis is legal. “So it remains a significant international criminal organization, the marijuana network,” says Sessions. This is not the first time the Attorney General has suggested a link between the plant and violence. Back in February, Sessions claimed that legal cannabis has led to an increase in violence.

The statements made this morning are the latest in a series of contradictory and uncertain messages on federal cannabis policy by the Trump administration. “DHS personnel will continue to investigate marijuana’s illegal pathways along the network into the U.S., its distribution within the homeland, and will arrest those involved in the drug trade according to federal law,” says secretary Kelly. That message, however, contradicts statements he made earlier in the week.

Read more at Cannabis Industry Journal.

Wall Street Analyst on 4/20: People Are Picking Marijuana over Alcohol
Instead of mixing the two, consumers appear to be choosing marijuana over alcohol.

That’s according to a Thursday note from a team of Cowen analysts led by Vivien Azer, which downgraded Molson Coors stock to Wall Street’s equivalent of “hold” from “buy.”

“We believe alcohol could be under pressure for the next decade, based on our data analysis covering 80 years of alcohol and 35 years of cannabis incidence in the U.S.,” the team noted. “Consumer survey work suggests [about] 80% of consumers reduce their alcohol consumption with cannabis in the mix.”

Historically, cannabis and alcohol consumption has had an inverse relationship in the U.S.—at least according to the numbers analyzed by Azer. When cannabis trials rose 18% in the 80s and 90s, alcohol consumption fell 22%.

Over the past seven years, while cannabis usage among those between 18-25 years old in the U.S rose 4.6%, alcohol use has fallen 2.5%.

Read more at Fortune.

We noted a similar story in March, suggesting a 7% drop in beer sales.