Interest grows in forming medical cannabis business in Iowa

But number of would-be users remains low, for now

(File photo) The Iowa State Capitol building in Des Moines, photographed on Tuesday, June 10, 2014. (Liz Martin/The Gazette)
(File photo) The Iowa State Capitol building in Des Moines, photographed on Tuesday, June 10, 2014. (Liz Martin/The Gazette)

DES MOINES — There appears to be strong interest in creating a medical cannabis business under Iowa’s newly expanded law.

But the number of card-carrying, would-be users remains minimal.

Earlier this year, the Legislature extended and expanded an existing but limited medical cannabis law to allow for more ailments to be eligible, for up to two businesses to grow marijuana and produce medical cannabidiol in Iowa and for up to five businesses to sell the product.

Previously, Iowans could obtain medical cannabidiol only to treat epileptic seizures, but the law did not allow for the production and sale of the medicine here.

With the barriers now lowered, roughly 50 individuals and businesses have reached out to the state Department of Public Health to inquire about the process for starting a medical cannabis business, said Randy Mayer, coordinator of the department’s medical cannabidiol office.

The department plans to put out a request for proposals for manufacturers this fall, likely in October, Mayer said, with the goal of having up to two producers licensed by December.

Then, the department will put out a request for proposals for dispensaries in January, with the goal of having up to five sellers licensed by April, Mayer said.

The businesses must be licensed and ready to operate by Dec. 1, 2018.

“We have had some interest,” Mayer said. “A lot of people seem fairly knowledgeable about this process.”

Process in the works


Despite the interest, the nonpartisan Legislative Services Agency predicts a small number will ultimately submit applications to start a medical cannabis business.

The application fees are $7,500 for manufacturers and $5,000 for dispensaries. The agency estimates there will be a handful of applications for the two manufacturing licenses and about 10 applications for the five dispensary licenses.

Mayer said many of the interested parties have had specific questions about establishing a medical cannabis business, but he cannot answer most until a medical cannabidiol board is established. That board will be responsible for implementation of the newly expanded program; its members are to be appointed by Gov. Kim Reynolds.

Mayer said he is hopeful the board is established in time to meet in October and discuss rules. He said he also assumes there will be plenty of public feedback.

“A lot of the answers we’re expecting to come from the medical cannabidiol board,” Mayer said. “They will have to address the form (of the product) and quantity, what types of products are going to be manufactured for which conditions.”

The program expansion also freed the department to license up to two out-of-state medical cannabis sellers. But Mayer said the department is not pursuing that right now, at least not until it gets assurances from the state Attorney General’s Office.

The department’s concern is that federal law prohibits the transport of medical cannabis across state lines.

“At this point, we’re going with the two manufacturers and five dispensaries until we receive guidance that we should or should not pursue that avenue.” Mayer said.

Few cards issued YET


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The early interest in creating a medical cannabis business in Iowa appears strong despite the fact program participation remains low.

As of Tuesday, there were just 114 active registration cards in the program, according to the state Department of Transportation, which issues the cards.

In an effort to boost the number of Iowans who could be helped by the medical cannabis program, the state expanded the law to include the coverage of more ailments, including cancer, multiple sclerosis, Crohn’s disease, Parkinson’s disease and any terminal illness.

But since the program was expanded in mid-May, only 48 new cards have been issued, according to state figures. And that number does not necessarily represent only individuals who are new to the program; it could include some who were in the previous, limited program as well, state officials said.

State Sen. Joe Bolkcom, D-Iowa City, an outspoken proponent of establishing and expanding a state medical cannabis program, said he is concerned that even with the recent expansion, there will not be enough patients to make any new manufacturers or dispensaries profitable.

Bolkcom said he is dismayed the state did not increase the legal potency of the cannabidiol — it remained at 3 percent — which limits the medicinal impact the product may have on some of the covered ailments.

“I remain pessimistic about what we passed,” Bolkcom said about the expansion that was approved under all-Republican control of the Iowa Legislature and governor’s office. “I think we’re setting this thing up for failure.”

Bolkcom said he hopes lawmakers will expand the program again during the 2018 legislative session to allow for the production and sale of a more potent product that could help more patients.



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