Iowa's sole medical marijuana grower might get some competition

Iowa could get a second medical marijuana growing facility after all.

Eight organizations told state regulators they might seek a license to grow marijuana plants and process the plants into medications. But they still have two weeks to decide whether to apply.

One of the unidentified companies could join MedPharm Iowa, which has the state’s sole medical marijuana production license and is expected to start selling medications in December.

MedPharm leaders, who have invested more than $10 million in their Des Moines production facility, have complained Iowa’s new medical marijuana law is too restrictive. They worry that limits on the types of products that may be sold and on the ailments for which they may be used will prevent many Iowans from signing up for the new program. Just 329 Iowa patients have received cards so far.

Iowa’s medical-marijuana law, passed in 2017, allows regulators to license two production facilities. Nine companies showed initial interest last fall, but MedPharm was the only company to file an application. Since then, MedPharm leaders questioned whether there will be enough customers to make their business sustainable in the long run.

"I think the jury is out whether we can survive under the current law or not," company owner Christopher Nelson said in April.

MedPharm tried to persuade legislators to loosen the rules before they adjourned for the year on May 5.

The Iowa Department of Public Health decided earlier this year to give other companies another chance to apply for the state's second medical marijuana production license. Wednesday was the deadline for companies to formally notify the department of their interest without committing to applying. Applications are due May 31 and must be accompanied by a $7,500 fee. If one of the companies gains a production license, it would be required to start delivering medications by July 1, 2019.

MedPharm leaders offered a measured reaction Wednesday to other companies' interest in possibly becoming Iowa's second medical marijuana producer.

"Additional manufacturers will not guarantee the success of the program and will not change the restrictive laws currently in place, such as the 3 percent THC cap and the limited list of patient conditions," MedPharm spokeswoman Lauren Burt wrote in an email to the Register. "MedPharm Iowa will continue to advocate for Iowa patients and we hope that any other manufacturers will have the best interest of Iowans at the core of their business."

Iowa law strictly limits what kinds of marijuana-derived products may be made and sold. The law bars products that could be smoked or eaten. It also bars products with more than 3 percent of THC, the chemical that makes recreational marijuana users high.

Iowa’s previous medical marijuana law only allowed possession of a marijuana-derived oil for use by people with severe forms of epilepsy. Since 2017, Iowa has allowed possession of approved marijuana products by patients diagnosed with Parkinson's disease, cancer, multiple sclerosis, seizures, AIDS or HIV, Crohn's disease or Amyotrophic Lateral Sclerosis, as well as most terminal illnesses that involve untreatable pain and a life expectancy of less than one year.

Three companies, including MedPharm, have gained licenses to open a total of five dispensaries. The new stores are to start selling medical marijuana products in December. All of the products will be made by MedPharm, at least at first.