Regulatory Equity: Toward a Fairer Industry for All Participants

When analyzing the future of the medical cannabis industry in Puerto Rico, it is essential to recognize a fundamental economic reality: the vast majority of the country's businesses are small and medium-sized enterprises (SMEs). They are the ones who generate jobs in communities, drive local economic activity, and keep Puerto Rican entrepreneurship alive.

The medical cannabis industry should be no exception.

Over the past few years, Puerto Rico has built one of the most rigorous regulatory frameworks in the region. Entrepreneurs have invested millions of dollars in infrastructure, technology, compliance, and training in order to operate within the law. However, as the industry matures, challenges have emerged that disproportionately affect small and medium-sized operators.

While some companies enjoy vertical integration—cultivation, manufacturing, and chains of dispensaries under a single corporate group—other entrepreneurs operate a single dispensary and depend on third-party suppliers to acquire inventory. That structural difference creates competitive challenges that deserve attention.

A Regulatory System That Recognizes Differences

Not all companies have the same economic capacity, nor do they operate under the same conditions. For this reason, public policy should consider mechanisms that acknowledge the reality of small operators.

One possibility would be to establish a tiered structure of fees and regulatory charges. An independent dispensary with a single location should not necessarily bear the same regulatory costs as a corporation with multiple dispensaries, cultivation sites, and manufacturing operations.

This model exists in numerous industries and jurisdictions where regulatory charges take into account the size of the company, its sales volume, or its level of operations.

Equity does not mean that everyone pays exactly the same; it means that obligations should be proportional to the economic capacity of each participant.

The Importance of Real Representation

Another fundamental aspect is the participation of SMEs in the formulation of public policy.

Regulatory decisions are usually made with the intention of strengthening the industry and protecting patients. However, those who live the day-to-day operation face challenges that are often not visible from a purely administrative perspective.

For this reason, it would be advisable for the Medical Cannabis Regulatory Board to establish a permanent advisory committee composed of representatives from:

• Independent dispensaries.

• Small and medium-sized entrepreneurs.

• Cultivators.

• Manufacturers.

• Patients.

• Health professionals.

• Regulatory compliance experts.

This committee would not have to replace the regulatory authority, but rather serve as a formal channel through which the practical experience of the industry could be incorporated into the decision-making process.

Promoting More Balanced Competition

One of the most widely discussed challenges among independent dispensaries arises when vertically integrated companies participate simultaneously as suppliers and competitors.

A dispensary that depends on purchasing products from a vertically integrated manufacturer or cultivator may find itself in a vulnerable position if its acquisition costs are similar to—or even higher than—the price at which that same business group sells to the final consumer through its own dispensaries.

This situation does not necessarily imply improper conduct, but it does raise questions about how to guarantee reasonable competitive conditions for all participants.

The Board and the Department of Health could evaluate measures such as:

Periodic studies on competitive practices within the industry.

Transparency mechanisms for transactions between entities.

The objective would not be to penalize business growth, but rather to prevent excessive concentration from limiting the diversity of the market.

An Industry Where Everyone Has a Place

The success of the medical cannabis program should not be measured solely by the growth of the largest companies, nor by the number of licenses issued.

A truly healthy industry is one where there is room for innovation, fair competition, and the coexistence of companies of all sizes.

SMEs are not requesting special privileges. They are asking to be heard, to participate in the conversations that affect their future, and to operate under rules that recognize the differences between a small independent merchant and a large, vertically integrated corporation.

Puerto Rico has the opportunity to become a model of inclusive economic development within the medical cannabis industry. To achieve this, the voices of small and medium-sized entrepreneurs must be part of the conversation.

The future of medical cannabis in Puerto Rico will depend on our capacity to build an industry where large, medium, and small participants can coexist and thrive. Regulatory equity does not strengthen only SMEs; it strengthens the entire industry, the patients it serves, and the economic development of the country.

Edna Díaz Ramírez

YES I CAN Dispensary