Wellcana Group, the Baton Rouge-based medical marijuana grower licensed by the LSU AgCenter, expects to slash the price of its wholesale products for the second time this year.
The price reduction was recently approved by the LSU AgCenter.
Wellcana sells directly to nine state-licensed pharmacies, some of which have already been discounting the retail price of medical marijuana tinctures for several months in response to patient demand for more affordable medication.
"We think that this a big step," said John Davis, chief executive officer of Wellcana.
Health insurance typically does not cover medical marijuana because it doesn't qualify and is still considered an illegal drug by the federal government.
New Louisiana laws allow any doctor to recommend the use of medical marijuana for any condition that's considered significantly debilitating.
"Hopefully this opening up, in combination with different (medical marijuana) delivery systems, will help ramp up the Louisiana market," Davis said.
In an effort to spark an otherwise sluggish market, the company is dropping its prices to be aligned with mature market prices in other states.
"We're cutting (profit margins) razor thin until the market has more patients and we have more patients," Davis said. "We're going to push the price (down) to where all the mature markets have set tincture prices. Nobody is going to say our products aren't affordable."
Wellcana has been selling its medical marijuana since August 2019 to pharmacies. There have only been between 1,500 and 1,700 patients a month since the program began.
Production at Wellcana has not been impacted during the coronavirus pandemic since manufacturing is considered an essential business. However, construction for an expansion of its manufacturing facility in Baton Rouge was postponed for several months. It is expected to resume in July. It enables the company to sell new products such as oral strips and edible chews.
Wellcana also is expanding into a new product that is a THC concentrate, which can be blended into food and drinks. By contrast, a tincture is taken under the tongue. The concentrate is expected to roll out by the end of the month after state lab approval.
Patients could "make their own cookie; it's a highly refined concentrated extract," Davis said.