Cedar Rapids medical marijuana manufacturer closes, turns in state license

Cedar Rapids's sole medical marijuana manufacturer permanently has closed its doors, leaving the state with one medical cannabidiol manufacturer.

Iowa Relief relinquished its license following weeks after having ceased operations at its plant, state officials confirmed to The Gazette Monday. The company, owned by New Jersey-based Acreage Holdings, produced medical marijuana capsules, topical ointments and tinctures for Iowa's medical cannabidiol program for less than a year.

State officials still are determining when applications for a new medical marijuana manufacturer will open. They plan to release details in the near future, said Owen Parker, program manager at the Office of Medical Cannabidiol within the Department of Public Health.

Cedar Rapids City Council member Dale Todd, who has a son with a rare form of epilepsy, expressed his disappointment at Iowa Relief's closure. However, he said it was 'no surprise” given the way the state program was established.

'Draconian parameters that were set on the industry's ability to market and sell medical cannabis resulted in the demise of this business,” Todd said. 'The limited market prevented the industry from developing a sustainable business model, and everybody seemed to know that this would be the case. It's like watching a ship sink slowly.

'Regretfully it'll be the people in this region who looked at it for the medical benefits it provided that will suffer the most.”

Iowa Relief was awarded its license in June 2018 after receiving letters of support from city officials and local economic leaders.

In early April, Acreage Holdings had halted wholesale operations at its Cedar Rapids plant, along with several other companywide cost-cutting measures due the economic impact of the novel coronavirus impact.

'These bold measures will help to ensure that we emerge from this very challenging situation stronger than ever before,” Kevin Murphy, Acreage's chairman and CEO, said in a news release at the time.

It's unclear what will happen with the 5,000-square-foot cannabis cultivation and processing plant constructed on the southwest side of Cedar Rapids last year. Todd said city leaders have not discussed whether Cedar Rapids will vie for another medical cannabidiol manufacturer.

Lucas Nelson, general manager of Iowa's lone medical marijuana manufacturer MedPharm, said Iowa Relief's departure is a 'big blow” to the state's program, which already has faced a number of challenges.

'We can't quite seem to get our footing in this program,” he said.

Earlier this year, two dispensaries located in Davenport and Council Bluffs also closed their doors due to the pandemic.

The Iowa Department of Public Health had been seeking applicants to fill those vacancies, but officials announced on Monday they are rescinding the request-for-proposal.

Parker said Iowa Relief's closure, along with new legislation regarding the medical cannabidiol program, prompted the move. He said officials plan to reissue the application in the next few days.

'The previous RFP in some ways, it was an old program,” Parker said. 'We want licensees to be familiar with the new program.”

Eighteen pre-applications were filed for the two vacant slots for medical cannabidiol dispensaries, including two from companies competing to open a dispensary in Coralville. City officials issued letters of support for both applications from Des Moines-based MedPharm Iowa and Waterloo-based Iowa Cannabis Co.

However, state officials expect reissuing the dispensary applications will draw more interested parties after Iowa Relief's departure, Parker said.

MedPharm, which currently holds a medical cannabidiol manufacturing license, does not plan to apply for the second license, Nelson said.

Nelson welcomes a second manufacturer in Iowa. That, along with the new legislation now making its way to the Senate, will help move the state's medical cannabidiol program forward, he said.

House File 2589 - which passed the House in March - would expand the number of conditions eligible for medical cannabidiol, including for those Iowans grappling with PTSD and chronic pain, among other proposals.

If signed into law, the legislation would also establish a cap of 4.5 grams of THC, or tetrahydrocannabinol, over 90 days - replacing the state's current cap of 3 percent THC.

Comments: (319) 398-8469; michaela.ramm@thegazette.com