Iowa Medical Marijuana Expansion Hopes

This week, Mississippi became the 37th state to legalize the medical use of cannabis.

It may be months before the first marijuana dispensary opens.

The business of pot has been big for some states and expansion has been a challenge on many fronts.

Josh Buettner reports on the state of affairs in this week’s Cover Story.

As officials report a $1.5 million windfall over the first two days of 2022, Montana joins 17 other states which have collectively reaped more than $10 billion in recreational marijuana tax revenue since 2014.

Still illegal at the federal level, state-sanctioned adult-use pot has mainly sprung up in the West and Northeast.  Though limited in the Midwest, Michigan and Illinois tout recreational industries – with the Land of Lincoln boasting an accumulated half-a-million dollar levy since January 2020.

By contrast, medical marijuana has soaked deeper into the nation’s fabric.  Since California first opted to legalize for therapeutic purposes back in 1996, 36 states have followed suit.  Proponents just west of Illinois, in Iowa, say progress on the state’s medical front has improved since highly prohibitive origins in 2014 – expanding from pediatric epilepsy to allow treatment for several other health conditions.

Lucas Nelson/General Manager – Medpharm Iowa: “The market really kicked off in Iowa, December 1st, 2018 – and from there we’ve been able to supply products to the various dispensaries across the state, from then.  We’ve gone through a lot of changes.  We’ve been able to remove a THC cap that used to be on the program.  Now, allowing fully THC levels in any of the products.”

Lucas Nelson is General Manager of Des Moines – based Medpharm Iowa, the state’s sole approved cannabis grow operation.

Lucas Nelson/General Manager – Medpharm Iowa: “Every single plant, in the entire facility, has to be tracked, in real time, by our electronic system, and the state.”

Only five sanctioned dispensaries operate in Iowa, and MedPharm is currently supplying them all – including their competition, as well as their own locations in Sioux City and Windsor Heights.

Stephen Wilson/Dispensary Manager – MedPharm Iowa: “The number one thing we see in here is pain, whether that’s chronic pain or acute pain.”

Dispensary Manager Stephen Wilson says many new patient customers have detailed a harrowing journey through a slough of other pain meds.  And even though some doctors suggest cannabis before other harsh and addictive prescription drugs, Wilson says hurdles remain for income-restricted sufferers.

Stephen Wilson/Dispensary Manager – MedPharm Iowa: “I think the most important thing to realize is this is an expensive product that is not covered by insurance.  You know opiates are often, very often, covered by insurance.”  

Currently, state-certified patients must pay up to $100 annually for a medical card authorizing purchase of cannabis products.  Just under 8,000 Iowans are registered cardholders, less than a fraction of 1 percent of the state’s population.

Stephen Wilson/Dispensary Manager – MedPharm Iowa: “The big difference between our program and other programs are the type of products available for purchase.”

Acceptable delivery methods include topicals and oral forms – but no edibles.  Vape oil, once a restricted item, has quickly become the most popular offering, though Wilson says patients have been pushing for more.

Stephen Wilson/Dispensary Manager – MedPharm Iowa: “Most other medical cannabis programs are going to have, flower. Iowa doesn’t currently allow for us to manufacture or sell flower products.  If we are able to do that, prices are going to naturally fall.”  

A half gram vape mix of high THC and low CBD sets Iowa patients back about $75, after tax, while similar items can be found around 66 percent less for about $25 per unit in other states.

Stephen Wilson/Dispensary Manager – MedPharm Iowa: “It’s very expensive to operate in this state, currently.” 

Iowa border municipalities haven’t reported a significant increase in crime statistics since Illinois began recreational sales, but law enforcement cautions illegal trade hasn’t evaporated.

Apprehension grew in northwest Iowa when South Dakota voters approved dual-track legalization in November 2020.  Though medical remains intact, the governor there successfully blocked recreational implementation.  Onlookers expect voters’ voices will still be heard.

Dane Schumann/Attorney – Wandro & Associates/Des Moines, Iowa: “It looks to us that the legislature in South Dakota will probably still end up passing some kind of a recreational cannabis program anyway.”

Dane Schumann is a lawyer who lobbies Iowa lawmakers on behalf of MedPharm – which involves keeping an eye on pot-related developments nearby.

Dane Schumann/Attorney – Wandro & Associates/Des Moines, Iowa: “We see the impact that Illinois’ program has had on the medical program, because we can track how many patients in Iowa’s medical program there are, within each county.  If you look over at Iowa’s eastern border, the amount of patients has completely stagnated since January 1 of 2020, when Illinois’ program went live.”

Lucas Nelson/General Manager – Medpharm Iowa: “Many of us have been in that situation where, if we’re in pain, or someone in our family, or we care about, is in pain, we’ll do anything to help that.”

Industry and medical experts believe one of the biggest risks for patients who choose to engage the black market, besides Iowa’s zero tolerance statutes, is product purity. 

Lucas Nelson/General Manager – Medpharm Iowa: “What you’re seeing here is some of our THC oil that’s being distilled.”

Right now, Iowa’s authorized, raw marijuana crop must be processed into oil before manufacturing – driving up costs.  Nelson says the absorption rate of inhaled products is much higher than other means, and lifting the flower ban would move the state toward a full range of patient choices.

Health pundits warn combustion releases volatile chemicals and fumes, but some states offer flower vaping, and Nelson says, for the destitute, pain-relief benefits may outweigh potential risks.

But short of legislative adjustments, MedPharm could be forced to expand into friendlier business climates outside Iowa, sending more jobs and tax revenue elsewhere.  It’s a scenario Nelson prefers to avoid.

Lucas Nelson/General Manager – Medpharm Iowa: “We have no intention of leaving.  We’re all from Iowa, have connections to Iowa before we started working here at MedPharm and think that makes us a maybe little bit more uniquely dialed in to understand what this state needs.”

For Market to Market, I’m Josh Buettner. @mtmjosh