California, Hashish, and Telehealth: Half 2

In my last post in this two-part series, I specifically focused on California’s current relationship with telemedicine and cannabis. Undoubtedly, doctors are free to recommend medical cannabis to qualified patients via telehealth platforms, apps and technologies, provided the doctor follows Prop. 215 as well as telehealth laws and regulations.

This post details the legality of the California legal financial and business relationships between the telehealth platform, the doctors who use that platform to treat patients, and medical cannabis companies.

As you may know, there are two types of telemedicine business models: synchronous (real-time) and asynchronous (“store-and-forward”) platforms and apps that are typically owned and operated by third-party non-physicians. According to my last post, the most important question we get in this area is how the telemedicine platform can have a financial or referral relationship with a medical cannabis company – usually a pharmacy – so that patients who use the platform have a credible and consistent source, from which they purchase their medicinal cannabis in accordance with state cannabis laws. The answer here is layered and complex.

Doctors in California are prohibited from either providing cannabis to their patients or helping them obtain it. According to Conant v. Walters, doctors have a proprietary first fitting right (based on the doctor-patient relationship) to discuss the use of medicinal cannabis with their patients. This discussion and / or suggestion, if any, is not a reason for the Drug Enforcement Administration to revoke or investigate the withdrawal of medical license on the basis of aiding and abetting, and / or criminal conspiracy (as cannabis is still nationwide illegal). At the same time, this case makes the following clear:

[a] The doctor would assist and benefit by acting with the specific intention of providing the means to acquire marijuana to a patient. . . Similarly, a conspiracy would require a doctor to have knowledge that a patient intends to acquire marijuana, agree to assist the patient in acquiring marijuana, and intend to assist the patient in acquiring marijuana.

Further, under state law and the guidelines of the Medical Board, it is unlawful for a doctor recommending medicinal cannabis to accept, solicit, or offer any form of compensation from or to a cannabis company if the doctor or his immediate family has a financial situation have interest in this facility. “Financial Interest” includes, but is not limited to:

any type of property interest, debt, loan, lease, compensation, allowance, rebate, rebate, refund, dividend, distribution, subsidy, or other form of payment, direct or indirect, whether in cash or otherwise, between a doctor and an individual or entity to which the doctor refers a person for a good or service.

In addition, doctors in California absolutely cannot be hired at a medical cannabis dispensary to recommend cannabis to medical cannabis users who are frequently in the business (and don’t even think of putting a medical cannabis “doc-in-the-box”) have neighbors either). In the end, doctors must avoid any financial or referral relationship with a cannabis company when it comes to patient referrals.

Now the relationship between the telehealth platform and the doctors is regulated by, among other things, the CPOM (Corporate Practice of Medicine) bar here in California which is extremely strict (we wrote here about the CPOM problems created by non- Doctors doing ketamine business with doctors and the same issues also apply to telehealth. In providing services to patients and doctors in California who use this technology, the telehealth company must be very careful not to make illegal fee splits, setbacks, and referrals, and cannot make medical decisions or improperly influence the doctors The same applies to patient volume, the frequency of doctor visits and the clinical treatment of patients.

Knowing all this, can the telehealth company (and not the doctors on the platform) have a financial relationship with a medical cannabis dispensary here in California? The answer is “probably not” unless you want to attract the wrath of the medical panel and see very severe fines and penalties, some of which are criminal offenses. Why? Because a cannabis clinic or pharmacy may not directly or indirectly employ doctors to make cannabis recommendations. Financial ties are likely dangerously close to indirect employment, and there is likely too great an influence on doctors not only to continue recommending medical cannabis but also to send their patients to selected cannabis vendors.

The main point of these California restrictions is to ensure that a physician maintains independent medical judgment and acts in the best interests of his patients. Among other things, it is not a route that doctors are financially motivated to take on the platform if a telehealth platform promotes a pharmacy or has a financial interest in or with a pharmacy and whose goal is to bring platform users to that pharmacy as many cannabis recommendations as possible . After all, most telemedicine doctors are paid per consultation / visit. If a doctor ensures that patients return to the platform for their services and also go to the pharmacy advertised by the platform, this scenario violates cannabis laws, telehealth laws, and CPOM laws.

Ultimately, Telehealth and cannabis are only so lucrative in California because of CPOM restrictions and because cannabis laws generally forbid doctors from doing much more than legitimate cannabis recommendations. This certainly doesn’t mean that telehealth companies don’t have other robust opportunities in the cannabis space (like education and intellectual property). But they are definitely not about recommendations and setbacks from cannabis companies in exchange for an increased number of medical customers created by telemedicine technology.

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