WHAT IS PROCUREMENT?

Procurement is the process of selecting vendors, establishing payment terms, strategic vetting,
selection, the negotiation of contracts and actual purchasing of goods. Procurement is
concerned with the acquisition all of the goods, services, and work that is vital to the
cannabusiness. Procurement is, essentially, the umbrella term within which purchasing can be
found.

HOW IS PURCHASING DIFFERENT FROM PROCUREMENT?

Purchasing is the method by which goods and services are ordered. Purchasing can usually be
described as the transactional function of procurement for goods or services, and therefore is
considered a subset of procurement. The purchasing process often also includes payment and
receiving.
Because purchasing is a subset of the overarching procurement process, the terms of
“procurement” and “purchasing” are often used interchangeably.
https://growersnetwork.org/industry/procurements-role-cannabis/

Hospitals, Medical Marijuana and Procurement: A Few Obvious Questions

TOM FINN
- July 24, 2018 8:00 AM |

In a recent conversation I had with a long-time consultant to hospitals (specialized in matters of

compliance), I listened to a story about a recent run-in between a former professional athlete
and staff at a Florida hospital. Apparently, during his admission interview, the player confirmed
his use of state-approved marijuana to treat his chronic pain. In turn, the attending staff insisted
that he turn it over. Not to bore you with the details, but when this hulk of a man refused, the
hospital threatened to have its security forcibly take his medication. Suffice it to say that this
particular patient was not motivated to comply. In fact, he belligerently welcomed the hospital’s
next move.
Although medical marijuana is now legal in 31 states, and its effectiveness in treating pain,
numerous seizure disorders, nausea and other ailments is scarcely questioned anymore, the
substance is still illegal at the federal level, where Medicare/Medicaid reimbursement is
adjudicated. So, yes, failure to comply with federal law means hospitals run a risk they cannot
afford.

Using the State of Florida as the example, nearly 75% of voters overwhelmingly made their
preference clear. There are 135,000 Floridians already “state approved” for marijuana use, and
the numbers are increasing at a clip of more than 1,000 each week.
 Briefly, the approval process goes like this: Physicians attend a state-provided education
seminar on medical marijuana use. After they’re certified, they are authorized to evaluate their
patient-candidates and make recommendations. If they believe the patient will benefit, they can
make a recommendation that allows the patient to apply to the state for medical marijuana use.
If all goes well, the patient is then issued a card, and not unlike a driver’s license, that patient
can use it to purchase marijuana at any number of state-licensed dispensaries.

The problem is, when patients using medical marijuana go to a hospital, all bets are off. Not only
for them, but for a hospital that frankly has no option other than to confiscate their marijuana (or
try to do so), assuming they know about it in the first place. Keep in mind, the patient is legally
authorized by the state to use medical marijuana, so the inconsistency here is loaded with
potential legal problems. Despite all of this, when the talk of medical marijuana comes up, most
all of the hospital officials I have spoken with readily admit that they haven’t even given the
subject much thought.
Although there aren’t many, I found a law firm that specializes in helping hospitals document
and institute medical marijuana policies and procedures. Yes, their practice is growing.

In a conversation with Elizabeth Hodge and Jonathan Robbins of Akerman LLP, Ms. Hodge
stated that “while we don’t want to give our hospital clients a new headache, the list of matters
they haven’t considered is nothing short of stunning. Bottom line, when discussing with clients
the myriad potential liabilities associated with medical marijuana, it’s not hard to get their
attention.”

For example:
 Will hospital procurement departments competitively source their demand for medical marijuana
or will it be left up to patients? How does a bedridden patient obtain medical marijuana when
he/she runs out? What about hospitals that operate across state lines? What are the supply
chain management ramifications?
 If hospitals are finally able to write medical marijuana-use “prescriptions,” will the underlying
requirements mirror existing narcotics regulations? How will the supply chain be managed?
Who is qualified to develop such documentation?
 Whether a hospital adopts a more “enlightened” or laissez faire approach isn’t the point. If
hospitals simply look the other way when patients use marijuana, it presents a perfect
opportunity for disgruntled staff and other patients — anyone who doesn’t support medical
marijuana use — to report the matter to authorities.
 What about a patient who suffers a seizure during a hospital stay (i.e., a patient who was
otherwise being effectively treated by medical marijuana)? Does the hospital have a legal
 liability on its hands? For all the right reasons, malpractice lawyers will have a field day with this.
Go ahead and extend the same problem to chemotherapy patients who benefit from medical
marijuana use or, for that matter, any chronic pain sufferer who is prescribed an opiate (as
replacement therapy) and then becomes addicted.
 From a more general liability perspective, are the malpractice insurance companies accounting
for such risk in their current premiums? Are such issues even covered?
 Are hospital BOD members and officers aware that they can be named in such lawsuits? Are
they aware of their personal liability?

Many of us have sat through a sexual harassment seminar. As we know, human resources
departments were obliged to reteach and then certify us on how to treat each other in the
workplace. Similarly, global corporations force staff who travel overseas to understand their
corporate responsibilities and potential personal liabilities relative to foreign corrupt business
practices. It would seem logical, therefore, that an obligatory medical marijuana policies and
procedures program is next up, presenting a great opportunity for professional services firms to
provide clarity.
While researching this piece, my surprise was not about the abundance of unanswered
questions. Rather, my surprise was based on the fact that no one seems to be asking them.

http://spendmatters.com/2018/07/24/hospitals-medical-marijuana-and-procurement-a-few-
obvious-questions/