Small Business

New York's pot program rolls out

Inside Columbia Care, one of New York City's first medicinal marijuana dispensaries. The Columbia Care shop is located on 14th Street right off Manhattan's Union Square.
Jodi Gralnick | CNBC

As the marijuana experiment unfolds in New York, the state's first patients are receiving medicinal cannabis from five companies that received state licenses last July.

The dispensaries officially opened their doors Thursday. Details are now emerging about participation rates among physicians and patients. New York state's highly restrictive program had registered 174 doctors and 71 patients, according to an update Friday from the state Department of Health.

"Governor [Andrew] Cuomo gave us an extremely ambitious timeline to get the Medical Marijuana Program up and running, and I am pleased that we have met his goals," state Health Commissioner Howard Zucker said in a statement last week. "Our program ensures the availability of pharmaceutical-grade medical marijuana products for certified patients and establishes strict regulatory controls to protect public health and safety."

To be clear, the bar to access medicinal marijuana is high. New York's program makes medicinal marijuana available to patients suffering from only 10 diseases including cancer, HIV or AIDS, ALS, Parkinson's and Huntington's Disease. Prescribing doctors also must be certified, including taking a four-hour course.

Companies awarded licenses said a rush of initial patients was not expected for the program's launch.

"This is a very sophisticated medical system, it's not a free-for-all," said Dr. Kyle Kingsley, chief executive of Vireo Health, the Minnesota-based parent company of Vireo Health New York, one of the medicinal license recipients in New York.

Kingsley added he was pleasantly surprised at how many doctors were signed up so far given the quick timeline for certification. "It was also done on an unprecedented timeline, implementing the program in just five months," he said.

As a physician, Kingsley has had experience opening a dispensary in Minnesota in July last year, and said initial patient numbers aren't a sign of future participation rates.

In Minnesota, "we began on July 1, and so far the state has around 866 patients enrolled," Kingsley said.

"In New York, I would have expected only 20 to 30 doctors" given the timeline, and New York already has more than 170 doctors participating, he added.

Read MoreA look inside Manhattan's first medical marijuana dispensary

In New York, the expectation is for more patients and participating doctors as the marijuana companies acquired the coveted licenses in part through hefty fees. Every company applicant shelled out a nonrefundable $10,000 fee to apply, and an additional $200,000 to register. Companies that were not selected were refunded the $200,000, according to the health department.

Longer term, doctor participation in marijuana programs may be tricky, especially for states that have approved recreational and medicinal uses as medicinal programs tend to require more paperwork and certification.

"Even in a mature state like Colorado, we don't see that many doctors coming on board — this is a big bottleneck in the industry, especially in a dual market," said Matt Karnes, founder of GreenWave Advisors. "Many people [consumers] think it's easier to go to a recreational facility."

In these cases, "patients have to be proactive and ask for it, rather than having doctors prescribe it," Karnes said.