Medical marijuana manufacturers prepare for business

Minnesota medical marijuana manufacturers have lined up several dispensary sites throughout state and are set to have the first harvest over the next few weeks.

In Minneapolis, construction is under way on the city's first dispensary — a standalone 100-year-old downtown building that once housed the League of Catholic Women. This summer, it is expected to be one company's flagship dispensary.

The state Department of Health has approved two manufacturers, LeafLine Labs and Minnesota Medical Solutions, also known as MinnMed, to grow, process and sell medical cannabis in pill or oil form to Minnesotans starting July 1.

Each manufacturer is allowed four distribution centers around the state. MinnMed may locate dispensaries only in odd numbered Minnesota congressional districts and LeafLine Labs in the even numbered districts. The people allowed to purchase medicinal cannabis must have one of the 10 medical conditions specified by the state.

LeafLine is taking a measured approach. The medical cannabis company that includes members of the Bachman floral and garden store family, expects to open its first site in Eagan July 1. The other dispensaries in St. Paul, St. Cloud and Hibbing will open as the number of registered patients grows.

MinnMed, on the other hand, has all four sites lined up with target opening dates in July and August. The company will start remodeling a dispensary in a Rochester strip mall over the next few weeks. The company expects to close on a property in Moorhead for its third site and likely will open the fourth either in Minnetonka or Eden Prairie by August.

"It's about patient access and we can't have just one site and expect the whole state to come there," MinnMed CEO Kyle Kingsley said. "It was important to us that we do our best to be aggressive."

LeafLine Labs cofounder and medical director Gary Starr said selected dispensary sites were not "pure choice, but also based on availability."

The law eliminates a lot of possibilities. No dispensary could stand closer than 1,000 feet to public or private schools. Distribution facilities also must be spread throughout the state to improve patient access.

Starr, whose company was chosen in early December, said the compressed timeline forced the company to make location decisions based on relatively quick conversations with local officials, at least those willing to have the conversation in the first place.

A number of Twin Cities western suburbs and Duluth passed six- to 12-month moratoriums to stop dispensaries from coming to their cities, citing the need for additional studies to possibly update zoning requirements.

Medical marijuana advocate Patrick McClellan said he thought he was done lobbying for the drug until he stood before Bloomington city leaders in January to ask them not to pass a moratorium on distribution and manufacturing.

"People in my position and people who are terminally ill don't need any more obstacles to get medication that the state says is now legal," said McClellan, who suffers from adult onset muscular dystrophy.

In Duluth, city leaders fresh from fights with one prominent seller of synthetic drugs, wanted to take some time to evaluate the effect of a medical cannabis outlet.

But some city officials said they didn't want to rule out legalized medical marijuana distribution because of the city's history with illegal substances.

"I want to make sure that we're not making a mistake here and again being too hypersensitive," Duluth City Council Member Sharla Gardner said. "It's very important that we as a city not tar medical cannabis with the same brush."

Duluth City Manager Dave Montgomery said the moratorium, which is up in May, is not intended to be a ban on medical marijuana in the city.

"We're simply looking for six months so that we didn't have a rapid development of a process here before we had a chance to really evaluate what the implications might be," he said before the City Council passed the moratorium in a divided 6-3 vote last November.

Duluth falls in LeafLine Labs' jurisdiction, but the company is opting to open shop in Hibbing instead.

Dispensaries will resemble secured medical clinics. State law requires a pharmacist on hand at each one of them and a registered patient list. One difference from clinics: the dispensaries will not accept credit cards. Prescriptions are expected to cost about $500 for a month's supply.

MinnMed was interested in opening a dispensary in Bloomington because of its central location and close proximity to a number of interested patients, Kingsley said. But the city balked over concerns that a dispensary with a large amount of cash would attract crime.

"There is nationally a recognized black market for (marijuana)," Bloomington City Attorney Sandra Johnson said. "The stolen product is sold at a reduced cost.

"We don't know what's going to happen in Minnesota. This is brand new."

A recent Minnesota Department of Health informal survey of 1,361 potential participants in the Minnesota Medical Cannabis program found about half of the interested users reported their qualifying condition as multiple sclerosis or severe muscle spasms.

The state expects to begin enrolling patients in the program by June.

MDH Assistant Commissioner Manny Munson-Regala said the law requires manufacturers to have at least one distribution site open by July 2015 and the remaining three by July 2016.

It's typical to encounter hurdles when opening up any type of business, he said. In this business "you add onto that this weird little dynamic" and things get even more complicated.

"I think the folks who want to move forward with this program underestimate the amount of trepidation there is out there," Munson-Regala said. "The folks who are so passionate and believe this is what we should do forget there is a sizable number of people that are not sure."

Map: Future dispensary locations in Minnesota