Illinois Gov. Bruce Rauner's administration on Friday voted not to add any new conditions to the medical marijuana program, causing a marijuana market research company to release a gloomy forecast for the state's pot retail sales. (Seth Perlman, Associated Press file)

Medical marijuana market in Illinois loses steam as gov restricts expansion

CHICAGO — A market research company is growing pessimistic about Illinois medical marijuana, telling investors that retail sales could reach just $15.6 million in 2016 due at least in part to moves by Gov. Bruce Rauner’s administration to limit the program’s expansion.

ArcView Market Research released its projections Monday exclusively to The Associated Press to coincide with the company’s annual guide, which estimates the national cannabis market for 2016 at $6.7 billion.

Last year, the California-based company was predicting an Illinois market of $36 million in 2016. CEO Troy Dayton said a change in methods means comparing the two predictions “isn’t apples to apples,” but that Rauner administration decisions did affect this year’s gloomier forecast.

The Illinois figure takes into account a decision Friday by state officials not to expand the state’s program to chronic pain and seven other conditions. About 4,000 Illinois patients can buy the drug, and Dayton predicted some Illinois businesses will close if the slow pace of patient approvals continues.

“Either there is going to be some shift in the coming years to expand things or you will probably see some of these businesses fail,” Dayton said.

Attorney Bob Morgan, who helped write the marijuana regulations in former Gov. Pat Quinn’s administration, sees a brighter picture.

“Most of these Illinois businesses have long-term financial security and knew it would take several years to recoup their investments,” Morgan said Monday.

ArcView’s report predicts the Illinois market will reach $23 million in 2017, the year the four-year pilot program is set to expire.

Only two of 23 states with medical marijuana programs have sunset clauses: Rhode Island had one, but later made its program permanent. New York’s law, enacted in 2014, expires after seven years.

The Illinois Legislature could extend the program with the governor’s signature. Pharmacist Joseph Friedman, co-owner of a suburban Chicago cannabis dispensary, said he fears Rauner will justify letting the program die based on low patient numbers and physicians’ lack of interest.

“In two years, the governor will look at it and say, ‘Doctors aren’t really behind it, let’s cancel it.’ It will be a self-fulfilling prophecy,” Friedman said. Still, he said, he’s in for the long haul.

“No one’s going out of business right away, including us,” Friedman said.

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AP Medical Writer Carla K. Johnson can be reached on Twitter at @CarlaKJohnson

ArcView Group’s Troy Dayton talks investing in the marijuana industry on The Cannabist Show (cue to the 9:40 mark)