Minnesota Launches Medical Cannabis with Two Companies

In the land of the Twin Cities, Minnesota has designated two companies to grow and sell the entire supply of medical cannabis for the state. The Minnesota Department of Health ended a selection process involving 12 applicants by choosing Minnesota Medical Solutions, aka MinnMed, and LeafLine Labs.

LeafLine Labs stated in a press release that it “will be operational and begin providing medical cannabis to patients with qualifying conditions on July 1, 2015, as required by Minnesota law.” It will break ground in December on a new 42,000 square-foot pharmaceutical-grade medical cannabis manufacturing facility in Cottage Grove, Minnesota.

“LeafLine Labs will cultivate and produce all of its pill and liquid-based, including oil-based, medicines at this secure facility.” This manufacturing facility could create 100 construction jobs and add “up to 35 people to manage the facility.”

LeafLine was launched by a Minnesota emergency room physician and 10 members of the Bachman family of florists.

Minnesota Medical Solutions proclaims itself to be a company “where scientific excellence in the manufacturing and processing of medical cannabis is married to compassionate and transformative patient experiences.”

The company is the brainchild of a Minnesota ER doctor, and they are wasting no time rolling out operations. Kyle Kingsley, CEO of MinnMed, said that a secure greenhouse and manufacturing facility in Otsego is built and will launch this week. Plans for four distribution facilities in Rochester, Maple Grove, Minneapolis and Moorhead are set to open by July, 2015.

This past fall, MJINews published estimates for marijuana sales in every state. Minnesota, with a population of just under six Million, is projected to have upwards of $410 Million in medical marijuana sales. The report used the actual sales data through April of 2014 to calculate the market by state and created an average annual revenue projection for 2014 for both the medical and adult use market. The report then created a trending market estimated size using the most recent reported revenue for July 2014.

According to the Star Tribune, “an estimated 5,000 patients with conditions ranging from cancer to glaucoma to Crohn’s disease could register for the Minnesota Medical Cannabis program next year.” That number is conservative, with other projections climbing to more than 15,000 patients.

The rollout of medical cannabis in Minnesota will not be as easy as turning on the supply of medicine. Minnesota has one of the country’s most stringent medical cannabis programs. It permits medical cannabis delivery in the form of liquids, including oil; pill; and vaporized delivery methods using liquid or oil, but not dried leaves or plant form. Basically any form of consumption excluding smoking can be considered for medical use.

Location is another potential hurdle for the approved dispensaries. The State reported that of the eight total dispensaries awarded “half would be in a 15-mile radius of the Twin Cities.” This has already raised questions about availability to all Minnesotans.

No doubt these two companies were selected in part based on their ability to stay in the game for the long haul. MinnMed is backed by “deep-pocketed investors” and believes its reserves will keep it solvent through the start of the cannabis industry in Minnesota. Similarly, Leafline will draw on the fortunes of Bachman family investors to gain a foothold in this new industry.

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