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Cedar Rapids, Iowa 52401
Chris Nelson knows he initially may lose money as Iowa's first licensed medical cannabis manufacturer.
But if the state continues to develop its medical marijuana program, taking cues from other states with fewer restrictions, Nelson will be in on Iowa's ground floor of an industry projected to top $20 billion in North America by 2021.
'We anticipate there will be losses initially,” he said in an interview with The Gazette. 'But we're going to work hard to keep the lowest prices as well as hopefully expand the number of medical cannabis cardholders in the state.”
Nelson is president and chief executive officer of Des Moines-based Kemin Industries and owner of MedPharm Iowa LLC, which the state licensed Dec. 1 to manufacture medical cannabis here.
An Iowa native and biochemist, Nelson joined Kemin in the 1980s as research director and now leads the global firm that makes more than 500 specialty ingredients for humans and animals. The company is best known for extracting lutein from marigolds and adding it to everything from multivitamins to skin care products. Kemin also has one of the world's largest oregano farms, located in Texas.
'We've been interested in all sorts of plants for the last 35 to 40 years,” Nelson said. 'Our interest in cannabis obviously has gone right along with that. It was only when legalization started that we thought seriously about doing anything from a commercial standpoint.”
The Iowa Legislature earlier this year expanded the state's medical cannabis law to allow Iowans diagnosed with cancer, Parkinson's disease, multiple sclerosis, seizures, Crohn's disease, ALS, AIDS, HIV or most terminal illnesses to possess approved marijuana products.
The law replaces an earlier law that allowed those with epilepsy to use cannabis oil, but outlined no legal way to get the product. The 2017 version includes more medical conditions and provides for up to two manufacturers and five dispensaries in Iowa.
As lawmakers got on board with program expansion, Nelson connected with other like-minded entrepreneurs.
One of them was Andy Williams, CEO of Medicine Man, a Colorado corporation formed in 2009 to become the 'Costco of marijuana” that now makes $17 million a year, according to his MedPharm bio.
'We started to get in contact with them early on knowing that if we ever got it into it, it would be best to have a partner who has long-term experience in the growing of cannabis,” Nelson said.
Williams is one of MedPharm's three managing partners, along with Nelson and T.J. Johnsrud, founder and president of NuCara Management Group, a Conrad company that oversees Midwest pharmacies.
MedPharm Iowa plans to start growing marijuana plants in March, using 400 square feet rented from Kemin in Des Moines. It will harvest the plants, manufacture a variety of products and seek independent testing before having the products ready to sell by Dec. 1, 2018 - as required by the state law.
But for the fledgling state program to succeed, it's going to need some changes, Nelson said. First, Iowa should remove strength limits on tetrahydrocannabinol, or THC, the chemical compound that can produce a 'high” feeling.
'That restriction has not been justified from other states in the medical cannabis area and dramatically limits the patients' ability to have material that would work,” Nelson said. 'No. 2, I would expand the list of diseases the material could be used for, especially in the area of chronic pain.”
He pointed to research, such as a University of Michigan study, showing that medical cannabis when used with opioids can reduce opioid use.
As more states legalize medical cannabis, Nelson hopes the federal government will allow more research. The U.S. Drug Enforcement Administration limits clinical trials for marijuana, now considered a Schedule 1 controlled substance, and researchers must get permits for studies, he said.
'We're left with this conundrum where doctors are saying, ‘There's not enough research about how to use it,' but nobody can do research because of these federal restrictions,” Nelson said. 'I'd love to see that scientific knowledge developed.”
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