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Dispensaries in Rhode Island Really Want to Avoid More Competition


Competition has always been a double-edged sword. Established businesses try to avoid it because it eats into their profits, yet it is a great thing for consumers as it is the best way for them to access the highest quality products/services at the lowest price. And when it comes to businesses in the cannabis industry – whether in the medical or adult-use sector or both – there is the added problem of massive government regulations and taxes. This means that entrepreneurs have to make huge investments just to enter a market with quickly diminishing profit margins, which gives them extra incentives to avoid more competition at all costs.

The description above certainly applies to medical marijuana dispensaries operating in Rhode Island. They want to avoid competition so much that they are looking for ways to help the state make up a $5 million budget shortfall that doesn’t involve allowing more dispensaries to open in the state.

“We’re very sensitive to the state and its challenges,” Chris Reilly, a spokesman for the Thomas C. Slater Compassion Center, told members of the RI House Finance Committee. “And if there is a way to find the $5 million that you need to plug the budget hole that you need for the coming fiscal year, we’d like to be part of the solution.”

Rhode Island currently has 3 medical cannabis dispensaries, but there are plans to increase that number to 15, a plan that would also bring in an estimated $5 million more in tax revenue. The plan would also have the natural effect of lowering the prices that patients will pay for their medicine, shrinking dispensary profits margins even more, which could knock some of the dispensaries out of the market altogether.

That isn’t the only thing that has RI dispensaries worried; there is the looming threat of neighboring Massachusetts’ recreational marijuana industry coming online later this year – something that could further erode the ability of dispensaries in Rhode Island to get enough sales volume to stay in business.

While I’m sympathetic to the plight of dispensary owners – and less so to states that can’t manage to balance their budgets – the answer to making up budget shortfalls can’t be screwing over medical marijuana patients. Lower prices, better quality and more choice will always be beneficial to those patients, and depriving them of those things is the wrong path to take.

A better solution is for state and local governments to lessen regulations and taxes on businesses in the medical cannabis industry, which will allow more of them to be profitable and stay in business. This will lead to more sales and more tax revenue in the long run as cannabis consumers continue to make the switch from the illegal market to the legal one and as more jobs are created, the tax base from which revenues are collected will continue to expand.