Cannabis ombudsman discusses protecting medical marijuana patients during state's transition to recreational use at Benzinga's Cannabis Capital Conference.

Editor’s note: This story has been updated to more accurately depict comments by Erin Gorman Kirk at the Cannabis Capital Conference.

Erin Gorman Kirk, cannabis ombudsman from the state of Connecticut, spoke Wednesday to the importance of protecting medical marijuana patients as the state transitioned to recreational cannabis.

Many patients are giving up on medical marijuana programs and shifting to adult use, Kirk noted at Benzinga's Cannabis Capital Conference on Wednesday.

Due to the lack of original producers and seeds in the ground, "There are very few products for patients right now," she said. "We had a very good medical system, starting in 2012 and you could get all kinds of things. You could get tea from Bigelow Tea, which is a very conservative company, but they made amazing tea that our veterans loved."

Now, the three main complaints Kirk is getting are a lack of consistent medication, high prices and poor quality.

"We are trying to get new producers online, but we don’t want to have another lottery because we don't want to be Oklahoma."

Matt Hawkins, the founder and managing partner of Entourage Effect Capital, a venture capital firm investing exclusively in the cannabis industry, said this scenario is commonly seen across the nation in states that transition to recreational use. He added that in every state with a robust medical marijuana program, once there's an adult-use offering, the first one is hindered.

"It's a business decision," he said, adding that doesn't make it right. If Florida passes adult use, Hawkins said he said he’ll be curious to see what happens.

To address this issue, Kirk proposed legislation, due last Friday, suggesting the universality of products to allow recreational cannabis consumers access to the same products as medical marijuana patients.

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Licensing

Hawkins shared insights into how different licensing models affect investment opportunities. He said states typically use three types of licensing models: lottery-based, merit-based or a hybrid of the two. While lotteries may appear more impartial, they can result in legal challenges, as seen in New York. Merit-based systems, however, offer better predictability and are more attractive to investors due to their clearer investment paths.

According to him, Missouri, Ohio and Maryland are states with investment opportunities.

Discussing Connecticut's licensing model, Kirk explained how it required applicants for cultivation licenses to meet stringent social equity criteria, including proving low income and previous incarceration for cannabis-related offenses. But, this system often led to small operators relying on financial backing from larger capital firms, she explained, which sometimes resulted in predatory deals with interest rates as high as 30%-40%, undermining the goal of social equity.

Kirk and Hawkins participated in the conference panel, “The Intricacies of the Licensing Process: Its Impact on Consumers and Business.”

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Photo: Benzinga Cannabis Capital Conference, Erin Gorman Kirk, Matt Hawkins, Oct. 9, photo by Wendy Davis