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Maryland Lawmakers Walk Tightrope On Medical Marijuana

04/15/2013 03:52 pm ET | Updated Jun 15, 2013

The Maryland Senate has overwhelmingly approved a bill that puts the state one step away from becoming the 19th in the U.S. to allow the use of medical marijuana. The bill now heads to the desk of Gov. Martin O'Malley who has indicated he will sign it into law.

The measure would create a 12-member independent panel to administer what is described as a "compassionate use" program geared toward seriously ill patients for whom traditional treatment options are insufficient. Only state-regulated research programs tied to university medical centers would be eligible. Participation is optional.

The appointed panel would set criteria for patient participation in the program. It would also assume responsibility for licensing the growers who will supply the marijuana. This approach is more restrictive than the other 18 states who allow the use of medical marijuana. All other states allow patients to grow marijuana themselves or to purchase it directly from private dispensaries licensed by the state.

Economically speaking, the law will do little to encourage entrepreneurship. The private sector will have no opportunity to profit from potentially lucrative sales to patients. At the same time, opportunities may exist for investors to profit on the supply side. The bill stipulates that participating hospitals could obtain marijuana either from the federal government or state-licensed producers. Because federal law prohibits the feds from doing so, the business of growing marijuana for the program would be left to private cultivation operations which could, in turn, create additional opportunities for ancillary companies to help them meet growing demand.

While medical marijuana advocates applauded the move, they were quick to point out that it's uncertain whether the program will ever bear fruit. Medical Marijuana Business Daily is reporting that, among hospitals eligible for the study, only one - Sinai Hospital in Baltimore - has expressed strong interest in participating. Johns Hopkins has indicated it will consider doing so.

Because the burden of designing and gaining approval of any new program rests with the hospital in question, it is unlikely that many others will follow suit. Hospitals, understandably risk averse, would have to take on some significant ones, especially considering that they would be running headlong into federal drug laws that completely outlaw marijuana use even when it is dispensed on compassionate grounds.

However, legal relief could be on the way. Congress will be considering a recently introduced bill that would repeal the federal government's marijuana prohibition by amending the Controlled Substances Act. The measure, in the spirit of federalism, would cede control of medical marijuana to the states. It would then fall on each state to determine whether individuals and businesses, including marijuana dispensaries that comply with state laws, would be immune from federal prosecution.