February 7, 2020
Back to Black: Is the slow pace of legalisation fuelling the black market?
Advanced research, clinical trials and passionate patients campaigns has helped to progress medical cannabis legislation on a global scale. Yet despite this, patients are seemingly continuing to turn to unregulated, black market suppliers of the drug to get their medicine. What does this tell us about the state of medical cannabis?
The legalisation of medical cannabis has, in many countries, been a direct result of the years of campaigning done by the families of those with painful or debilitating conditions, coupled with an improved body of scientific research backing the effectiveness of the drug. With all other avenues of medical treatment exhausted, these patients are often seeking cannabis-based medicines as a ‘last resort’.
But even for those patients who successfully manage to affect legislative change, their fight is rarely short-lived. In many of these countries where medical cannabis has been legalised, there remain huge barriers for patient access.
Chief among these are a lack of educational resources and prescribing power among medical professionals, inconsistent regulation and licensing rules, and a general lack of infrastructure to support the supply of medical cannabis.
The ‘Legal Lag’ in medical cannabis
This extra time barrier can be illustrated clearly by the events that happened after Canada’s decision to legalise recreational cannabis in 2018.
In the first year of legalisation, the country’s health agency Health Canada discovered that it takes over a year to allocate licences, cultivate crops and supply pharmacies and dispensaries with high-quality products. This delay caused a significant shortfall in the Canadian cannabis supply, both medicinally and recreationally, with the country’s prime minister, Justin Trudeau, saying at the time that the supply issues could take perhaps another year to level out.
This delay, dubbed the ‘Legal Lag’ by our team of analysts and consultants, seems inherent in most markets that are legalising some form of cannabis for the first time, as the legislative part of the process can be completed long before the supply logistics or clinical advice can be put in place.
The Legal Lag leaves patients with a legitimate need frustrated, and without a way to access the medicine which by rights should be available to them. As a result, these patients who do have a legal right to medicinal cannabis products are turning to the only place where the products are readily available — the illicit market.
The Legal Lag in…the United Kingdom
The UK rescheduled cannabis-based products in October 2018, moving cannabis from Schedule 1 to Schedule 2 under the country’s Misuse of Drugs Act. In the UK, Schedule 2 drugs are able to be legally prescribed by doctors, and so, the government effectively legalised the use of medical cannabis.
But one year on from legalisation, a freedom of information request from October 2019 revealed that only 18 prescriptions had been written for unlicensed cannabis medicines through the country’s National Health Service (NHS). A further 104 prescriptions were given through private clinics in the same time period. By comparison, estimates suggest that there are now around 1.4 million Brits using cannabis obtained from the black market to treat chronic medical conditions.
The Legal Lag in… Australia
In the period from March 2018 to January 2019, Australia’s Therapeutic Goods Administration approved 3,000 medical cannabis prescriptions. And yet, it is estimated that there are roughly 100,000 Australians that are continuing to self-medicate with cannabis products bought from the illegal market.
In Australia, there are three main ways to access cannabis for medicinal use legally:
- Involvement in a clinical trial
- Finding an Authorised Prescribing doctor (AP), or
- Making an application via the country’s Special Access Scheme (SAS)
Despite this apparent variety of access streams, in reality, access to medical cannabis in Australia also lags behind what was promised by legalisation. Most clinical trials have a limited number of places for participants, Australian privacy laws do not allow patients to search for an AP and a general lack of awareness surrounding the SAS has discouraged doctors from engaging with the scheme.
Patients are being priced out
In addition to the Legal Lag resulting in the slow implementation of patient access schemes, some patients find themselves turning to the illicit market after being priced out of the legal one.
A bottle of MediCabilis — a cannabis-derived CBD oil — that is available through the Australian SAS can cost in excess of AU$500, with some patients on high doses spending up to AU$140 per day on this medicine. Based on the prices of products found on the black market that claim to be a similar strength, the daily cost of the same dosage could be as low as AU$7.50 if a patient chooses to use illicit products.
In the Netherlands, where an estimated half a million people use cannabis medicinally, the majority do not have a legal cannabis prescription. This is because the Dutch Care Institute has deemed that there is an insufficient amount of evidence supporting the medicinal benefits of cannabis, and so the drug’s cost should not be covered by basic health insurance. In a bid to find a cheaper alternative, patients are turning to the nation’s network of Dutch ‘coffeeshops’, which operate in a grey market.
A similar pattern is also seen in Germany, where only two-thirds of the country’s legal cannabis patients are getting their prescription costs reimbursed. Without healthcare coverage, medical cannabis treatments can cost anywhere between €4,500 and €30,000 per year in Germany.
In order to get the costs paid by health insurance, prescribing doctors are required to give a detailed explanation of why cannabis is the most appropriate treatment. With little available to doctors in the way of educational resources, many healthcare professionals find it difficult to provide adequate proof to insurers. Facing the risk of paying €25 per gram out of pocket for legal medical cannabis, compared to just €9 per gram for illicit products, it has become common practice for German cannabis patients to supplement their legal prescriptions with some black market alternatives.
The legal market does not match black market accessibility
For those who have been given a medical cannabis prescription but who have been unable to access it legally (or consistently), or who cannot afford their dosage, the black market continues to provide a more accessible alternative.
Stuck between risking prosecution and criminal conviction for the use of illicit cannabis, and waiting in pain for the legal market to iron out its access problems, patients around the world are being left with a bleak choice.
While state and national medical cannabis programmes continue to struggle with this Legal Lag, the black market appears to have gained a new kind of consumer and is being fueled by the patients that need a regulated, legal market the most.
Prohibition Partners’ consultancy team works with Fortune 500 companies from the world’s of cannabis, pharma, tobacco and FMCG. If you’re interested in discussing new opportunities within the industry, from new market entry to mainstream industry disruption, contact our consultancy team at firstname.lastname@example.org.
Back to Black: Is the slow pace of legalisation fuelling the black market?
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