Application Deadline Approaches For Potential Medical Marijuana Manufacturers

May 25, 2018

Businesses have until May 31st to apply for a license to manufacture medical marijuana in Iowa. But one market watcher warns the state’s regulations could keep some businesses out of the market.

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Out of Iowa’s two total manufacturing licenses, there’s one still up for grabs. Eight businesses have notified the state Department of Public Health they're interested in the license, but that doesn’t necessarily mean they’ll follow through.

In a past application cycle only one manufacturer company turned in a proposal, MedPharm. The company is in the process of building out its facility in Des Moines. The company also recently won two of the state's five licenses to distribute the drug.

Morgan Fox at the National Cannabis Industry Association said the state’s regulations can be a barrier for patients and businesses.

“Considering that Iowa’s program will likely serve about 2 percent of the possible patients that could benefit from a medical marijuana program that is more comprehensive, there’s a lot less chance that they would be interested in that because there’s a very low chance they’d be able to recoup their costs,” he said.

According to a 2017 analysis, the state's Legislative Services Agency estimates 1.7 percent of patients with qualifying conditions will actually apply to recieve the drug each year. Iowa law currently limits access to the drug to those suffering from cancer, multiple sclerosis, seizures, AIDS or HIV, Crohn's disease, ALS, or terminal illnesses. The primary caregivers of qualified patients can also apply to dole out the prescriptions.

"Expanding the allowable number of licenses would be the primary thing to change if you wanted to actually have more actors in the field and allow for more competition." - Morgan Fox, National Cannabis Industry Association

According to the National Conference of State Legislatures, other states that have legalized medical marijuana allow access for patients with Post Traumatic Stress Disorder and Sickle Cell Disease. Others don't limit access based on particular conditions at all. 

Fox said letting more patients get a prescription would open up Iowa's market. But he said the major hurdle is the limited number of available licenses for suppliers.

“Expanding the allowable number of licenses would be the primary thing to change if you wanted to actually have more actors in the field, and allow for more competition,” Fox said.

A state regulator has said the interest from businesses isn't what officials had hoped for. During the application cycle for the state's distribution licenses earlier this year, the state Department of Public Health's Sarah Reisetter said many businesses decided to not get into Iowa's market.

"We had 71 locations signalled earlier, and then we ended up with 21 applications," Reisetter said of potential distributors during a March interview, "so significantly less than we thought we might receive. However I think that we are...pleased that we received the 21 that we did."

Plans to expand Iowa’s medical marijuana didn’t make it through this year’s legislative session.